Prior to starting my real estate career, I spent the better part of a decade counseling those in need – people struggling with job losses, homelessness, and addictions. All of them
Are We In The Next Housing Bubble?
Happy New Year!
Housing is on a lot of people’s minds these days. Perhaps it’s on yours?
There are two things to remember for every person who is thinking of buying or selling a home:
- Your market is not everybody else’s market
- Everybody else’s market is not your market
We have been hearing weekly from customers, specifically our buyers, their concerns that they are buying at the top of the market. So are they? In a nutshell: It depends.
It depends on where you live in the United States. Real estate is local. Sometimes hyper-local.
In Central Florida, I am here to give both buyers and sellers welcoming news. It’s a great time to buy and sell a home. Here’s why: Inventory.
This graph reflects Central Florida’s inventory in December of each year since 2004. In the early 2000s the number of active homes on the market hovered between 3000-3400 homes on the market.
Fast forward to the boom between 2005 – 2007, and we topped out at over 27,000 active homes on the market.
In 2011/2012, we hit the bottom at 6300 homes. Then, we went up again and reached over 14,000 active homes on the market in 2014.
We’ve been coming down from that high and our next low happened in May 2018 when inventory hit 7,486.
Interest rates rose in 2018 to 5.5%, and we were bracing for a shift coming into 2019. Then interest rates dropped. With the drop of interest rates came more home buyers out looking.
Where are we today? We just hit 7,023. The lowest inventory in Central Florida since 2011/2012.
Why does this matter?
It matters because it’s only when our inventory is higher that we will see a shift in the market from a seller’s market to a buyer’s market. High inventory precedes a decrease in values.
What is the reason this is good for both buyers and sellers?
Lower inventory indicates housing prices are likely to increase over the coming year. For a buyer, you will gain equity. For a seller, when inventory is lower, you can sell your home for top dollar.
Obviously, there are many factors that dictate the best time to purchase or sell a home. Your personal situation, condition of the property, timing, interest rates, etc. Just remember inventory is the first indicator to help you understand the real estate market.
So to answer the question, Are we in the next housing bubble?, today, in Central Florida, we are not in a housing bubble that is ready to crash. Our inventory is simply too low.
If you live outside of Central Florida, then ask your local real estate expert to see the inventory trends over the last decade. They will give you a good idea of how your market is doing.
If you don’t have a good agent, then please reach out to us, and we can put you in touch with somebody in your area.
In Central Florida, The KeyBella Homes Group is here to help you decide when the right time will be for selling or buying. Please feel free to call us any time for a strategy session. We’d be delighted to walk through the steps.
Wishing you all a prosperous and happy 2020!
~ Amy, Unraveling Real Estate Obscurities
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