Weekly Special | January 14, 2019

Definitive News On Next Housing Bubble?

Are you hearing rumors and find yourself concerned about the next housing bubble? This topic is buzzing from coast to coast, as the housing market slowed for many in 2019. Is a new bubble right around the corner?

Let’s start with a refresher: A housing bubble is a run-up in housing prices fueled by demand, speculation and exuberance. Speculators enter the market, further driving up demand. At some point, demand decreases or stagnates at the same time supply increases, resulting in a sharp drop in prices — and the bubble bursts.

Currently, there is a significant shortage of homes for sale in Tallahassee, and we are not building new homes to fill the shortage.

Demand appears to have softened when mortgage interest rates spiked this past Summer, and I see no evidence of speculation and exuberance (the number of annual home sales remains below 2005 and 2006 totals).

The only threat to the current housing market is a significant rise in mortgage interest rates, and low inventory will make a 2019 housing bubble all but impossible to form.

The original one-page Weekly Special PDF is still available.