Real estate is on a growth trajectory. Housing demand, number of home sales, and prices are all up. With all of the buildup, some have started to worry that there will be another let down. But economists and real estate experts have reasons to believe that, today, the market is building on a more solid foundation than it has in the past.
The main point: while the market might be getting a little ‘frothy,’ it’s not another bubble. It boils down to everyday economics. Low supply + high demand = high prices. CNBC news recently covered the story:
“Unlike the catastrophic housing bubble seen at the start of this century, home price frothiness today is not being fueled by free and easy mortgage credit; far from it. Something far more fundamental is driving it–strong demand and weak supply.”
So, while even some housing markets have recently been considered “overvalued,” that definition is relative to income, not supply or demand. Deputy chief economist at CoreLogic, the company that reported the overvalued markets, stated:
“Just because you’re overvalued doesn’t mean that you’re in a bubble or there is an impending crash. Some markets are overvalued because of strong fundamentals.”
These strong fundamentals also include job and income growth as well as consumer confidence in the market, which has been remarkably positive over the past year as Americans continue to vote real estate as their top investment choice.
Perhaps one of the best investments is in a place that is beautiful and timeless. That’s Sanibel. If you’re interested in Sanibel real estate, contact us, search our MLS, or reach out to one of our knowledgeable Sanibel realtors. We’d love to help.
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