There’s Still Room for This Market to Run!
Google made headlines last week when it reported that the search phrase “When is the housing market going to crash?” had spiked 2450% in the past month. So where does that leave Tampa?
According to Frank Nothaft, chief economist at CoreLogic, markets with the most growth in home prices would be the most at risk for a crash. Tampa’s growth was a whopping 15.2% over last year, so where does that leave us?
With a market so competitive, it may feel like everybody is trying to buy a house in Tampa. We are already starting to see a decline in mortgage applications as people give up and drop out of the market. But demand is actually lower now than it was in 2006, and as mortgage rates slowly rise, the degree to which home prices are increasing will slow down a little, too.
So can you buy a house now without fear of an imminent market crash? Florida-based author Joe Manausa says a decrease in average home prices is rare, happening only seven times in the past 80 years (with five of those years being in the wake of the 2006 bubble). And with construction costs continuing to climb, supply won’t catch up with demand anytime soon:
“So I would tell homeowners that there has never been a better market for selling a home in a predictable timeline. And buyers—never again in your lifetime will you find homes as affordable as they are today.”
“When you have too many homes and demand falls, that’s the definition of a housing bubble. We’re in the opposite of a bubble,” says Manausa. “We’re in a housing vacuum with no way to produce supply, so the best thing we can do is slow down demand by raising interest rates.” But in a post-pandemic economic recovery, that won’t happen immediately and it won’t happen fast.
BOTTOM LINE
Rising prices do not automatically equate to a housing bubble, and according to JP Morgan CEO Jamie Dimon, there’s still room for this market to run. It’s a great time to be a buyer!
Carrie Rowland is an Accredited Buyer’s Representative,® Certified Probate Real Estate Specialist,® Military Relocation Professional,® Graduate of the Realtor Institute® and a Realtor-Associate at RE/MAX Alliance Group in South Tampa
