Is Boca Raton, Florida experiencing a housing "bubble?"I
n the previous two Case Shiller Home Price Index press releases, the commentary has surrounded around US home prices and future expectations. They seem to address the question of whether or not the US housing market is in a "bubble."
David Blitzer, Managing Director & Chairman of the Index Committee is quoted in the March 2015 press release, "I would describe this as a rebound in home prices, not bubble and not a reason to be fearful."
The March 2015 and April 2015 Case Shiller Home Price Index press releases offer some of the committee's rationale.
The March 2015 press release discussed price increases, but being at a "moderated" pace when compared with last year. Also, there is a discussion about home home prices in the US are increasing at a faster rate than per capital personal income or wages (3.1% and 2.2%, respectively), which suggests further "moderation" in home price gains. The idea is the pool of home buyers will narrow with price increases outpacing purchasing power.
To further their position, the March 2015 press release states, "consumer debt levels seem to be manageable." The implication is the consumer is not financially stretched beyond their limitations, suggesting this would not indicate a "bubble."
The April Case Shiller Home Price Index press release goes into consumer expectations in regards to housing. The press release reiterates the decelerating US home price increases and discussed a national survey published by the New York Fed. The survey showed consumers expected a 4.1% increase in both home prices and the cost to rent. The press release pointed out the expectation is below the annual price change of 4.9% since 1975. In addition, the press release pointed out the real, or inflation adjusted, price change since 1975 is 1.0% per year. The point, I believe, is that the expectation is at or below the long-term "norm," thus not projecting exuberant enthusiasm for the market.
What does this mean to a home buyer or home seller? Those that are buying and waiting for prices to sharply decrease, Case Shiller seems to make the argument that it is not likely. Those who are selling homes and are waiting for a huge price increase, Case Shiller seems to argue that also is not likely.
If you are thinking of selling your home or buying a home in the Boca Raton area, please call me on my cell phone at 561-247-3550.
I take an analytical approach to buying, selling and leasing real estate. If you are thinking of selling or buying a home, please feel free text me or call me at 561-247-3550.
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Michael Friedman
Realtor, Certified Distressed Property Expert (CDPE)
Member of Who's Who in Luxury Real Estate
Lang Realty
561-247-3550
An Analytical Approach To Buying, Selling and Leasing Real Estate
http://MYsouthFLrealestate.com
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