Right now, Florida homes are skyrocketing in value and have been over the past year. Many homeowners and homebuyers are asking “why are Florida homes valued so high in 2021?” And their next question is “when will this real estate bubble pop?”
The market here in Florida has been steadily climbing over the past year despite business closures and quarantine mandates due to the pandemic. While some businesses have closed, many businesses have pivoted and some new businesses have been born during this time of economic confusion.
Will Florida Homes Continue to Sell?
In short, the answer is yes. Obviously, there is never a guarantee of anything in life so things that we cannot predict will always have an effect on the economy and the real estate market.
However, right now there is a home shortage in Florida. And Floridians aren’t the only ones dealing with this problem. The housing shortage is a problem that Americans are dealing with nationwide.
There are just fewer new homes being built and fewer old homes going up for sale. And construction crews can’t keep up with the housing demand. Experts are predicting that it will be years before we will see the demand for homes level out and reach some kind of normalcy.
When Will Florida’s Real Estate Bubble Pop?
So many Americans fear the housing bubble will pop as it did back in 2008 which left people broke, homeless, and scared. It’s easy to understand why people are afraid that the same thing will happen again soon.
The real estate market has continued to climb year over year. And Florida is no exception. The housing market here has also increased steadily over the last several years.
Some experts believe we are headed right into another crash. However, other experts disagree. Right now interest rates will stay low as a part of the pandemic relief and most likely will for a few more years.
With interest rates remaining low, people will be more motivated to buy property. That still leaves the question of why are Florida homes valued so high in our current real estate market?
It all comes back to demand. The real estate market all around the United States has continued to climb and the main reason why is supply and demand. Simply put, there is a shortage of homes.
There are just too many people looking to buy and not enough people wanting to sell. Especially after the pandemic and having a break in new construction being completed, there just aren’t enough homes for everyone who needs one.
Because homes are in such high demand, naturally, the value goes up. Now construction has started back up again over this past year. More and more homes are being built, however, it still isn’t sufficient to meet the demand in the market.
Even though some experts believe that we need to be concerned about another real estate bubble, there is plenty of evidence that would suggest otherwise.
Florida Real Estate Market Will Level Out
The biggest reason why people believe that the real estate market isn’t going to pop is because of millennials. Right now, millennials are the largest living adult generation of Americans and have even outnumbered baby boomers. And they are all heading into the real estate market and wanting to buy homes.
One of the biggest reasons why the housing bubble popped back in 2008 was due to supply and demand. There was an abundant amount of homes on the market, but there were no buyers.
Back then, the demand for homes had dropped. And thanks to millennials that is not something we need to worry about for many years to come.
The 2008 housing crash was a scary time for many people. But the good news is that many real estate experts have analyzed the trends and predict that over the next few years the real estate market should level out smoothly.
So there is no need to worry about another housing crash anytime soon.