Some parts of the country do have price bubbles accompanied by swelling inventory, particularly the most expensive locales like San Francisco, Seattle and New York. But, all real estate is local. Orlando is one of the 270 or so real estate markets in the country, and has its own market dynamics. The supply in Orlando remains very low, and demand remains very strong.
But, memory is powerful. If you were a homeowner in 2008, you lived through the second worst housing price deflation in our nation’s history—“the Great Recession.” Apprehension from that major downturn stills reverberates. But, all three main ingredients of that downturn are completely missing now:
—The massive oversupply of 2009 is completely absent now.
—Subprime and risky mortgages are not available.
—Wall Street tricks with mortgage backed securities are now illegal.
What does the data tell us about rising prices in our area? We have had a shortage of houses for sale for several years while buying demand has remained strong. In June 2019, there were 8,050 total homes on the market, just 2.4 months inventory (a “normal” market is 6 months inventory). Low supply and strong demand have driven above average price appreciation over the last several years.
Until homes available increase dramatically or buyers go away, we will continue to see above-average price increases in our market. We have the opposite of a bubble—not enough homes for sale!
Brian Dodd, Ph.D.