Bubil: Another bubble on the way?


Musings on our real estate market:

Is it just me, or do the headlines proclaiming the revival of the housing market seem like old news?

Media reports seem fixed on the idea that the real estate market is finally in recovery.

I can't argue against that, but these reports remind me of the Realtor mantra that "all markets are local." The market in Sarasota has been in recovery for about a year and a half, after bottoming out in late 2011.

I heard one source on the evening news decry the fact that housing prices are only up 20 percent since the depths of the crash and that "we have a long way to go" to reach boomtime prices.

Hopefully, that is a very long way. In my view, 2004-2006 prices were fantasy, pie-in-the-sky, and very, very bad for the housing market. Prices will get back there, eventually, but let's hope it doesn't happen too soon.

But it could. Some economists are looking at the increase in housing prices, upwards of 20 percent in some Western markets in the past year or so, and the lack of affordable inventory, and worry that another housing bubble could be forming.

"Housing prices are rising very fast, and they're disconnected from the economic reality" of high unemployment and slow economic growth, said Anthony Sanders, a senior scholar at the Mercatus Center at George Mason University in Virginia.

Investors are fueling the market now, as rental properties are showing strong positive cash flows. But if the Fed eases credit for end-user buyers (people who would actually live in the houses they buy), prices could go up even further in a low-interest rate, low-inventory environment, Sanders said.

Meanwhile, Century 21 is reporting its statistics indicate a seller's market is upon us. A third of home shoppers have been looking for a year or more, and two thirds for up to a year.

It can happen, but we don't do it just to sell houses: Some readers have complained that our feature stories about interesting houses that also are for sale amount to free advertising for "Bubil's pals."

I doubt that people buy these featured houses because I think their histories are interesting, or they were photographed for our Market Snapshot feature in the Real Estate tabloid on Saturday.

But veteran RE/MAX Realtor Glenn T. Brown just put in a contract on a house for just that reason.

It seems his buyer insisted on buying a one-story house until he saw my photo of Brown's two-story listing on Prospect Street. The buyer saw the photo, drove by the house and made an offer on it three days later.

Harold Bubil

Recipient of the 2015 Bob Graham Architectural Awareness Award from the American Institute of Architects/Florida-Caribbean, Harold Bubil is real estate editor of the Herald-Tribune Media Group. Born in Newport, R.I., his family moved to Sarasota in 1958. Harold graduated from Sarasota High School in 1970 and the University of Florida in 1974 with a degree in journalism. For the Herald-Tribune, he writes and edits stories about residential real estate, architecture, green building and local development history. He also is a photographer and public speaker. Contact him via email, or at (941) 361-4805.
Last modified: June 3, 2013
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