South Florida Real Estate and Community News

Sept. 19, 2022

Miami named one of the 10 U.S. cities with the worst housing shortage

Miami ranks No. 5 among major U.S. cities with the worst housing shortages, according to an analysis by Angi.

Angi used data from Freddie Mac and to assess population trends, available housing and home price index percentage changes. It also measured available affordable housing to arrive at its ranking of the 10 cities facing the “worst housing shortage.”

The analysis pointed to construction slowdowns during the COVID-19 pandemic as one factor in creating housing shortages. It also noted that much of what is available is out of the price range for many locals. “Simply put, what is available isn’t affordable,” the report said.

The cities with the worst housing shortages, according to Angi, in order: San Jose, California; Washington, D.C.; San Francisco; Boston; Miami; Boulder, Colorado; Salt Lake City; San Diego; Minneapolis; Los Angeles.

Aug. 4, 2022

CoreLogic: Miami home-price increases top national average in June

The pace of home-price increases in Miami topped the national average in June as economic headwinds dampened buyer demand across the country, CoreLogic reported, citing its monthly Home Price Index

Specifically, home prices were up 25.3% in Miami on a year-over-year basis, compared to 18.3% nationwide. Looking ahead, CoreLogic expects national year-over-year appreciation to slow to 4.3% by June 2023. 

“Signs of a broader slowdown in the housing market are evident, as home-price growth decelerated for the second consecutive month,” said Selma Hepp, interim lead of the Office of the Chief Economist at CoreLogic. “This is in line with our previous expectations and given the notable cooling of buyer demand due to higher mortgage rates and the resulting increased cost of homeownership. Nevertheless, buyers remain interested, which is keeping the market competitive — particularly for attractive homes that are properly priced.” 

Single-family homes experienced annual appreciation of 18.7%, compared to 16.6% for attached properties. 

Tampa, Florida, again posted the highest annual increase among the country’s 20 largest metro areas, at 32.6%, followed by Phoenix, at 26.1%. 

July 21, 2022

The Housing Market Is Correcting—So Why Are Home Prices Still Soaring?

Home prices have continued their seemingly inexorable rise, despite America’s housing market purportedly being in the throes of a correction, a slowdown—whatever you want to call it. It’s defying what many experts predicted and, just maybe, conventional wisdom.

Buyers can’t afford these higher prices on top of higher mortgage interest rates. Deals are falling through. Bidding wars are drying up. Six-figure offers over the asking price are going the way of the dinosaurs. So how is it possible that median home list prices were 15.9% higher in the week ending July 9 than they were a year ago, according to® data?

The disconnect appears to be that home sellers have yet to adjust to this new reality—the one where they can’t slap whatever price they’d like on their properties, sit back, and wait for the bidding wars to commence. Surging mortgage rates have made it impossible for many buyers to afford what they could have just a few months ago.

Meanwhile, record-high home prices are up more than 31% over the past two years, according to June list price data. And they keep rising. Something seems like it needs to give.

“Prices adjust really slowly,” says Chief Economist Danielle Hale. “Sellers are shaped by recent experiences. Before we see prices start coming down, we’re going to have to see sellers stop shooting for the moon.”

And just because sellers are asking for more money, it doesn’t mean they’re getting it. Buyers are negotiating. The number of price reductions on properties doubled in June compared with a year earlier.

Last month, about 11% of builders dropped prices on newly constructed homes, according to building consultancy Zonda. An additional 70% kept them flat compared with May.

“Real estate markets freeze when you see a big change in mortgage rates or the economy,” says Mark Zandi, chief economist at Moody’s Analytics. “Buyers cannot handle these house prices at these mortgage rates,” he says. “The mortgage payment is just too high for most first-time homebuyers. Trade-up buyers aren’t going to trade up because they’re going to have to get a higher mortgage rate.”

Home prices typically spike in the summer. Larger, more expensive homes go up for sale, and families eager to be settled before the kids start school in the fall compete for them. Plus, there are scores of millennials who are reaching the point in their lives when the idea of homeownership becomes more appealing. But now there still aren’t nearly enough homes for sale, or rent, to go around.

Record-low mortgage rates, which fell into the 2% range last year, allowed buyers to afford higher home prices. The lower rates meant that many monthly mortgage payments remained reasonable, balancing out the extra buyers spent on their properties.

However, mortgage rates have spiked from just about 3% a year ago to the mid-5% range. That’s tacked hundreds of dollars a month onto many mortgage payments. Buyers today are faced with mortgage bills 58% higher than they were just one year ago—when prices were also at record highs—on top of higher inflation, rents, and gas prices. That’s rendered many unable to borrow nearly as much for a home anymore and forced many others out of the market.

“A lot of homeowners are still pricing homes based on the market of six months ago,” says George Ratiu, manager of economic research for “There is a gap between what homeowners are asking and what they’re getting.”

July 20, 2022

Advice for Renters Priced Out of Home Buying

For many homebuyers, their ownership goal seems to be kicked farther down the field with every price increase and mortgage rate rise.

Today’s housing market can feel like a dream killer. Rising mortgage rates, high home prices and a shortage of properties for sale deliver a one-two-three punch.

If you’ve been knocked out of one too many deals and need a timeout, here’s how to regroup and keep the homeownership dream alive.

Give yourself a break

Given the rise in home prices and interest rates, the monthly mortgage payment for a median-priced single-family home with a 10% down payment has jumped by about $800 since January, according to a June 2022 National Association of Realtors® press release.

That’s huge.

It’s OK to hit pause if you’re frazzled to the point that you can’t think clearly or are simply priced out.

“If it doesn’t feel right to you … step away and give yourself some breathing room,” says Catalina Franco-Cicero, a certified financial planner with Tobias Financial Advisors in Plantation, Florida. “It’s OK to do that.”

But stepping back doesn’t mean giving up.

“One thing we tell people with any goal that you have is that there’s a big difference between ‘no’ and ‘not yet,’” says Nathaniel Moore, a certified financial planner and president of Agape Planning Partners in Fresno, California.

Strengthen your finances

View the break as an opportunity to get your finances in even better shape.

Use a mortgage calculator to estimate a monthly mortgage payment, including estimated property taxes and home insurance. Then add utilities plus 20% of the monthly mortgage for unexpected maintenance and repairs, Moore suggests. Subtract your rent payment from that amount and set aside the rest in a high-yield savings account.

“That way, if and when you can get in the home, you don’t have sticker shock or you’re not house-rich and cash-poor because you didn’t account for the other expenses,” Moore says.

He likens the transition to a relay race. “You want to have a smooth baton handoff, from the ‘renter you’ to the ‘homeowner you.’ If you’re not ready to walk in that house and afford the ancillary costs of living there, that’s when the baton fumbles and drops,” he says. “You want to get to the place where the rental person is running at the same speed as the homeownership person so when the baton is handed off it’s a smooth transition.”

When you’re ready to buy, you can add that extra money you’ve socked away to your down payment, which will help you make stronger offers and may qualify you for better mortgage rates.

“Nobody can truly predict interest rates nor inflation, nor the appreciation rate of homes in a relatively short period of time,” Eric Lefkowitz, president and chief operating officer of Motto Mortgage Mint in San Diego, said via email. “But we can be certain that buyers should be saving for strong down payment options. This will ensure they can get the best available interest rate when the time comes.”

Pay down debt

Paying down credit cards and other debt will improve two measurements: your credit score and your debt-to-income ratio, or DTI. Both are key factors that lenders consider when deciding whether you qualify and at what rate.

A good DTI – the percentage of gross monthly income that goes toward debt – is generally under 36%. The lower the better.

Your credit score is based in part on credit utilization, the percentage of available credit used. Shrinking your debt will lower credit utilization and help your score. Meanwhile, keep making on-time payments to preserve good credit.

“It’s going to give you a better mortgage rate and more options,” says Deb Gillard, a real estate agent with RE/MAX Venture in Owatonna, Minnesota.

Avoid optional big expenses

Resist the temptation to vent your frustration in a spending splurge, whether it’s running up a credit card balance or buying a new car when the old one suffices.

“That’s the last thing you want to do when you’re taking this pause,” Gillard says.

Another enticement may be to move to a nicer apartment. But stay put if you can, advises real estate broker Peggy Pratt, who leads the Pratt Properties Team of Century 21 North East in the Boston area. Paying the security deposit and other moving expenses could cut into savings for a down payment.

Reevaluate your wants and needs

This is a good time to look at the big picture.

“People need to do some soul searching to say, ‘What am I looking for in a home?’” Moore says.

Given home prices and mortgage rates, you may need to adjust your filters. You may need to shop for homes in a different neighborhood or buy something smaller than originally imagined. If the aim is to buy a starter home, build equity and upgrade in a few years, then that flexibility may pay off.

“Homeownership is a step-by-step opportunity,” Lefkowitz said. “You are not committing to stay in a home forever.”

If you could work elsewhere, another option you might consider is relocating to a less-expensive housing market, Franco-Cicero says. That’s a big decision. Taking a pause can give you time to research the quality of life and cost of living in other locations and weigh whether you want to live somewhere else.

Keep in touch with your agent, lender

Besides fine-tuning finances and reevaluating goals, keep in touch with experts you trust who can watch the market and bring you back in when you’re ready, Lefkowitz said. “This includes a strong Realtor and mortgage professional,” he said. “Together, that partnership can keep the buyers’ best interest top of mind and be ready to pounce on an excellent property when it becomes available.”

Let them know if you can make a bigger down payment, for instance. Keep your agent updated on when you might be ready to jump back into the market and the types of homes and areas you’re willing to consider.

Pratt says she counsels clients to maintain realistic expectations and not give up.

“Hang in there,” she says. “Something will come.”

Posted in Buying a Home
July 13, 2022

Real Estate Investing: 8 Things to Avoid

Real estate often make a great investment but investors expect a return on that investment. Seemingly attractive investments can sometimes have problems.

In the early part of the 20th Century, American humorist Will Rogers was quoted as saying, “Buy land. They ain’t making any more of the stuff.”

Real estate can be a wonderful investment, but buying property isn’t as simple as Will Rogers led people to believe. Investing in certain kinds of real estate can be a financial mistake. Let’s consider eight of the worst types of real estate to invest in.

Doesn’t produce income

Drive down any main street in small-town America and you’ll find dozens of empty storefronts available for lease or for sale. Some of these retail spaces have been vacant for years. They may have held thriving businesses at one time – but then the mall opened on the outskirts of town, or the big box store offered cheaper prices. These main street businesses may have survived the mall or Walmart, but they couldn’t see their way through the Great Recession, the competition of online retailers or the shut-downs of COVID-19.

It may be tempting to think, “Look at that store building. The price is so cheap. Let’s buy it and maybe we can sell it in a few years at a nice profit!” But that store building may have been vacant since 1995. If it couldn’t be sold and used then as a retail establishment, what makes you think you’ll be able to sell it at a profit today?

Negative cash flow

Tied in with a lack of income is a negative cash flow for a piece of property that’s for sale. If you wouldn’t buy real estate that doesn’t produce income, why would you buy a property that costs more to maintain than what it brings in? Do you know how to spell M-O-N-E-Y- P-I-T?

Too extravagant

What if the house that you want to buy and then rent out is as fancy as a mansion of the 1%? If a family could afford the monthly rental payment of such a home, why wouldn’t they just buy it for themselves? You don’t want to purchase a house for a rental property that’s as fancy as George Vanderbilt’s Biltmore House (Yes, I’m being sarcastic). Those who could afford the high rent could also afford to purchase their own home. And there you sit with an empty house. And no income.

Too expensive

Just ask any hard-working middle-class American family – it’s no fun having more money going out than what’s coming in. It’s always a good idea to follow the 28% rule – although some call it the 25% rule and others refer to it as the 30% rule. It simply means that a household shouldn’t spend more than 28% (or 25% or 30%) of its gross monthly income on total household expenses.

Housing developments

Throughout the United States there are defunct housing developments that never quite made it. The developers may have even improved the land by adding sewer, water and electrical utilities. They may have even put in curbs and gutters, as well as street pavement. But there are no houses (maybe one or two if they got lucky). There are no businesses. Chances are these developers went bankrupt.

It seems like the majority of such failed developments are located in states like Arkansas, Arizona and New Mexico, but every state has them. Probably the most egregious example of such a failed endeavor was the I-30 Condo Scandal of Garland, Texas (a suburb of Dallas) in the 1980s. If you drove east out of Dallas on I-30 at that time, you undoubtedly passed acres of half-built condominiums and empty cement slabs. The developer, Danny Faulker, ended up in jail with a 20-year sentence, but only served 4 because he suffered from terminal cancer. This debacle helped precipitate the Savings and Loan crisis of the late 1980s and cost taxpayers close to $1 billion.

Real estate purchased only for appreciation

Astute investors who have a pulse on future trends have sometimes made oodles of money by purchasing undeveloped land with the goal of selling it when prices increased. An example of doing this successfully can be found in the area just east of Lake Sammamish in the Seattle area. In the 1970s and earlier, this area from the lake to the Cascades was rural, with few homes and a handful of small towns.

But once Microsoft moved into Redmond, there was a building boom and that area is now filled with exclusive neighborhoods. In 2019, Sammamish, Washington was considered the richest city in America. Those who owned parcels of this undeveloped land prior to the Sammamish building boom came out like bandits.

But there are just as many – or even more – purchasers of undeveloped land who have lost everything. They purchased raw real estate at the wrong place and at the wrong time. Unless you have experience successfully predicting the future growth and development of an area, this is probably an investment strategy to stay away from.

Vacation timeshares

Timeshare property has been around since 1969. The average cost of a timeshare today is $22,942 with an average annual maintenance fee of around $1,000. There’s also the stressful experience of dealing with pushy salesmen or the difficulty of trying to get out of a timeshare contract.

Is all that worth it for a week in a vacation condo? Why not just vacation at a beach hotel, at the time and location that best fits your schedule and your interests?

The nicest house in a neighborhood

You’re shopping for a house to invest in or to live in yourself. A beautiful five-bedroom two-story goes up for sale in a neighborhood of three-bedroom bungalows. Not only does the house have room for a large family, but there’s also a built-in swimming pool in the backyard! The price seems decent for the square footage of the house, but because of its size, it’s more expensive than other homes for sale in the neighborhood.

Such a purchase may be tempting, but think about it – will this property appreciate in value compared to the other homes in the area? Remember, too, that there are no promises the rest of the neighborhood will improve. When the time comes to sell your beautiful five-bedroom two-story with its built-in swimming pool, will potential buyers want to live in a neighborhood of bungalows?

Bottom line

Investing in real estate can be both economically and personally rewarding. It’s important, however, to be aware of the pitfalls, and to understand that there are several types of real estate that you should probably stay away from. Will Rogers was right when he opined about land – “They ain’t making any more of the stuff.” But keep your eyes open and use your head so your purchase can be beneficial to your economic well-being.

June 30, 2022

New Fla. Real Estate Laws Go into Effect July 1

A number of real-estate-related bills passed in the 2022 Florida Legislature and were signed by Gov. Ron DeSantis, including the Hometown Heroes program.

TALLAHASSEE, Fla. – From the environment to mortgage aid, septic tanks to licensing, a roster of new Florida laws passed by the 2022 Florida Legislature and signed by Gov. Ron DeSantis go into effect Friday. They include:

Hometown Heroes – The 2022-2023 fiscal year budget (HB 5001) include $100 million to fund the Hometown Hero Housing Program backed strongly by Florida Realtors®. The revolving loan program provides some upfront homeownership costs to help qualified firefighters, law enforcement officers, teachers, nurses and other hometown hero professions become homeowners. It provides zero-interest loans to help with down payment and closing costs. The loan is repaid once the home is sold, rented or refinanced, creating a continuous cycle of homeownership for some of Florida’s essential workers.

Home hardening and other tax breaks for Floridians – HB 7071 includes the “home hardening” initiative, a 2022 Florida Realtors’ legislative priority that provides sales tax relief to homeowners who harden their homes from storms. The bill also includes an abatement of all property taxes for owners of the condos that collapsed in Surfside, pro-rated refunds of property taxes on residential properties rendered uninhabitable by a catastrophic event for at least 30 days, a sales tax reduction on new mobile homes and several sales tax holidays

Flooding and sea level rise resilience – HB 7053 establishes the Statewide Office of Resilience within the Governor’s Office, with the governor appointing the Chief Resiliency Officer. It sets a minimum of $100 million in funding to be identified annually in a comprehensive and ranked list of resilience projects.

Private property rights – SB 518 helps property owners who wish to prune, trim and remove trees that present a danger to their property by strengthening a 2019 law passed that prohibits local governments from requiring permits for the removal of “dangerous” trees on residential property.

Water quality – HB 965 creates a public/private partnership-oriented approach to improving water quality by authorizing the creation of water quality enhancement areas – natural systems constructed, operated, managed and maintained to provide offsite regional treatment through enhancement credits.

Preventing unlicensed real estate activity – The Legislature allocated up to $500,000 in the 2022-2023 fiscal year budget (HB 5001) to combat unlicensed real estate activity.

Everglades –The 2022-2023 fiscal year budget (HB 5001) that goes into effect July 1 includes money for Everglades Restoration ($425 million), Lake Okeechobee Watershed Restoration ($450 million), springs restoration ($75 million), beaches ($50 million), Biscayne Bay ($20 million), the Wastewater Grant Program ($125 million) and the Resilient Florida Grant Program ($470 million).

Septic system inspections – SB 856 makes private inspections an option for onsite sewage treatment and disposal systems, also known as septic systems. Cities and counties have dealt with a backlog of septic inspections for years, partially because of the number of inspectors and workload. This bill allows an authorized contractor to hire a private provider to inspect the system in addition to the inspections performed by public inspectors.

Landfills – HB 1419 creates a Municipal Solid Waste-to-Energy program to address the amount of municipal solid waste created in Florida, particularly in highly populated areas that don’t have the space or ability to permit new landfills.

May 31, 2022

Florida Legislature Passes Condo Inspection Law in Wake of Surfside Tragedy

The Florida Legislature unanimously approved a condominium safety bill, S.B. 4D,  this past week, which now awaits the Governor’s signing. Pursuant to that bill, buildings three stories or higher and thirty years old will have to undergo strict safety inspections and every ten years thereafter. Buildings within three miles of the coast must be inspected before they are twenty-five years old, and then inspected every ten years.

The inspection reports must detail the building’s structural deterioration, whether the deterioration is safe or not, and whether it requires repair. Copies of these reports must be distributed to all condo unit owners, and the condo boards must conduct reserve studies every ten years to determine how much each owner must pay to cover future repairs. Condo boards will not be able to waive reserve requirements or use the reserves for other purposes.

The 2022 Florida State Legislature did not initially pass a proposed law which would have created one of the strictest condo inspection and reserve funding requirements within the United States.  The legislation was an attempt to prevent tragedies such as  the horrific Surfside, FL collapse last June, which raised issues of condo ownership, collective responsibility for condo maintenance and upkeep, and inadequate reserves. Unfortunately, the requirement of financial reserves was perhaps the biggest issue. Condo unit owners routinely do not vote in favor of annual proposals for their buildings to carry substantial cash reserves. As a result, unless the association imposes a special assessment on its members for large repairs, the repairs are not done.

What now?

Should the Governor sign this bill, there will be more oversight into the structural integrity of condos. However, whether the condo owners will be able to provide monetary reserves, especially in older buildings that may in fact necessitate higher reserves, remains to be seen. If there are substantive repairs needed for the safety of condo’s structure and there are condo owners who are not able to pay the assessments, there may be an issue as to whether those owners would potentially face foreclosure  by the association. The condo documents may need modification to address this issue.

Further, should increased reserves be necessary, potential purchasers of the condo may be reluctant to purchase within a specific condo, leaving many units unsold. As a result, there may be more people looking to rent the units.

Developers and investors also may continue to potentially negotiate and offer lowered prices to tear down aging condo buildings in order to build new construction because the issue of maintenance and repair costs still exists. For, if that does not occur, local building departments will have to rev up their code enforcement policies and begin the unpleasant process of condemnation of entire buildings.

Finally, insurers will certainly increase their premiums on liability policies on older buildings that do not have adequate reserves as their financial exposure will invariably increase.

What does this all mean?

In order to prevent tragedies like Surfside, mandatory inspections of condos are needed. Requiring reserves is also necessary in order to prevent and repair the structural integrity of the condos. New developments and existing condos will be required to build in a reserve allocation into their annual budgets. However, the question as to whether condo owners, especially those in older condos, will be able to bear their pro rata share remains to be seen.

May 17, 2022

Fact vs. Fiction - The Truth About Today's Real Estate Market


The Facts

While today’s housing market is anything but normal, it’s not because of the same circumstances surrounding the housing bubble of the early 2000s that caused the crash.

Back then, new construction single-family homes flooded the market, lending standards were incredibly loose, and many homeowners were cashing out their equity left and right.

Today’s market is nearly the exact opposite.

What You Need To Know About Selling in a Sellers' Market | Keeping Current Matters

Since the housing crash of 2008:

  • Lending standards have tightened
  • The market is under-supplied rather than over-supplied on inventory
  • Most homeowners are much more cautious with their equity

Plus, housing market experts are forecasting continued price appreciation this year, as demand continues to outweigh home supply.


The Facts

Stories about the volume of foreclosures are all over the news today. But the most important thing to remember is context is everything.

Yes, many homeowners were able to pause their mortgage payments during the forbearance program, and there was legitimate concern from many experts that it would result in a wave of foreclosures coming to the market.

However, the number of foreclosures we’re seeing today is nothing like the last time.

What You Actually Need To Know About the Number of Foreclosures in Today’s Housing Market | Keeping Current Matters

Here are some of the reasons why that’s happening:

  • Most homeowners have enough equity to sell their homes
  • There have been fewer foreclosures over the last two years
  • The current market can easily absorb the new listings

Today’s data shows that most homeowners are exiting their forbearance plan either fully caught up on payments or with a plan from the bank that restructured their loan in a way that allowed them to start making payments again.

For all of these reasons, experts don’t anticipate a wave of foreclosures that would negatively affect housing prices.


The Facts

This might be one you’ve heard a time or twenty.

Skyrocketing price appreciation has many sellers and buyers sitting on the fence. However, experts don’t project home prices to go down anytime soon. Instead, data from earlier in the year has already been adjusted to be higher than previously anticipated.

First American explains it like this:

“While house price growth is expected to moderate from the rapid pace of 2021, strong home buyer demand against a backdrop of historically tight inventory of homes for sale will likely keep appreciation positive in the coming year.”

Will Home Prices Fall This Year? Here’s What Experts Say | Keeping Current Matters

For both buyers and sellers, this means one thing: playing the waiting game is a risky business.

When it comes to sellers, the higher price appreciation over the last two years has been great for their home’s value. But if they’ll also be buying a home after selling, they shouldn’t wait for prices to fall.

In both cases, waiting will only cost more in the long run because climbing mortgage rates and rising home prices will have an impact on their next home purchase.

April 7, 2022

FHA Announces a 40-Year Loan Modification Option


A 40-year loan mandates a lot of interest payments and a slow build for equity, but FHA says it will prevent thousands of foreclosures, making that a fair tradeoff.

WASHINGTON – The Federal Housing Administration (FHA) introduced a 40-year loan modification option, and it’s asking the mortgage industry for input in a bid to expand its COVID-19 loss mitigation “waterfall.”

The proposed rule would revise repayment provisions for FHA borrowers and allow lenders to reframe a borrower’s total unpaid loan for an additional 120 months.

HUD says the goal is to prevent “several thousand borrowers a year from foreclosure.”

The change will give borrowers a more sustainable, lower monthly payment that can help bring a borrower’s mortgage current, prevent imminent re-default and help borrowers keep their homes. The rule specifically targets FHA borrowers who recently exited government-mandated forbearance but are having difficulty making mortgage payments due to COVID-19-related financial distress.

HUD said the rule would also lower losses to FHA’s Mutual Mortgage Insurance Fund as fewer properties would be sold at a loss in foreclosure or out of FHA’s real estate-owned inventory.

However, there’s also a downside to borrowers who opt for a 40-year loan modification. HUD says they’ll face slower equity accumulation and more interest payments. But it says the ability to keep their home should offset any drawbacks.

April 5, 2022

Are We In A Housing Bubble?

The “warning signs” look all too familiar.

Escalating home prices have both buyers & sellers worried that the market is just “too good to be true,” and agents across the U.S. are getting bombarded with the ultimate question: “Are we in a housing bubble?”

Let’s take a look at 3 key factors that suggest we’re not, so you can educate your clients and calm fears in your market.


Last year, home values appreciated an average of 15% across the nation. And while this year’s growth isn’t expected to match it (experts are so far predicting closer to 6%), buyers and sellers are still worried that home prices are too high and that depreciation is likely to follow.

However, unlike the Housing Bubble years of the mid-2000s, the major factor driving up home values is that we’re also in a dire inventory shortage.

A balanced real estate market’s inventory sits around 6 months. Today’s current market is at 1.9 months, a historically low amount of homes for sale. On top of that, inventory has slowly been declining for years now: we’re currently sitting at less than 2 months.

In comparison, the inventory level from 2005 and 2007 increased from 5 months to 11 months, a vast over-supply of homes that did not warrant the price appreciation that went along with it.

So, throwing it back to your high school economics class, the biggest driver of price appreciation is a simple case of supply and demand, hence what we’re seeing in the market today.


If you remember the housing boom of the mid-2000s, you know how crazy that time was in real estate. But if Robert Schiller, a fellow at the Yale School of Management’s International Center for Finance, could sum it up in one phrase, it’s this: irrational exuberance.

In other words, the buying and selling frenzy that contributed to the market collapse was fueled not by tactful, financial decisions but a country-wide case of FOMO (fear of missing out).

The mortgage industry fed into the frenzy, making it easy for people to obtain home loans much higher than they could afford.

Today’s real estate demand, however, is a very real thing. And lending standards have become much tighter since before the crash.

Plus, with escalating rent happening across the U.S., many Americans are opting for the financial stability that homeownership offers.

These factors, coupled with low mortgage rates, make purchasing a home today a good financial decision. So, not only is the demand very real, it’s also very smart.


Following the housing and economic crash of 2008, economists, financiers, and real estate industry experts have combed through data to figure out why the entire system crumbled the way it did.

Most will agree that one of the biggest pieces of that catastrophic equation came down to this: equity. Or in reality, a lack of it.

The mid-2000s saw a massive wave of homeowners cashing out the equity in their homes. In short, they were using their homes like ATMs to afford some of the finer things in life.

This led to a lot of negative equity situations: where the amount someone owed on their home was far more than what their house was worth. Many foreclosures and short-sales followed, depreciating home values nationwide.

Today is a much different equity picture. Cash-out refinance volume over the last three years is less than a third of what it was compared to the three years before the crash. Plus, escalating appreciation meant that homeowners gained an average of $56,700 in equity in 2021 alone. As prices continue to rise, equity will too.

This positive equity perspective puts the current housing market in a much stronger place, minimizing risk of foreclosure and stabilizing home values across the U.S.