Will the South Florida Real Estate Bubble Burst Again?
With South Florida’s real estate values rising at untold speed, could the bubble be doomed to burst once again? First-time home buyers are in a frantic scramble for any newly listed property, which is driving prices upward.
For most of 2012, Broward and Palm Beach counties saw a double-digit increase in home values, and this past January’s prices leapt more than 20 percent when compared to just one year ago. Typically, homes only appreciate at a rate of 4 percent annually.
Analysts are on the lookout for this housing bubble to burst, although they do not anticipate that it would be as drastic as the one from 2006 to 2011. As prices increase and inventory wanes, home buyers are faced with bidding time and again on property after property only to be outbid. Bidders are often offering more than the asking price in hopes of being the winning bid on their dream home.
A young mother looking for her first home for herself and her two young children recently arrived at a listed property and saw 15 cars parked on the street and a line of interested buyers stretching out the door of home. Builders are doing their best to build, but cannot construct fast enough to keep up with demand. Sixty days ago, the number of homes on the market in Palm Beach County fell 42 percent to 6,751 available properties.