Home prices may be skyrocketing, but there doesn’t appear to be a bubble on the horizon.

Hi everybody,  It’s Joe Hillner with Your Home Sold Guaranteed Realty, where we guarantee the sale of your home, or I’LL buy it! 
Ok, so every week, I share market data to keep you informed with the local real estate market.  I missed you last week as I was in Panama City Beach running the Gulf Coast Ironman triathlon, where, I'm proud to say, I qualified for the World Championships - not bad, eh!

Here is this week’s Boca Market Watch.

First, Single Family Homes:

This past week, a  good week with 61 new homes on the market, ranging from $399,000 to  $8.9 Million. Only 20 homes back on the market, while 17 homes listed took a price decrease, and just 7 sellers raised their asking price.  58 different properties went under contract, and 41 went pending, a decent week. 
And only 11 homes were unsuccessful in selling and were taken off the market or the listing expired outright, by far the lowest I've ever seen!   63 homes were sold in the past week, a so so week, and those home sales ranged from $200K to an even $9Million.  

Next up, Condos and Townhomes:

71 new listings and ranging from $65 Grand to $3.25 Million.  
18 units came back on the market, 24 properties with a price decrease, and 20 sellers with an increase, in total, not very many.  53 different properties went under contract, and 50 went pending. So condo sales continue to perk along.  Get this, I have a nice condo listed in East Boca for $295K.  Of course, we received multiple offers, the highest being $350,000 cash - that's $55K over asking - crazy, right?!  Only 16 condos or townhomes were unsuccessful in selling and were taken off the market or the listing expired - again, by far the lowest ever!  103 closed sales this week, another very big week, and ranging in price from $125 Grand to $7.8 M!

Here's what's making news right now.

 There's a lot of talk about a housing bubble and that the market is about to collapse.  The Urban Land Institute, just released a report based on a survey that solicited responses in late April and early May from 42 economists and analysts who work in real estate. Overall, the report paints an optimistic picture of the near future.
For example, the report indicates that single family housing starts should jump up from 990,500 in 2020 to 1.1 million in 2021. Housing starts should increase further to 1.2 million in both 2022 and 2023. All of those numbers, including 2020’s, are higher than at any point in the last decade. That’s significant because economists have previously pointed to a decade-long building shortfall as a major contributor in the current inventory shortage.

In addition to more housing starts, the report additionally indicates that home prices should continue rising, though at a more moderate rate than 2020, when prices jumped a whopping 11.4 percent.  

Specifically, in 2021 prices should rise 8.1 percent — which is still higher than at any point in the last decade — followed by 5 percent in 2022 and 4 percent in 2023. If these projections come true, it would actually mean that home prices will grow less in each of the next two years than they did during most years since 2012.

The report also includes positive news for the rental sector. Among other things, it indicates that vacancy rates for apartments should hit 4.55 percent in 2021, then fall to 4.38 in 2022 and 4.18 in 2023.

All three of those numbers are far lower than the 20-year average. And by comparison, the vacancy rate in 2009 — amid the chaos of the last housing collapse— was 7.2 percent, much higher.
And no surprise, given falling vacancy rates, returns on investments in apartments should also be up from just 1.8 percent in 2020 to 5.6 percent in 2021. Returns should keep rising to 6.7 percent in 2022 before dipping very slightly to 6.5 percent in 2023.  Great news for all of those institutional investors that snapped up millions of homes in the last few years.
While these numbers may be discouraging to consumers who have lately been fighting brutal bidding wars and hoping for a drop in prices, they overall suggest that the housing market will remain healthy for the foreseeable future. That’s largely the same conclusion that a number of economists came to who recently spoke to Inman, the leading RE insider news source. But the new report is significant for drawing on dozens of different experts to piece together an even more comprehensive look at the future economy.

In a statement about the new report, William Maher — an Urban Land Institute member and director of strategy and research at a real estate consulting firm, said that many metrics such as housing starts and rent growth are ultimately expected to outpace long-term averages over the next couple of years.
Considering that just a year ago, all of the economic forecasts were dire, predicting a market collapse, that's an amazing turn around and a very optimistic view of the future.  SO for those buyers who keep telling me that they're waiting for prices to come down, you're taking a big risk by sitting on the sidelines.  With interest rates still near the all time bottom, your purchasing power has never been higher.  My advice, jump in now because that $400,000 house that you don't think is a great deal, will cost you $435,000 next year, or more. Not just my opinion, but all of the market experts are saying the same thing.

By the way, if you're thinking about buying a home, I recently came across an industry brochure How to Save Thousands of Dollars When You Buy.  If you'd like a free copy, just reach out to me and we'll send it right out.