Today's hot news:   The U.S. is facing a "perfect storm" for a housing crisis similar to that of 2008!

Hi everybody, 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.

Here is this week’s Boca Market Watch.

First, Single Family Homes:

This past week, 77 new listings, not bad, and ranging in price from $479K to $7M!  15 homes back on the market, while 66 homes listed took a price decrease, and 7 sellers raised their asking price.  And  like the last couple of weeks, only 38 different properties under contract, and 19 going pending, not good at all. 22 homes were unsuccessful in selling and were taken off the market or the listing expired outright.  And another poor week for sales with 47 homes sold, ranging from $325K to $4.85M!

Next up, Condos and Townhomes:

66 new listings, not too bad,  and ranging from $125 Grand to $16.5 Million.  17 units came back on the market, 64 properties with a price decrease, and 9 sellers with an increase.  And light week with 43 different properties under contract, and just 19 going pending,  And only 13 condos or townhomes were unsuccessful in selling and were taken off the market or the listing expired. 68 closed sales this week, a so so week, and ranging in price from $105K to $4.5M.

Here's what's making news right now.

According to Jose Torres, a senior economist for Interactive Brokers, housing prices could drop up to 25 percent within the next few years.  Furthermore, he is predicting that they will begin to decline in early 2023, which could see double-digit drops in prices, oh boy.

Torres said the crisis is largely fueled by a construction boom that lasted throughout 2021 (even though construction has slowed this summer) and a lowering demand for housing. He described the phenomenon as a "misalignment of timing between supply and demand."

And that's very interesting because everything that I've been reading, and reporting, for well over a year, is the shortage in housing starts - to the tune of about 800,000 homes a year.  So what data does he have access to that the Nat'l Assn of Realtors, Inman, RIS Media and so on don't?

Torres said. "A perfect storm is brewing in the real estate market due to nearly decade-high construction levels and dwindling demand".  He actually  used the "C word" and said that we can expect a crash a lot like what we saw during the great financial crisis in 2008.  That's pretty dire, and he's not alone.

A former White House economic advisor was also quoted as saying that he's very concerned about a possible crash.  And the CEO of the National Association of Home Builders, warns of a "grim" outlook for the housing market due to a halt in new construction.  All across the country, builders are saying that traffic is slowing down. They're reporting that they're having people talk about canceling existing contracts.

Very sobering, no?  Yet in our area, that slowdown doesn't seem to have taken hold.  Just last week, GL Homes released the first 75 lots for their new Lotus Palms development, with pricing around $1.3M and up.  To get in, you had to register for a lottery and provide a check for $10,000, and hope that you get chosen.  Pretty big disconnect don't you think?

Well, the economy has definitely dropped into a recession, so the only question is, "How long will it last and how bad will it be?"  As expected, the Fed took another 75 basis point increase this week, but that's been widely anticipated, so we don't expect mortgage rates to increase further.  The Fed is hoping to get inflation down to the 2-2.5% range, but since we're pushing 10% right now, that seems like a big ask.

Lawrence Yun, the Chief Economist for NAR said, “If mortgage rates do stabilize near the current level, home sales will be dependent on jobs and consumer confidence.  So, with job creation on the rise, home sales may stabilize soon — and could even turn upwards at the start of next year."  Remember, we're the good new guys, lol.

So there you have it.  Two diametrically opposed views of where the real estate market is heading.  On one side, a doom and gloom market crash, and the other, kind of a rosy status quo.  Which one is right?  Stay tuned, because we'll be watching closely...