By Sunny Isles Real Estate Expert on May 11th, 2012
Since Miami real estate market
has shown significant signs of recovery, there has been cause for concern among experts that this may result in another housing bubble. Since there have been many properties purchased at well below value during the past few years, experts disagree as to how the recovery will affect home values for home-buyers in the future. People that want to ‘get rich quick’ from their housing investments may see the recovery as an opportunity to facilitate another housing bubble, as has been experienced in the past.
According to Lana Bell, owner and founder of Sunny Realty, “So long as individuals have the liberty and freedom to be greedy, the speculative bubbles will be inevitable, and we’ll have to deal with the outcome of bursting of that bubble.” Citing the desire of certain investors to get rich, a housing bubble scenario may reoccur, at which point it will be the market’s job to stabilize the prices after being artificially raised through speculative behavior.
Other experts disagree and believe that greed will not be the only factor in determining housing prices. There are now stricter regulations in place to prevent companies from providing unsecured, unverified mortgage loans, which facilitated the housing crisis and the artificial housing bubble. Chief Economist or the National Association of Realtors, Lawrence Yun, spoke on the topic and made this statement: “Back in 2005, investors came in with exotic mortgages and liar loans, and that’s not the case today.” With more stringent regulations on loan agencies as to who they can loan to and how much can be borrowed, Yun is optimistic about the recovery of the housing market in Florida and predicts that Miami home sales and prices will jump by 10% by the beginning of 2013.
Other concerns were raised at the business conference held at the Palm Beach County Convention Center. Realtors expressed concern over the financing trouble that many homeowners are having, especially if they must get into a bidding war with investors willing to pay cash for a property. Homes that are priced very reasonably in Florida are flying off the market at lighting speed with the combination of families and investors vying for the opportunity to sweep the property up before housing prices rebound more significantly. While all indicators have been positive for the Florida housing market and especially Miami luxury condos, Lisa Shalett of Merrill Lynch Global Wealth Management warns that the economy is not out of the woods just yet.