Real estate experts are worried about another housing crash in South Florida.
Speaking to The Washington Post’s Jim Tankersley, South Florida housing guru Jack McCabe said that the region’s housing market looks like it could be heading for another bubble.
“We have short memories here in Florida,” McCabe told The Washington Post. “And we’re back at it. Every project is getting approved again. Particularly in the luxury condo sector, there’s going to be a crash in prices in the next few years.”
According to the latest Case-Shiller home price index, home prices in Miami were among the most quickly appreciating in the country in May compared to last year, outpaced only by San Francisco, Denver, and Dallas.
Miami, along with Las Vegas, saw perhaps the most violent run-up and crash in housing prices during the 2000s, and according to Case-Shiller, prices in Miami are still well below their housing bubble peak.
McCabe told The Post that the recent run-up in housing prices has been fuelled by cash buyers largely comprised of wealthy foreigners and institutional investors like hedge funds.
This is quite different from the mid-2000s housing bubble, which was largely stoked by banks approving mortgages that couldn’t reasonably be repaid.
During the summer we’ve written that the US housing market has come roaring back in a big way, with indicators ranging from existing home sales, homebuilder confidence, and the pace of new homes being built at the best levels since before the housing bubble popped.
But the housing bubble that popped in the middle of the last decade set off the worst financial crisis since the Great Depression. And no one wants a repeat of that.