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Another Housing Bubble?
With rapidly rising home prices in many markets across the country, some people are claiming that we are heading for another real estate bubble.
According to Rick Sharga, executive vice president with Carrington Mortgage Holdings, “This is not the 2005 market. We are not creating a bubble.â€
It is the shortage of inventory that is causing prices to rise. As prices rise, more sellers will be induced to sell, and more foreclosures are expected to hit the market within the next 12 months. Additionally, home builders are adding inventory as quickly as they can build. All of these factors will take some of the pressure off the market.
We don’t expect, though, that an increase in inventory will completely stop prices from going up….simply slow the rate of increase. As we have commented in previous newsletters, the record low interest rates and rising rental rates makes a compelling argument for buying vs. renting.
The Maui market is unique in many respects. As a world class resort destination, we benefit from a large percentage of off Island buyers looking for second homes, vacation properties, as well as those looking for a great place to retire or live part-time.