Could 2021 be another 2008 and we see a housing crash in central Florida?
"No" says National Association of Realtors chief economist, Lawrence Yun. He says that "the current housing cycle is fundamentally different. We thankfully do not have risky subprime mortgages that overstretched buyers' budgets. The gatekeepers at banks, mortgage brokers and government regulators demand that loan - to - value ratios, debt - to - income ratios and income documentation meet guidelines before a mortgage is approved."
The chief economist also says " A second major difference is supply. Leading up to the housing bubble heyday, builders overbuilt. By my calculations, America had 2.1 million surplus housing units by 2006. Following the crash, underproduction steadily chipped away at the surplus, such that inventory normalised by 2011. Continuing underproduction led to the housing shortage. By the end of 2020, it totaled 4.8 million homes. The lack of inventory is why home prices are in no danger of falling sharply".
He goes on to say " Homebuilding activity in 2021 will be slightly above historical norms but it will take at least a few years to correct the massive shortage. In the meantime, we expect the national median home price to rise 9% this year and another 3% in 2022."
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