Is Irrational Exuberance the New Normal? – Realty Biz News

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Sooner or later every real estate boom comes to an end. Real estate has been the poster child for a “V” shaped recovery during the COVID-19 economic recovery. But now, that real estate exuberance is facing an affordability plateau that might finally dampen some of the irrational exuberance.. There are two strong economic forces at work here. Both involve the lack of affordable housing. There can be no denying that the U.S. is experiencing the highest level of demand for affordable housing since millions of servicemen returned from WWII.

The WWII Housing Boom That Reshaped America

The G.I. Bill almost single-handedly built the American middle class by addressing the core social needs of unemployment, education, and health care. And importantly, it did so through government-backed, low-interest, fixed-rate mortgages with zero or low-down payments with up to 30-year terms. In effect, the G.I. Bill put homes within reach of all but the poorest American vets. The American suburb was born.

It was several years earlier when President Roosevelt laid the groundwork when he said, “A nation of homeowners, of people who won a real share in their own land, is unconquerable.” This was an affordable-home revolution from our past. But what does that have to do with today’s need for affordable housing? More than a little. Although the 20-year war in the middle east is ending, there will not be 15 million vets coming home in search of a family home. But there are still millions of Americans in search of an affordable family home.

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Authored By Brian Kline
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Most Overvalued Housing Markets in the United States – Fortune

overvalued housing markets

They say everything’s bigger in Texas, but when it comes to overvalued housing markets, the Lone Star State doesn’t hold a candle to Idaho.

A new survey from Florida Atlantic University and Florida International University looks at the nation’s most overvalued homes, with Boise, Idaho, topping the list. Homes in the Gem State sell for a stunning 80.64% premium, based on a history of past pricing.

The work-from-home trend is largely responsible for that. As people moved out of big markets during the pandemic, they looked for less dense areas that still offered attractive amenities. In addition to Idaho, Utah has been an especially popular destination for buyers, the study found.

Of the 100 cities looked at in the study, 95 showed some level of overvalue. The rapid price appreciation should serve as a warning to buyers, say the study’s authors. If you plan to move soon, you could find yourself later selling property at a loss.

Full Story From Fortune

Real Estate Trends for the Rest of 2021

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It’s no secret that the COVID-19 pandemic has turned the real estate market into a wild domain. If you’re looking to buy or sell a home, you’re likely eager to know how long this will last and what the latest real estate trends are.

In June 2021, home prices across the U.S. surged 24.8% year-over-year — to a median sale price of $386,888 — according to Redfin. During the same time period, the number of homes sold increased 20.6% and the number of homes for sale tumbled 39.6%.

Mortgage rates have reached record lows during the pandemic and have once again been on the decline since late June. Specifically, the 30-year fixed-rate mortgage was 3.02% on June 24, dropping to 2.78% on July 22.

While an economic upturn was predicted, the Delta variant could send that to a screeching halt. On July 27, the Centers for Disease Control and Prevention reinstated their recommendation that fully vaccinated people in areas of substantial or high transmission wear a mask indoors.

Only time will tell if additional COVID-19 restrictions will return, and how this could impact the housing market and real estate trends. However, several real estate agents and experts have weighed in with their opinion of what the market will look like for the rest of the year.