Buyers are overpaying, but are there signs of a bubble?

As prices continue to soar, Housing Wire asks the question: Are there signs of a bubble?

“The national average of home prices rose 14.4% year-over-year to $336,200 in February – the largest increase since July 2013, according to the latest report from Redfin. As proof of the impact of the country’s low inventory and high cost of building materials, new listings fell 16% – the second-largest decline on record since Redfin’s data began in 2012, only passed by the drop in April 2020. (more…)

How do prices in Southwest Florida compare with 2007/08?

While the market in Southwest Florida is hot and prices are rising sharply, it is interesting to see how prices compare with the peak from 2006/2008.

Naples
The median Single Family Home price in Naples has only just passed the earlier peak.

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It’s 80 degrees in Florida…

In this weekend’s Wall Street Journal, Peggy Noonan wrote:
“In the past year the owners of great businesses found how much can be done remotely.
They hadn’t known that!
They hadn’t had to find out.
They don’t have to pay that killer rent for office space anymore.
People think it will all snap back when the pandemic is fully over but no, a human habit broke; a new way of operating has begun. People will come back to office life to some degree, maybe a significant one; not everything can be done remotely; people want to gather, make friends, instill a sense of mission; but it will never be what it was.
The Partnership for New York City reports 300,000 residents of high-income neighborhoods have filed change-of-address forms with the U.S. Postal Service. You know where they are going: to lower-tax and no-income-tax states.

A recent report suggested that 850 people per day will move to Florida for the next 5 years as they seek “the weather, lifestyle and tax benefits” offered by Florida. (more…)

Are mortgage rates about to rise?

Following the Georgia Senate election results, which gave control of the Senate to the Democrats, along with the House of Representatives and the White House, the yield on the 10-year Treasury Note (10T) – the most sensitive to increased Government spending – jumped from 0.93% on Monday to 1.13% on Friday, based upon the expectation that increased Government spending would lead to more borrowing which would need higher interest rates to attract investors.

Why does this matter for mortgage rates?  Because the rate on the 30-year Fixed Rate Mortgage (FRM) is based upon an extra yield – spread – that investors require over that available on 10T. The national average reported on Thursday ( based on rates from Monday-Wednesday) was a record low of 2.65%, but next week will almost certainly see an increase. (more…)