Are We in a Housing Bubble?


As home prices continue to rise all across the country, and particularly here in the Dallas-Fort Worth Area, where we have seen upwards of 14% increases in home values over the last year in many locations, the question Real Estate Agents often get asked is "Are we in a housing bubble", and then followed up with "When is it going to burst"? It's hard to believe that home prices can continue to steadily climb for as long as they have, but there is something driving this trend. It goes back to the principle of Supply and Demand. In the Fort Worth area, what we're seeing are more Home Buyers than Sellers, with limited number of homes available for sale. Also, mortgage Interest rates are continuing to drop to their lowest rates in 3 years, which motivates First Time Home Buyers, and those "sitting on the fence" to begin to look for homes. In areas such as the Haslet/Alliance Corridor, where large companies are relocating, there is an additional influx of people moving in from other parts of the country, and looking for homes in the area. There is no definite answer to the question if we are in a bubble. Warrent Buffet was recently asked, and his response was " I don't see a nationwide bubble in Real Estate right now at all." No one can truly predict what will happen, however from my viewpoint, what we will see are homeowners realizing the large amounts of equity they have in their property. More people will begin to put their homes on the Market, increasing the inventory, thus leveling out the prices overall. One thing is for certain, right now it's a Seller's market.

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