A Message From Doug Drake:
IS THIS A REAL ESTATE BUBBLE?
Understand the challenges and opportunities in Real Estate in 2021
Many people are worried about a bubble
Of all the real estate terms referenced in the media, "bubble" might be the most overused.
Over the past few months, the word has seen a resurgence, with prospective buyers and sellers worrying that the white-hot markets of 2020 will lead to a proverbial burst in 2021.
Real estate experts in the U.S. and abroad, however, are cautiously optimistic and don't believe the activity of this past year has inflated a "bubble" to be concerned over.
This is simple economics
"A real estate bubble is characterized and fueled by speculation, and that is not what we are experiencing now,"
says Scott Bradley, President, Berkshire Hathaway HomeServices Hawai'i Realty.
"The unprecedented market strength we are seeing today is driven by simple economic fundamentals:
supply, demand, and the cost and availability of money.
Current historically low interest rates are a prime catalyst driving sales.
An imbalance of supply and demand is further fueling a hot market.
There are 50% fewer homes on the market right now than there were a year ago, but demand for homes is strong."
That demand means even tougher competition for the buyer pool, but with more projected sellers deciding to list this year, emerging inventory could lead to market shifts.
Christ Stuart, CEO of Berkshire Hathaway HomeServices says
"I would encourage everyone to recognize that this might be a very hot year in terms of real estate,"
"But I'd hate for anyone to be on the sidelines and miss out on an opportunity either on the buying or selling side of the transaction."
