Is the bubble about to burst? Not likely: OPINION

While the high-end market booms, the rest of the market is still chastened

TRD MIAMI /
Oct.October 11, 2015 11:00 AM

[From the New York site:] Real estate records are being set left and right. Listings in NYC are pushing past the $100 million mark, and office space is leasing as high as $300 a square foot. But does that mean a bubble is building? Probably not, argues Bruce Batkin CEO and co-founder of Terra Capital Partners.

In a Barrons piece, Batkin claims that while the top of the market has in many cases surpassed the peaks of the last bubble, the rest of the market is still catching up.

“These price increases have been fueled by investors’ search for yield in a low interest-rate environment and by foreign investors seeking a haven and diversification,” he writes. “Some see this as a sign that U.S. real estate is repeating its climb into bubble territory and is headed for another crash.”

But, he says, outside of the luxury market, home prices have actually risen at a slow pace, and have not fully recovered from the downturn. And according to the S&P/Case-Shiller Composite 10-Home Price Index, home prices remained 15 percent below their April 2006 peak as of July.

Moreover, new-home construction is not back to where it was before the recession. Currently, there are 739,000 new single-family starts annually – 60 percent below the 2006 peak.

“For investors, the message is clear,” Batkin concludes. “Nearly 10 years after the bubble began, they will find a chastened and more disciplined market in which to participate.” [Barrons]Christopher Cameron


Related Articles

arrow_forward_ios
Nir Shoshani, Ron Gottesmann and Terry Wellons, with a rendering of NR Investments’ proposed mixed-use project

NR Investments gets $14M subsidy to build workforce and affordable housing

NR Investments gets $14M subsidy to build workforce and affordable housing
Miami commissioner Manolo Reyes (Credit: Facebook and iStock)

Miami board backs lower income limit for workforce housing

Miami board backs lower income limit for workforce housing
Arnaud Karsenti, Michael Adler and the Link at Douglas

Douglas Station project scores $99M loan for second tower

Douglas Station project scores $99M loan for second tower
Jeff Burns, Nick Rojo, The Grand

Affiliated Development to build workforce apartments in West Palm

Affiliated Development to build workforce apartments in West Palm
Ben Carson, United States Secretary of Housing and Urban Development

HUD Secretary Ben Carson joins Grant Cardone and a power panel for TRD Miami Forum

HUD Secretary Ben Carson joins Grant Cardone and a power panel for TRD Miami Forum
AIDS Healthcare Foundation downsizes proposed low-income apartment project

AIDS Healthcare Foundation downsizes proposed low-income apartment project

AIDS Healthcare Foundation downsizes proposed low-income apartment project
Avenir developers want out of workforce housing

Avenir developers want out of workforce housing

Avenir developers want out of workforce housing
Jacksonville issues $81M of bonds for a buyer of 4 low-income rental properties

Jacksonville issues $81M of bonds for a buyer of 4 low-income rental properties

Jacksonville issues $81M of bonds for a buyer of 4 low-income rental properties
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...