Is the bubble about to burst? Not likely: OPINION

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
Residential sales fall in Southern Florida
Residential sales fall in April across South Florida
Residential sales fall in April across South Florida
10061 Southwest 60th Court in Pinecrest with Dr. Robert DerHagopian (Google Maps, Miami Cancer Institute)
Miami breast cancer surgeon Robert DerHagopian sells Pinecrest house for $6M
Miami breast cancer surgeon Robert DerHagopian sells Pinecrest house for $6M
2621 Flamingo Drive in Miami Beach with Mike Hezemans and Rita and Roman Shukhman (Compass, Wikipedia, Getty, LinkedIn)
Pro race car drivers sell Miami Beach spec house for $10M
Pro race car drivers sell Miami Beach spec house for $10M
Michael Dorrell, co-founder and CEO, Stonepeak Infrastructure Partners, in front of 235 Solano Prado in Coral Gables (The Jill Zeder Group, LinkedIn/Michael Dorrell)
New York investment firm founder pays record $34M for waterfront Coral Gables teardown
New York investment firm founder pays record $34M for waterfront Coral Gables teardown
Commissioner Eileen Higgins (Eileen Higgins, iStock)
Landlords now required to give 60 days’ notice of rent hikes over 5% in Miami-Dade
Landlords now required to give 60 days’ notice of rent hikes over 5% in Miami-Dade
(iStock/Illustration by Shea Monahan for The Real Deal)
Miami becomes least affordable housing market in the US
Miami becomes least affordable housing market in the US
Naples, Florida (iStock, Freepik, Illustration by Shea Monahan for the Real Deal)
Florida’s west coast cities rank among top emerging real estate markets
Florida’s west coast cities rank among top emerging real estate markets
(Photo illustration by Kevin Rebong)
South Florida real estate braces for flood insurance hikes
South Florida real estate braces for flood insurance hikes
arrow_forward_ios

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

Loading...