Markets Getting Too Hot? Financing Constraints, Inventory Shortages Should Help Keep Them in Check

Our friends at Forbes posted this great article, by noted real estate expert Ken Harney, which carefully balances many of the issues facing real estate professionals today as well as buyers and sellers.  Of primary importance is this section: when contrasting the difference between real estate "booms", Harney states the powerful truth that this time IS different as it pertains to inventory: "There’s another key difference: Although inventories of homes listed for sale were tight during portions of the boom years, they were generally not as severe as  today’s shortages." Read on for more. 

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Have some housing markets gotten too hot, too fast?

"Looking solely at recent price changes at first glance, it makes you pause and wonder. Entire swaths of California are seeing double-digit annual price jumps seem eerily similar to the boom years. Markets in parts of Florida, Arizona, Nevada and elsewhere are also seeing rapid price gains that might cause you to ask: Could this be déjà vu all over again?

Take Santa Barbara, California, as an extreme example. According to the latest multiple listing service data from realtor.com, median list prices in this high-cost, highly sought after enclave on the Pacific were up by 56.2 percent year over year. Between February and March alone list prices soared by 15.2 percent, bringing the median to $795,000, California’s second most expensive major market after San Francisco.

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