The housing market’s recent run of double-digit appreciation brings back memories of the too-good days of 2005. But there’s no housing bubble this time around, University of Central Florida economist Sean Snaith writes in a new report:
There are two key differences between the current run-up in the housing market and the bubble that upon bursting took the state deep into recession. First investors in the current market are not the flippers of the previous bubble. Holding periods this time around will be measured in years rather than days. Second, housing finance remains much more restrictive than the anything-goes-loan-approved reckless lending environment that fueled the housing bubble.
The run-up in housing prices is more a function of the nature of the housing market. There is no just-in-time supply chain management in the housing market. There are significant lags when it comes to housing supply.
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