The Real Estate Bubble
June 8, 2018 | Estero Elite Realty News
We all remember when the real estate bubble in Florida burst in 2008. There were mass foreclosures, declarations of Bankruptcy, and homes selling for far below their original market value. Many people blamed the issue on the “Too Big to Fail” economy of the time. It felt like everything was happening and ending all at once.
But, now real estate is again a booming market in Florida. Since Hurricane Irma hit our shores in September of 2017, Florida REALTOR©s have witnessed a steady market even though most people thought the storm would wreck the local economy. Despite Hurricane Irma, the real estate market in Florida is growing at a substantial rate. Are we approaching the burst of another bubble, or are we facing a major shift in Florida real estate outside of our own control?
Irma struck the Caribbean as a Category 5 storm before weakening and then hitting Southwest Florida. Winds were well above 100 miles per hour, and she caused billions of dollars in home, work, property, and even citrus damage. Many people have said – and continue to say – this is a result of climate change.
Most economists say it’s still too soon to understand exactly how the storm, or climate change, affected or will affect the market. But there is some anecdotal evidence that it’s taking a toll on property values. A company in Florida that assesses flood risks is booming, and workshops for municipal leaders to deal with the impact are drawing sold-out crowds. The economy in Florida is changing, and will change.
Before the storm, Bloomberg reported about the concerns of homeowners, local officials, business executives, and housing lenders that South Florida’s real estate downturn could be coming very soon. The reason, they say, is because of climate change.
Florida draws billions of dollars of tourism every year. Most Floridians live on or near the coast, enjoying the relaxing lifestyle and taking advantage of the beautiful views. However, climate scientists are warning of major shifts in the coming decades. They’re starting to look ahead, understanding the threat of rising sea levels and major landscape changes.
And so Florida has become a landscape that will face some interesting questions in the coming years. How will we sell real estate that could potentially be gone? Will banks continue lending 30-year mortgages for homes whose yards might be beneath feet of ocean water in 10 years? Property taxes are on the rise because of infrastructure concerns, and flood insurance is also a culprit.
Florida will prove to be a desirable home for years to come. It’s important to understand that the bubble we are experiencing now is a result of shifting weather patterns, intensifying storms, and how we react to it. As we head into the 2018 season, it will be interesting to see what the market does, and just how much of an impact Mother Nature will have.