What Housing Bubble? 2008 versus 2021 Housing Market

Pompano Beach Real Estate values have appreciated by about 6%  in 2020, and are forecast to appreciate by almost another 6% in 2021 according to Zillow.
Some mighty think that we are in another Housing Bubble just like we saw in 2008.

However, we at Pompano Beach Realty believe the opposite to be true.
We outline 3 reasons why the Pompano Beach Real Estate market is totally different this time around.

1. The Housing supply is extremely limited

As you surely know, Real Estate Prices are determined by supply and demand. When there is a high supply of Pompano Beach Real Estate Sellers wanting to sell and there is low demand from buyers looking t purchase, Real Estate prices in Pompano Beach an elsewhere usually decrease.
And the opposite seems to hold true when there are few properties for sale and many buyers are looking to swoop up Real Estate in Pompano Beach,  home prices tend to increase.

Supply and demand in the Real Estate world are measured in months supply of inventory.
A “normal’ number of months of real estate inventory is around 6 months.
If the supply is longer than 6 months, usually indicates a buyers’ market in which home prices tend to decrease and again the opposite seems to hold true for a supply less than 6 months. This indicates a sellers market with rising property prices.

The 2 years leading up to the housing bubble of 2008 the housing inventory increased from around 5 months to 11 months!

According to the NAR (National Association of Realtors) unsold inventory is at an all time low of just under 2 months!

2. The current Housing demand is real!

Leading up to the housing bubble of 2008, the mortgage industry lent money to almost anyone that had a job, regardless of their income or debt to income ratio! Stated income loans made it possible. With these loans the borrower could “state” how much money he/she makes without verification by the lenders, hence the name stated income loans.
The higher the Mortgage Credit Availability Index (MCAI), published by the Mortgage Bankers Association, the simpler it is to obtain a mortgage.
And again the opposite holds true when the MCAI is lower, the harder it is a to obtain a mortgage.

Just before 2006, a little more than 2 years leading up to the 2008 housing crash, the MCAI was at around 400. Then in 2006 it hit an all time high of 868!
As we write this article, the MCAI is at only 122.5

In 2021 the Pompano Beach Real Estate demand is real thanks to the Millennials who are currently the largest generation in the USA.
As many Millennials have come of age to settle down and have families, a major driver for homeownership the demand for Real Estate is real!

This, together with historically low mortgage rates, drives the demand for homeownership even more, making the demand real.

3. As opposed to 2008, in 2020 homeowners have plenty of equity

Leading up to the 2008 housing crash, homeowners were using their homes like ATM machines, by doing cash-out-refinances leveraging the equity in their homes leaving many homeowners with little or no equity in their homes.
As the 2008 Real Estate Bubble began to burst and home prices started their decline many homeowners found themselves with a mortgage balance that was higher than the value of their homes.
Many homeowners started defaulting on their mortgage loans, the begin of a wave of foreclosures.

Fast-forward to 2017 – 2020 and the volume of those cash-out refinances were less than one third compared to what it was 3 years leading up to the 2008 real estate market crash.

In 2020 the levels of equity in owner occupied homes is unprecedented and over 38% of those own their homes without a mortgage loan.

What does that mean?

Since housing supply is historically low and demand remains high combined with the vast equity homeowners have in their homes, they should be able to weather a decline in home prices should there be one.

Is this like the 2008 crash?
Not at all, but exactly the opposite seems to hold true.

If you are looking to purchase a home or condo in Pompano Beach, call a friendly and knowledgeable Realtor at Pompano Beach Realty at 954-505-6000
Start your Pompano Beach Real Estate Search here.

This article is not investment advice and merely represents our opinion of the current Real Estate Market in Pompano Beach.
Please do your own research before investing or buying real estate.

Another interesting article:  Things to know about the as-is contract

Published: Feb 15, 2021

New Listing - 9 hours online
$319,900
Condo For Sale
Active
3
BEDS
3
TOTAL BATHS
1,710
SQFT
Palm Aire #402
4015 W Palm Aire Dr
Pompano Beach, FL 33069
New Listing - 18 hours online
$183,500
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,150
SQFT
Blue Lake Apts Condo #402
3400 Blue Lake Dr
Pompano Beach, FL 33064
New Listing - 3 days online
$179,000
Condo For Sale
Active
1
BED
2
TOTAL BATHS
700
SQFT
Park Place #13
251 SE 6th Ave
Pompano Beach, FL 33060
New Listing - 3 days online
$300,000
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,400
SQFT
1000 S Ocean Blvd #4M
Pompano Beach, FL 33062
Pompano Atlantis Ph 1 Subdivision
New Listing - 3 days online
$1,100,000
Townhouse For Sale
Active
3
BEDS
4
TOTAL BATHS
2,219
SQFT
1043 S Riverside Dr
Pompano Beach, FL 33062
Bermuda Isles Subdivision
New Listing - 4 days online
$234,777
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,035
SQFT
Island Club #H202
777 S Federal Hwy
Pompano Beach, FL 33062
New Listing - 4 days online
$230,000
Condo For Sale
Active
1
BED
2
TOTAL BATHS
710
SQFT
2731 NE 14th St Cswy #430
Pompano Beach, FL 33062
Garden-Aire Village Sea H Subdivision
New Listing - 5 days online
$129,888
Condo For Sale
Active
1
BED
1
TOTAL BATH
820
SQFT
4005 W Mcnab Rd #C203
Pompano Beach, FL 33069
Windward Lakes Subdivision
New Listing - 5 days online
$469,000
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,400
SQFT
Pompano Atlantis #7G
1000 S Ocean Blvd
Pompano Beach, FL 33062
New Listing - 5 days online
$440,000
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,200
SQFT
Parliament House #1503
405 N Ocean Blvd
Pompano Beach, FL 33062
New Listing - 5 days online
$549,788
Condo For Sale
Active
2
BEDS
3
TOTAL BATHS
1,498
SQFT
Nobel Point #29
1100 SE 5th Ct
Pompano Beach, FL 33060
New Listing - 5 days online
$247,000
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,000
SQFT
Casa La Quinta #108 C
2870 NE 14th Street Cswy
Pompano Beach, FL 33062
New Listing - 6 days online
$539,000
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
975
SQFT
Tiffany Gardens East #101
1610 N Ocean Blvd
Pompano Beach, FL 33062
New Listing - a week online
$399,000
Co-Op For Sale
Active
2
BEDS
2
TOTAL BATHS
950
SQFT
Silver Shores #2
3216 SE 12th St
Pompano Beach, FL 33062
New Listing - a week online
$350,000
Condo For Sale
Active
1
BED
2
TOTAL BATHS
890
SQFT
Ocean Place #15H
1900 S Ocean Blvd
Pompano Beach, FL 33062
New Listing - a week online
$349,900
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,000
SQFT
Pompano Beach Club #1714
111 Briny Ave
Pompano Beach, FL 33062
New Listing - a week online
$449,000
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,074
SQFT
Pompano Beach Club South #502
Address Withheld
Pompano Beach, FL 33062
New Listing - a week online
$249,950
Co-Op For Sale
Active
2
BEDS
1
TOTAL BATH
1,000
SQFT
Cypress Island #5
935 SE 9th Ave
Pompano Beach, FL 33060
New Listing - a week online
$349,000
Condo For Sale
Active
2
BEDS
3
TOTAL BATHS
2,440
SQFT
Vizcaya At Palm Aire #085B
4108 W Palm Aire Dr
Pompano Beach, FL 33069
New Listing - 2 weeks online
$589,000
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,800
SQFT
The Pointe #112
2880 NE 14th Street Cswy
Pompano Beach, FL 33062
New Listing - 2 weeks online
$699,000
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,716
SQFT
1340 S Ocean Blvd #2403
Pompano Beach, FL 33062
Claridge Condo Subdivision
New Listing - 2 weeks online
$125,000
Co-Op For Sale
Active
1
BED
1
TOTAL BATH
550
SQFT
301 E Mcnab Rd #108
Pompano Beach, FL 33060
Waterview Lodge Co-Op Subdivision
New Listing - 2 weeks online
$890,000
Condo For Sale
Active
2
BEDS
3
TOTAL BATHS
2,090
SQFT
Hampton Beach Club #312
1800 S Ocean Blvd
Pompano Beach, FL 33062
New Listing - 2 weeks online
$725,000
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,479
SQFT
1 N Ocean Blvd #510
Pompano Beach, FL 33062
Plaza At Oceanside (The) Subdivision
New Listing - 2 weeks online
$499,000
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,100
SQFT
Pompano Aegean #1212
1010 S Ocean Blvd
Pompano Beach, FL 33062
New Listing - 3 weeks online
$629,900
Condo For Sale
Active
3
BEDS
2
TOTAL BATHS
1,782
SQFT
Voyager Condo #906
2900 NE 14th Street Cswy
Pompano Beach, FL 33062
New Listing - 3 weeks online
$179,900
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,080
SQFT
612 Gardens Dr #104
Pompano Beach, FL 33069
Gardens North 9 Condo Subdivision
New Listing - 3 weeks online
$200,000
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,100
SQFT
Cypress Bend #410
2302 S Cypress Bend Dr
Pompano Beach, FL 33069
New Listing - 3 weeks online
$284,900
Condo For Sale
Active
3
BEDS
3
TOTAL BATHS
1,710
SQFT
Palm Aire Country Club #109
808 Cypress Blvd
Pompano Beach, FL 33069
New Listing - 3 weeks online
$359,000
Condo For Sale
Coming Soon
1
BED
1
TOTAL BATH
870
SQFT
Ocean Place Condo #16L
1900 S Ocean Blvd
Pompano Beach, FL 33062
New Listing - 3 weeks online
$439,900
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,150
SQFT
Pompano Beach Club North #812
101 Briny Ave
Pompano Beach, FL 33062
New Listing - 3 weeks online
$559,000
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
975
SQFT
Tiffany Gardens East #104
1610 N Ocean Blvd
Pompano Beach, FL 33062
New Listing - 3 weeks online
$1,995,000
Condo For Sale
Active
3
BEDS
5
TOTAL BATHS
2,572
SQFT
Aquazul #1203
1600 S Ocean Blvd
Pompano Beach, FL 33062
New Listing - 3 weeks online
$479,000
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
975
SQFT
Tiffany Gardens East #605
1610 N Ocean Blvd
Pompano Beach, FL 33062
New Listing - 3 weeks online
$1,675,000
Condo For Sale
Active
2
BEDS
3
TOTAL BATHS
1,880
SQFT
Sabbia Beach #703
730 N Ocean Blvd
Pompano Beach, FL 33062
New Listing - 3 weeks online
$419,000
Co-Op For Sale
Active
2
BEDS
2
TOTAL BATHS
Crane Crest #103
1850 S Ocean Blvd
Pompano Beach, FL 33062
New Listing - 3 weeks online
$495,000
Condo For Sale
Active
3
BEDS
2
TOTAL BATHS
Ocean Monarch #301
133 N Pompano Beach Blvd
Pompano Beach, FL 33062
New Listing - 4 weeks online
$278,788
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
980
SQFT
Garden Aire Village Sea H #1004A
2731 NE 14th Street Cswy
Pompano Beach, FL 33062
New Listing - 4 weeks online
$185,000
Condo For Sale
Active
1
BED
1
TOTAL BATH
752
SQFT
Marine Colony #135
1340 NE 28th Ave
Pompano Beach, FL 33062
Price Change - a week ago
$218,777
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,400
SQFT
Cypress Bend Vii Penthouse #906
2240 N Cypress Bend Dr
Pompano Beach, FL 33069
$273,000
Condo For Sale
Active
1
BED
1
TOTAL BATH
736
SQFT
Pompano Beach Club #1510
101 Briny Ave
Pompano Beach, FL 33062
$335,000
Condo For Sale
Active
3
BEDS
2
TOTAL BATHS
1,500
SQFT
Palm Aire Country Club #310
3050 N Palm Aire Dr
Pompano Beach, FL 33069
$270,000
Condo For Sale
Active
1
BED
1
TOTAL BATH
721
SQFT
Pompano Beach Club Condo #2605
111 Briny Ave
Pompano Beach, FL 33062
$199,000
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,064
SQFT
3800 Oaks Clubhouse Dr #202
Pompano Beach, FL 33069
Palm-Aire C C 70 Condo Subdivision
$429,788
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
Voyager #806
2900 NE 14th Street Cswy
Pompano Beach, FL 33062
$1,910,900
Condo For Sale
Active
2
BEDS
3
TOTAL BATHS
2,004
SQFT
1116 N Ocean Blvd #1803
Pompano Beach, FL 33062
Pompano By The Sea Resub Subdivision
$2,074,900
Condo For Sale
Active
3
BEDS
4
TOTAL BATHS
2,589
SQFT
1116 N Ocean Blvd #406
Pompano Beach, FL 33062
Pompano By The Sea Resub Subdivision
$2,008,900
Condo For Sale
Active
2
BEDS
3
TOTAL BATHS
2,037
SQFT
1116 N Ocean Blvd #1802
Pompano Beach, FL 33062
Pompano By The Sea Resub Subdivision
$179,900
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,150
SQFT
Palm Aire #109
2901 S Palm Aire Dr
Pompano Beach, FL 33069
$525,000
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,100
SQFT
Pompano Agean #1016
1010 S Ocean Blvd
Pompano Beach, FL 33062
$260,000
Condo For Sale
Active
3
BEDS
2
TOTAL BATHS
1,500
SQFT
Palm Aire #210
2801 Palm Aire Dr
Pompano Beach, FL 33069
$195,000
Condo For Sale
Active
1
TOTAL BATH
387
SQFT
555 N Riverside Dr #4
Pompano Beach, FL 33062
Aqua Mar Condo Subdivision
$280,000
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,200
SQFT
Palm Aire #1003
3499 Oaks Way
Pompano Beach, FL 33069
$259,900
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
980
SQFT
Sea Haven #517
2731 NE 14th Street Cswy
Pompano Beach, FL 33062
$399,999
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,100
SQFT
Ocean Monarch #108
133 N Pompano Beach Blvd
Pompano Beach, FL 33062
$174,900
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
911
SQFT
Island Club #609c
777 S Federal Hwy
Pompano Beach, FL 33062
Price Change - 3 weeks ago
$495,000
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
975
SQFT
Tiffany Gardens #1110
1620 N Ocean Blvd
Pompano Beach, FL 33062
$199,000
Co-Op For Sale
Active
1
BED
1
TOTAL BATH
608
SQFT
Twin Water #14
1201 N Riverside Dr
Pompano Beach, FL 33062
$219,000
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,065
SQFT
1340 NE 28th Ave #241
Pompano Beach, FL 33062
Marine Colony Condo Subdivision
$249,000
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
920
SQFT
700 Pine Dr #208
Pompano Beach, FL 33060
Garden Point Condo Subdivision