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 - 21 hours online
$399,999
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,100
SQFT
Ocean Monarch Condo #103
133 N Pompano Beach Blvd
Pompano Beach, FL 33062
New Listing - yesterday
$449,900
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,195
SQFT
1500 Ocean Club #302
1500 N Ocean Blvd
Pompano Beach, FL 33062
New Listing - yesterday
$180,000
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
920
SQFT
Cypress Bend #304
2236 N Cypress Bend Dr
Pompano Beach, FL 33069
New Listing - yesterday
$690,000
Condo For Sale
Active
3
BEDS
3
TOTAL BATHS
2,430
SQFT
Sea Monarch #1204
111 N Pompano Beach Blvd
Pompano Beach, FL 33062
New Listing - yesterday
$185,000
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
920
SQFT
Cypress Bend Waterchase #205
2236 N Cypress Bend Dr
Pompano Beach, FL 33069
New Listing - 2 days online
$349,000
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
933
SQFT
Pompano Beach Club #2103
101 Briny Ave
Pompano Beach, FL 33062
New Listing - 3 days online
$245,900
Condo For Sale
Active
3
BEDS
2
TOTAL BATHS
1,500
SQFT
Palm Aire #501
2940 N Course Dr
Pompano Beach, FL 33069
New Listing - 3 days online
$239,900
Co-Op For Sale
Active
1
BED
1
TOTAL BATH
850
SQFT
Marine Terrace #406
401 N Riverside Dr
Pompano Beach, FL 33062
New Listing - 3 days online
$210,000
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
910
SQFT
Casa La Quinta #307 C
2870 NE 14th Street Cswy
Pompano Beach, FL 33062
New Listing - 3 days online
$699,900
Condo For Sale
Active
2
BEDS
3
TOTAL BATHS
1,652
SQFT
Renaissance Of Pompano Be #508
1360 S Ocean Blvd
Pompano Beach, FL 33062
New Listing - 4 days online
$274,900
Condo For Sale
Active
1
BED
2
TOTAL BATHS
885
SQFT
Nobel Point #62
1100 SE 5th Ct
Pompano Beach, FL 33060
New Listing - 4 days online
$1,425,000
Condo For Sale
Active
2
BEDS
3
TOTAL BATHS
1,760
SQFT
Sabbia Beach #1201
730 N Ocean Blvd
Pompano Beach, FL 33062
New Listing - 4 days online
$265,000
Condo For Sale
Active
3
BEDS
2
TOTAL BATHS
1,377
SQFT
Palm Aire Country Club #501
3080 N Course Dr
Pompano Beach, FL 33069
New Listing - 6 days online
$585,000
Townhouse For Sale
Active
3
BEDS
3
TOTAL BATHS
1,907
SQFT
508 SE 1st Circle #508
Pompano Beach, FL 33060
60 Subdivision
New Listing - 6 days online
$425,000
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,120
SQFT
Ocean Place #3D
1900 S Ocean Blvd
Pompano Beach, FL 33062
New Listing - a week online
$179,900
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,150
SQFT
Palm Aire #602
2801 N Palm Aire Dr
Pompano Beach, FL 33069
New Listing - a week online
$274,900
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,070
SQFT
801 S Federal Hwy #820
Pompano Beach, FL 33062
Waterford Point Condo Subdivision
New Listing - a week online
$249,777
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
Island Club #C206
777 S Federal Highway
Pompano Beach, FL 33062
New Listing - a week online
$398,000
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,256
SQFT
Seville House #1002
299 N Riverside Dr
Pompano Beach, FL 33062
New Listing - a week online
$435,000
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,200
SQFT
Parliament House Condo #1708
405 N Ocean Blvd
Pompano Beach, FL 33062
New Listing - a week online
$490,000
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,520
SQFT
Pompano Aegean #407
1010 S Ocean Blvd
Pompano Beach, FL 33062
New Listing - a week online
$469,900
Condo For Sale
Coming Soon
2
BEDS
2
TOTAL BATHS
1,250
SQFT
Christopher House #414
401 Briny Ave
Pompano Beach, FL 33062
New Listing - 2 weeks online
$268,000
Co-Op For Sale
Active
2
BEDS
2
TOTAL BATHS
1,200
SQFT
Moonlit Waters #3C
901 N Riverside Dr
Pompano Beach, FL 33062
New Listing - 2 weeks online
$1,507,900
Condo For Sale
Active
2
BEDS
3
TOTAL BATHS
2,033
SQFT
1116 N Ocean Blvd #405
Pompano Beach, FL 33062
Pompano By The Sea Resub Subdivision
New Listing - 2 weeks online
$375,000
Condo For Sale
Active
1
BED
2
TOTAL BATHS
890
SQFT
Ocean Place #10C
1900 S Ocean Blvd
Pompano Beach, FL 33062
New Listing - 2 weeks online
$172,500
Condo For Sale
Active
1
BED
2
TOTAL BATHS
710
SQFT
2731 NE 14th St Cswy #338
Pompano Beach, FL 33062
Garden-Aire Village Sea H Subdivision
New Listing - 2 weeks online
$549,900
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,800
SQFT
The Pointe #107
2880 NE 14th Street Cswy
Pompano Beach, FL 33062
New Listing - 2 weeks online
$465,000
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,573
SQFT
Renaissance Ii #1505
1370 S Ocean Blvd
Pompano Beach, FL 33062
Open House Sat, Mar 6, 11 AM UTC
Please verify times due to COVID-19
$325,000
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
740
SQFT
Lado Del Rio #401
400 N Riverside Dr
Pompano Beach, FL 33062
New Listing - 2 weeks online
$245,000
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,150
SQFT
Palm Aire #710
3051 N Course Dr
Pompano Beach, FL 33069
New Listing - 2 weeks online
$380,000
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,020
SQFT
Bay Yacht Club #301
740 S Federal Hwy
Pompano Beach, FL 33062
New Listing - 2 weeks online
$339,000
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,188
SQFT
Voyager Condominium #805
2900 NE 14th Street Cswy
Pompano Beach, FL 33062
New Listing - 3 weeks online
$598,500
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,600
SQFT
The Renaissance Ii #2206
1370 S Ocean Blvd
Pompano Beach, FL 33062
New Listing - 3 weeks online
$170,000
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,150
SQFT
Palm Aire #403
2751 N Palm Aire Dr
Pompano Beach, FL 33069
New Listing - 3 weeks online
$419,900
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
Pompano Beach Club South #914
111 Briny Avenue
Pompano Beach, FL 33962
New Listing - 3 weeks online
$204,900
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,260
SQFT
Cypress Bend #310
2334 S Cypress Bend Dr
Pompano Beach, FL 33069
New Listing - 3 weeks online
$205,000
Co-Op For Sale
Active
1
BED
1
TOTAL BATH
772
SQFT
Fairbanks Terrace South #102
1201 S Riverside Dr
Pompano Beach, FL 33062
New Listing - 3 weeks online
$469,900
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,644
SQFT
Claridge #403
1340 S Ocean Blvd
Pompano Beach, FL 33062
New Listing - 3 weeks online
$374,900
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,168
SQFT
Nobel Point #52
1100 SE 5th Ct
Pompano Beach, FL 33060
New Listing - 4 weeks online
$149,950
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,150
SQFT
Palm Aire Country Club #209
3010 N Course Dr
Pompano Beach, FL 33069
New Listing - 4 weeks online
$859,000
Condo For Sale
Active
2
BEDS
4
TOTAL BATHS
1,638
SQFT
Silver Thatch Ocean Club #R-07
510 N Ocean Blvd
Pompano Beach, FL 33062
New Listing - 4 weeks online
$375,000
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,180
SQFT
The Waterbury Condominium #403
1401 N Riverside Dr
Pompano Beach, FL 33062
New Listing - 4 weeks online
$450,000
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,250
SQFT
Christopher House #708
Address Withheld
Pompano Beach, FL 33062
New Listing - 4 weeks online
$215,000
Co-Op For Sale
Active
1
BED
1
TOTAL BATH
595
SQFT
Riverdale Arms Coop #203
701 S Riverside Dr
Pompano Beach, FL 33062
New Listing - 4 weeks online
$219,900
Co-Op For Sale
Active
2
BEDS
1
TOTAL BATH
1,000
SQFT
Cypress Lake East #2 #15
700 SE 7th Ave
Pompano Beach, FL 33060
New Listing - 4 weeks online
$225,000
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,222
SQFT
2202 S Cypress Bend Dr #507
Pompano Beach, FL 33069
Cypress Bend 2 Condo Subdivision
New Listing - 4 weeks online
$334,999
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,265
SQFT
Parliament House Condo #829
405 N Ocean Blvd
Pompano Beach, FL 33062
New Listing - 4 weeks online
$449,000
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,433
SQFT
2900 NE 14th St Cswy #111
Pompano Beach, FL 33062
Voyager Condo Subdivision
New Listing - 4 weeks online
$210,000
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,035
SQFT
Island Club #H204
777 S Federal Hwy
Pompano Beach, FL 33062
$379,900
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,400
SQFT
Pompano Atlantis #PHD
1000 S Ocean Blvd
Pompano Beach, FL 33062
$415,000
Townhouse For Sale
Active
3
BEDS
3
TOTAL BATHS
1,593
SQFT
3390 NW 11th Ave #3390
Pompano Beach, FL 33064
New Covenant Church Plat Subdivision
$329,000
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,010
SQFT
Pompano Beach Club #1609
111 Briny Ave
Pompano Beach, FL 33062
$159,900
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,150
SQFT
Palm Aire #602
3000 N Palm Aire Dr
Pompano Beach, FL 33069
$135,000
Co-Op For Sale
Active
1
BED
1
TOTAL BATH
600
SQFT
3232 Canal Dr #16
Pompano Beach, FL 33062
Rio-Mar Apts Co-Op Subdivision
$224,777
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,078
SQFT
Island Club #L302
777 S Federal Hwy
Pompano Beach, FL 33062
$195,000
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
911
SQFT
Island Club #917C
777 S Federal Hwy
Pompano Beach, FL 33062
$475,000
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,573
SQFT
Renaissance #1405
1370 S Ocean Blvd
Pompano Beach, FL 33062
$225,000
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,100
SQFT
Cypress Bend Condo Iii #304
2112 S Cypress Bend Dr
Pompano Beach, FL 33069
Price Change - 2 weeks ago
$385,900
Condo For Sale
Active
2
BEDS
2
TOTAL BATHS
1,360
SQFT
Century Plaza Condo #212
1012 N Ocean Blvd
Pompano Beach, FL 33062
$925,000
Condo For Sale
Active
3
BEDS
3
TOTAL BATHS
1,700
SQFT
Century Plaza Condo #1208
1012 N Ocean Blvd
Pompano Beach, FL 33062