Is Miami in a housing bubble? Could it affect the state and Jacksonville too?

[mtraininjax]

http://www.miamiherald.com/news/business/real-estate-news/article48884525.html

Lots of talk on MJ about what is going on in Downtown Miami, development, urban life.

Is Miami's housing market in a bubble? Experts say no. Or at least, not yet.

Online real estate company Zillow polled nearly 70 housing experts about which local markets across the U.S. are experiencing a price bubble.

Only four of them said Miami was currently in a bubble, although six said there's "significant risk" of one forming in the next year. Nineteen experts said we could see a bubble in the next three to five years. Thirteen said we shouldn't expect one at all. (The rest didn't have an opinion on how frothy Miami's market is.)

The experts were more worried about places where oil and tech booms have led to rapid, possibly unsustainable price increases including San Francisco, Houston and Seattle. New York City also made the list of bubble markets.

Home prices in South Florida have skyrocketed since the housing market began recovering in 2011, fueled by investors from abroad. But the growth hasn't returned the region to the heady pre-crash days. Home values still stand at about 70 percent of their all-time high in 2006, according to the S&P Case-Shiller Home Price Indices.

And as Latin American and European economies struggle, Miami has seen its pool of foreign buyers shrink and price gains slow down. Already, developers have canceled several condo projects slated for downtown.

The slowdown in price growth could be a good thing for locals. Because of low wages, Miami is one of the least affordable housing markets in the U.S. That situation would improve if paychecks catch up with prices.

[spuwho]

With the Fed finally raising interest rates you should see some temperment hit the housing sector. The suppression of rates with unemployment dropping was starting to create supply distortions.

[finehoe]

With the Fed finally raising interest rates you should see some temperment hit the housing sector. The suppression of rates with unemployment dropping was starting to create supply distortions.

The Federal Funds rate -- overnight lending rate between banks -- has little direct influence on longer-term rates, such as those found on mortgage loans. These are more likely to be influenced by moves in longer-term Treasuries, such as the 10-year.  That being said, if a .25 basis point rise is enough to slacken housing, we are in trouble.

[spuwho]

With the Fed finally raising interest rates you should see some temperment hit the housing sector. The suppression of rates with unemployment dropping was starting to create supply distortions.

The Federal Funds rate -- overnight lending rate between banks -- has little direct influence on longer-term rates, such as those found on mortgage loans. These are more likely to be influenced by moves in longer-term Treasuries, such as the 10-year.  That being said, if a .25 basis point rise is enough to slacken housing, we are in trouble.

I would agree with you except Yellen has announced rate increases for the forseeable future.  Economics isnt always about the numbers, there is sentiment as well.

[finehoe]

To cope with its recurrent flooding, Miami Beach has already spent something like a hundred million dollars. It is planning on spending several hundred million more. Such efforts are, in Wanless's view, so much money down the drain. Sooner or later—and probably sooner—the city will have too much water to deal with. Even before that happens, Wanless believes, insurers will stop selling policies on the luxury condos that line Biscayne Bay. Banks will stop writing mortgages.

http://www.newyorker.com/magazine/2015/12/21/the-siege-of-miami

That will take care of any bubble.