Florida's housing bubble

Home appreciation off the charts -- now what?

Business columnist Robert Trigaux of the St. Petersburg Times weighs in on the booming Florida housing market.

Indicators of the existence of a Florida bubble include the fact that four of the top five and eight of the top ten appreciating metropolitan areas in the country for the first quarter of 2005 are in Florida. The other weighty statistic is the fact that Florida median single-family homes shot up 26 percent in the last year.

While Trigaux makes no predictions, he does reference Yale University economist Robert Shiller's new book about the today's real estate market titled Irrational Exuberance. Probably not a bad idea to pick up a copy of this book to understand Shiller's perspective, particularly his comparison between this market and the dot-com boom.

As an active participant in both of the dot-com and real estate booms, I can certainly see many similarities as well as some differences. Most troubling to me in the current real estate market is the risk that investors are currently taking with interest only financing and also current ratio of investor to end-user transactions. Of comfort to me, especially in the Florida market, are the very favorable migration demographics.

Florida's housing bubble, is it ready to burst? [St. Petersburg Times]

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