On The Brink of Another Housing Bubble?

Is the U.S. headed for another housing bubble?

Housing prices are creeping back up and with inventory limited, some have been predicting the B-word again – another Housing Bubble. Sparked by a run-up in demand in the face of limited supply, a housing bubble could be on the horizon. Cities like Los Angeles, Phoenix and popular beach towns in Florida have witnessed a sharp spike in investor activity, but MarketWatch’s Ruth Mantell says we haven’t entered the bubble quite yet. After crunching hard data, Mantell says the real estate market isn’t quite what it seems.

Supply and demand for condos in Philadelphia

Mantell cites the following factors which suggest that our housing bubble fears may be unfounded – at least for the immediate future.

  • Though housing inventory is limited, prices on these homes are still low, about 25 percent down from peak prices. Homes continue to be undervalued.
  • House flipping is widespread now. Mantell says this isn’t a sign of stability, but rather a “speculative market” that continues to evolve. 
  • Mortgage rates are still volatile in the wake of the last housing bubble.
  • Development of new construction homes is taking time to rebound – despite a tight inventory.  “Builders finally saw a light at the end of the tunnel. But as they approached the light, it turned about to be a 40-watt bulb, not a 100-watt bulb.”

Dean Baker, co-director of the Center for Economic and Policy Research, says “I wouldn’t say that we have bubbles today. But if prices keep rising at these rates, pretty soon you will be in bubble territory.”  Mantell reports that large price gains in the real estate market aren’t sustainable over the long-haul, especially given rising mortgage rates and income levels that have flat-lined over the years.

Jeff Kolko, one of Trulia’s chief economists says, “Even with the recent price increases, home prices nationally remain undervalued relative to fundamentals and much lower than in the last bubble. That’s why today’s price gains are actually still a rebound, not a bubble.”

The general consensus is that we’re not in a housing bubble quite yet… but are new houses really that affordable? For many prospective homebuyers in the area, market prices for condos in Philadelphiamay seem a bit inflated when considering the city’s high property taxes, cramped living spaces and questionable curb appeal.

That’s why more people are taking a closer look at Darley Green in the heart of Delaware’s Claymont Renaissance District – a quick 20-minute drive from Philadelphia.

Darley Green condos and townhomes: a better alternative

If you’ve been frustrated with the selection and price points of Philadelphia homes for sale, why not consider the new construction condos at Darley Green? Delaware living has infinite advantages, from ZERO sales tax to first-time homebuyer’s financial assistance and tax credits. And with prices starting in the low $200’s, you’ll know you can afford to enjoy the lifestyle you’ve always envisioned. Modern floor plans, gourmet kitchens, top-end appliances and up to 2,500 square feet of living space make our condos and townhouses a smart investment.

To tour a Montchanin Builders’ model home, swing by any day from 11AM to 6PM. For more detailed information about Darley Green, please call Amy Maluski, Community Sales Manager, at 302.655.2600.