Home sales are hot. Prices are climbing. Supplies are increasingly tight.
All these positive signs for the housing market are nice, but many wonder the same thing: Is this a new bubble, or what?
It's easy to see how today's housing market could trigger flashbacks to the frothy mid 2000s boom. Bidding wars are rampant, deals are quick, and investors and flippers abound.
But economists say there are plenty of reasons to be skeptical that the market is blowing bubbles. Homes are still undervalued. Banks are tightfisted with loans. And prices will likely cool before they burst.
There are still some strange signs afoot. But economists argue this is what an awakening market looks like, with the first signs of recovery at work.
"It's all part of this metamorphosis from the downtrodden housing market to something that resembles normalcy again," University of Central Florida economist Sean Snaith said.
"It looks like, as we're coming out of the depths, that there's a bubble forming, when really we're still trying to get back to the surface."
-- -- --
So what is a bubble? When home prices soar too high, too fast, and buyers can no longer afford the inflated values. They stop buying in an unsustainable market. Sales and prices plunge.
We're not talking about a slowdown or even a small reversal. Bubbles burst with disastrous results. Exhibit A: the local housing market circa 2007.
In Tampa Bay, median home prices peaked in 2006 at $245,000 after years of 20 percent gains. Lots of people were making lots of money selling homes at prices that didn't make a lot of sense.
Cue the explosion. In early 2011, the typical Tampa Bay home price bottomed out at $107,000. Hundreds of thousands of local homeowners were left with mortgages for far more than their homes were worth.
Fast forward to this year. April was Tampa Bay's busiest sales month in seven years. Deals are closing at breakneck speeds: More than 1,500 sales so far this year sprang from contracts signed within three days or less. And buyers aren't hesitating to pay full price.
"It's like the O.K. Corral. It's like '06 and '07 all over again," Keller Williams agent Scott Samuels said. "People are just paying crazy money."
It's hard, economists admit, to see a bubble from inside. They can span a nation or affect an area as small as a neighborhood, making them fairly hard to predict.
Some economists worry the recent flood of investors could distort the market. Fitch Ratings analysts last week called rapid price jumps "cause for concern."
"Prices seem to be being driven by something other than the fundamentals," like more jobs or higher wages, that traditionally steer a healthy market, senior economist Mark Vitner said. "I just don't think that's sustainable, or the kind of housing recovery we want to see."
But other economists argue the rebound looks so dramatic because of how deep the bust-era market sank.
They give five reasons why it's too soon to cry bubble:
1 Home prices compared with the peak? Not even close.
The typical Tampa Bay home sold in April for $150,000, an impressive $43,000 more than at the bottom, data from Realtors' multiple listing service show. But homes still sell for $95,000 below the peak.
Prices aren't everything, but they make a strong point that there's plenty of
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