Recently, rumblings of another housing bubble have been emerging, but one economist says with inventories expected to rise soon, the housing market is not at threat.
Rick Sharga, executive vice president with Carrington Mortgage Holdings, told a crowd at the REOMAC 2013 Summit & Expo in Dallas on Monday that the housing market should expect things to get worse before they start improving.
But “this is not the 2005 market,” he said. “We are not creating a bubble.”
Sharga says the lack of available home inventory is the reason why home prices are rising. New-home inventories are at their lowest level in more than 30 years, he said. “Very few markets are anywhere near where we were at the peak,” he said. The markets showing some “bubble-like tendencies” are housing markets that saw the biggest declines, he noted.
LPS Applied Analytics recently predicted that home prices could rise another 35 percent without affecting affordability.
Sharga predicts that by this time next year there will be too many homes for sale. Housing and foreclosure starts are expected to start rising within the next year.
Source: “Carrington’s Sharga: We Are Not Creating Another Housing Bubble,” HousingWire (April 8, 2013)