Cities like Austin, Dallas, and Nashville saw an influx of new residents seeking more affordable housing options as remote work became more feasible.
Home builders in the region ramped up construction to meet this growing need for homes.
In the Southern region of the United States, there has been a significant increase in new homes for sale.
This surge in inventory has led some experts to question whether a housing bubble may have formed due to heightened demand during the COVID-19 pandemic.
With the trend of remote work now slowing down and demand for homes decreasing, there is concern that prices may have gone too high for what locals can afford, creating a potential bubble in the housing market.
In recent years, there has been a significant increase in the number of new homes for sale in the Southern region of the United States. This surge in inventory has led some experts, such as Nick Gerli, to question whether a housing bubble may have formed in this area due to heightened demand during the COVID-19 pandemic. Cities like Austin, Dallas, and Nashville saw an influx of new residents seeking more affordable housing options as remote work became more feasible. As a result, home builders in the region ramped up construction to meet this growing need for homes. However, with the trend of remote work now slowing down and demand for homes decreasing, there is concern that prices may have gone too high for what locals can afford, creating a potential bubble in the housing market.
According to data from Realtor.com, the number of new homes for sale in the Southern Region has reached an all-time high of nearly 300,000. This is significantly higher than pre-pandemic levels and represents a substantial increase in inventory. If demand does not keep pace with this elevated supply, it could lead to a decline in home prices and potentially trigger a housing market crash.
While some experts are warning of a potential bubble, others believe that the market is simply adjusting to new circumstances. As always, it's important for buyers and sellers to stay informed about local real estate trends and make decisions based on their individual needs and circumstances. In the meantime, it remains to be seen whether this surge in inventory will lead to a housing market crash or if the Southern region will weather this shift in demand without significant consequences.
The housing market is just beginning to come out of its leanest few years in history.
There is currently a 4.4-month supply of both new and existing homes for sale, with a nine-month supply of newly built homes for sale.
Single-family homes in a residential neighborhood in San Marcos, Texas.
The unusual dynamic between new and existing home inventory is due to recent swings in mortgage rates and an unprecedented disaster in the housing market that began 20 years ago with the subprime mortgage boom.
By 2012, new homes made up just 6% of the total for-sale supply.
Housing starts shot up to 1.1 million in 2021 due to pandemic-driven demand and lower mortgage rates.
Millions of borrowers refinanced at low interest rates, causing them to not want to move as they would face higher current rates around 7%.
The share of homes sitting on the market for at least one month has been increasing year over year since March 2022.
Accuracy
Prices went far above what locals can afford during pandemic-era demand, creating a bubble.
Deception
(50%)
The article is somewhat misleading in its portrayal of the housing market. It claims that there is a 4.4-month supply of both new and existing homes for sale, which may lead readers to believe that the housing market has sufficient inventory. However, this number is still below the six-month supply considered a balanced market between a buyer and a seller. The article also highlights the high supply of newly built homes, but it does not mention that this supply is not translating into lower home prices due to strong demand and limited resale inventory in the lower-end price tier. Additionally, while the article discusses how mortgage rates have affected both homebuyers and builders, it does not disclose any sources for these claims.
The numbers, however, are deceiving due to the unprecedented dynamics of today's housing market...
Fallacies
(85%)
The author commits the fallacy of Dichotomous Depiction by presenting a false dichotomy between the supply of new and existing homes. The author states that 'The numbers, however, are deceiving due to the unprecedented dynamics of today’s housing market' and later writes 'This separation makes it clear that an evaluation of current market inventory cannot simply examine either the existing or the new home inventory in isolation.' However, this does not mean that there is a problem with the supply of newly built homes being too high. Instead, it highlights how unusual and complex the current housing market is. The author also uses inflammatory rhetoric by describing mortgage rates as 'millions of borrowers refinanced at the lows and now have no desire to move because they would have to trade a 3% or 4% rate on their loans to the current rate, which is around 7%.' This statement implies that homeowners are irrational for not wanting to move due to mortgage rates, but it does not provide any evidence for this claim.
]The supply of newly built homes appears to be way too high.[
This separation makes it clear that an evaluation of current market inventory cannot simply examine either the existing or the new home inventory in isolation.
A real estate analyst, Nick Gerli, has suggested that a housing bubble may have formed in the Southern region of the US due to a substantial increase in new homes for sale.
The number of new homes for sale in the Southern Region (FL, GA, TN, TX, etc.) has reached an all-time high of nearly 300,000.
Prices in the Southern housing market went above what locals can afford, creating a bubble.
Accuracy
The number of new homes for sale in the Southern Region has reached an all-time high of nearly 300,000.
Some housing economists suggest that the housing market may be normalizing after the volatility witnessed during the pandemic.
Deception
(30%)
The author makes editorializing statements and uses sensational language to grab the reader's attention. He implies that a 'massive housing bubble has developed, and is about to pop' in the South without providing any concrete evidence or peer-reviewed studies to back up his claim.
This is the highest level of all-time. Even higher than the previous bubble peak in August 2006. Before the massive crash.
A massive housing bubble has developed, and is about to pop, in the South.
Fallacies
(85%)
The author makes an assertion about a 'massive housing bubble' in the South based on one analyst's opinion without providing any evidence other than the analyst's statement. This is an example of an Appeal to Authority fallacy. The author also uses inflammatory rhetoric by describing the situation as a 'massive housing bubble about to pop'.
"A massive housing bubble has developed, and is about to pop, in the South."
"This is the highest level of all-time. Even higher than the previous bubble peak in August 2006. Before the massive crash."
Bias
(90%)
The author, Omar Mohammed, expresses a clear bias towards the idea that a housing bubble has formed in the Southern region of the US and is about to burst. He quotes Nick Gerli multiple times to support this assertion and uses language like 'massive housing bubble' and 'popping'. The author does not provide any counterarguments or perspectives that challenge this view.
A massive housing bubble has developed, and is about to pop, in the South.
I know this sounds very bearish on Southern real estate. But ultimately it’s pretty simple. Home builders and investors rampantly speculated in this housing market the last 3-4 years. And prices went far above what locals can afford. And created a bubble.
Now that bubble is - slowly - popping.
The number of new homes for sale in the Southern Region (FL, GA, TN, TX, etc.) has spiked up to nearly 300,000. This is the highest level of all-time. Even higher than the previous bubble peak in August 2006.
The supply of new homes in Southern US states has surged significantly, potentially creating a housing bubble.
During the pandemic, cities like Austin, Dallas, and Nashville saw an influx of new residents seeking more affordable housing.
Home builders in the Southern states ramped up construction to meet the growing need for homes.
The number of new homes for sale in the Southern Region has reached nearly 300,000 - the highest level on record.
Prices went far above what locals can afford during pandemic-era demand, creating a bubble.
Accuracy
No Contradictions at Time
Of
Publication
Deception
(30%)
The author makes several statements that imply a housing bubble in the Southern US based on increased construction and decreased demand. However, he does not provide any concrete evidence to support this claim beyond anecdotal data and opinions from one analyst. The article also includes quotes from other experts who offer differing perspectives, but the author does not acknowledge or address these opposing viewpoints.
A massive housing bubble has developed, and is about to pop, in the South.
The number of new homes for sale in the Southern Region (FL, GA, TN, TX, etc.) has spiked up to nearly 300,000. This is the highest level of all-time. Even higher than the previous bubble peak in August 2006.
Prices went far above what locals can afford, creating a bubble.
Fallacies
(85%)
The author makes an appeal to authority fallacy by quoting Nick Gerli's analysis of the housing market and stating that a 'massive housing bubble has developed, and is about to pop, in the South.' The author does not provide any reasoning or evidence of their own to support this claim.
“A massive housing bubble has developed, and is about to pop, in the South.”
“This is the highest level of all-time. Even higher than the previous bubble peak in August 2006, before the massive crash.”
Bias
(80%)
The author expresses a clear bias towards the idea that there is a housing bubble in the Southern US housing market. He quotes Nick Gerli multiple times to support this assertion and uses language like 'massive housing bubble' and 'popping' to depict the situation as extreme.
A massive housing bubble has developed, and is about to pop, in the South.
This is the highest level of all-time. Even higher than the previous bubble peak in August 2006, before the massive crash.
The US housing market has experienced a record inventory crisis for the last four years
Of the new home inventory for sale, only about 20% are completed and approximately 80% are under construction or not yet started
Accuracy
There is currently a 4.4-month supply of both new and existing homes for sale, with a nine-month supply of newly built homes for sale.
Prices in the Southern housing market went above what locals can afford, creating a bubble.
Deception
(80%)
The article provides a detailed analysis of the US housing inventory situation, but it makes several statements that could be considered misleading or selectively reported. The author states that 'there's a lot of false information about the US housing market and the level of inventory,' but he does not provide any evidence to support this claim. He also implies that there is a significant difference between existing and new home sales volumes, but he fails to mention that new home sales represent only a small fraction of total home sales in the US. The author states that 'the existing home market has a monthly supply of 3.7,' but he does not explain what this means or how it compares to historical levels. He also states that 'the new construction market is way above the balanced 6.0 level and there are price cuts and discounts in that market,' but he does not provide any data to support this claim or explain why it is significant. The author's use of language such as 'false information,' 'significant difference,' and 'way above' could be considered emotionally manipulative or sensationalist.
The existing home market is almost six times larger in terms of sales volume than the new construction market.
There’s also a lot of false information about the US housing market and the level of inventory, so in this article, we’ll uncover the true inventory situation across the entire US housing market.
Of those 479,000 new home units for sale, only 20% are completed,
Fallacies
(85%)
The author makes several appeals to authority by citing various sources such as BLS, BEA, Census Bureau, and NAR throughout the article. While these sources lend credibility to the data presented in the article, they do not necessarily validate the author's interpretations or conclusions. Additionally, there are instances of inflammatory rhetoric used to describe certain situations in the housing market such as 'very unhealthy,' 'crazy unhealthy,' and 'dramatic price cuts.' These statements are subjective and may be interpreted differently by others.
]The existing home market has a monthly supply of 3.7, which is very low, but it's been increasing since the absolutely historic level of 1.6 in January 2022.[
Normally, between 20% and 30% of new construction inventory is completed.
During really bad downturns like 2008, builders were sitting on almost 50% completed inventory.
