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Housing Inventory Drops Again. Is a Bubble in Our Future?

By Gwinn Volen

Real estate inventory in Ponte Vedra Beach dropped yet again in November with only 1.9 months of inventory, down 63% from November 2019 and down 17% from last month.  The median sale price is up 34% from November 2019. Here’s a look at November to November statistics for 32082:


Seeing home prices increase like this certainly begs the question, are we entering a real estate bubble? Here are a few things to consider to keep things in perspective.

Pandemic’s Impact on the Real Estate Market

COVID-19 has caused many sellers to hold off on listing their properties, which means the housing inventory is incredibly low. Low inventory means sellers have the upper-hand which drives up prices. The month over month increases are a little alarming, but this is a unique situation.

Once the vaccine rolls out, and our lives are more “normal,” it’s likely sellers who have been locked in a holding pattern will list their homes, and balance out the market.  And as we move towards a more typical market, with a balance of sellers and buyers, appreciation should look more typical as well.

According to this article in Florida Realtors Magazine, expert predictions for annual appreciation rates for 2021 are as follows:

  • Danielle Hale, chief economist at 5.7%
  • Lawrence Yun, chief economist at the National Association of Realtors: 3%
  • Frank Nothaft, a senior vice president and chief economist at CoreLogic: 4.1%

Recovery from the Housing Crash and Inflation

When the real estate bubble burst in 2009, home prices plummeted. There was a dramatic shift in median sale price between 2007 and 2011. Property values have been through a slow and long recovery period. While our area is now above the 2007 peak in home prices, we have to remember that there is regular inflation.


We are continuing to see a large influx of newcomers to Ponte Vedra and the surrounding Jacksonville area. Articles like this one in Bloomberg, reference Florida’s no income tax and other financial perks as reasons people are moving in our direction. Couple that with our beautiful beaches, strong St. Johns County schools, and mild weather, it feels unlikely that there will be a bubble or burst, but rather, as noted above, slower price increases.

Mortgage Process in 2020 is Decidedly Different Than 2006

In this article, NAR economist Lawrence Yun summarizes the differences between mortgage rates and the loan application process of 2006 to today. The crux of the issue behind the  housing crash:

Such a frenzy of activity, reminiscent of 2006, raises questions about a bubble and the potential for a painful crash. The answer: There’s no comparison. Back in 2006, dubious adjustable-rate mortgages taxed many buyers’ budgets. Some loans didn’t even require income documentation. Today, buyers are taking out 30-year fixed-rate mortgages. Fourteen years ago, there were 3.8 million homes listed for sale, and home builders were putting up about 2 million new units. Now, inventory is only about 1.5 million homes, and home builders are underproducing relative to historical averages.

Any buyer who has been through the loan application process in the last few years can attest to the fact that loans are not being handed out easily.


With a light at the end of the long and painful COVID tunnel, the real estate market in our area is likely to normalize.

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About the Author:

Gwinn Volen is the team lead for The Volen Group of Keller Williams Luxury International in Ponte Vedra Beach. She has a passion for real estate, research, data, and writing. In her spare time, she loves to spend time with her two teenage boys, husband, and pets.



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