The number of new homes for sale in the Southern Region (FL, GA, TN, TX, etc.) has spiked up to nearly 300,000

According to Nick Gerli, CEO of Reventure Consulting, the surge in home building has created what he describes as a "massive housing bubble" in the South. The current inventory of newly built homes for sale in the Southern region has risen to nearly 300,000, the highest level ever recorded, surpassing the previous peak during the housing bubble of 2006-2007. Gerli shared his analysis on the social media platform X (formerly Twitter), warning that this excess supply could lead to a significant market correction if demand continues to wane.

The post-pandemic surge in demand for homes is now slowing, resulting in a reduced need for new construction. This shift is causing home prices, which had previously been inflated by intense buying activity during COVID-19, to start declining. Gerli suggests that "home builders and investors speculated heavily in this housing market over the last 3-4 years, pushing prices far beyond what locals can afford." Consequently, the market is currently experiencing a bubble that appears to be on the brink of bursting.

A Broader Perspective
While Gerli's predictions suggest a bearish outlook for the Southern real estate market, some economists provide a more balanced view. Danielle Hale, chief economist at Realtor.com, points out that the housing market may be stabilizing after the volatility witnessed during the pandemic. In some Southern markets, like Austin and San Antonio, there are now more homes available for sale than before the pandemic, which has helped stabilize prices. For example, the median listing price in Austin has decreased by 3% compared to a year ago.

Hale believes that the relative affordability of the Southern housing market will continue to attract households from other regions. This ongoing influx of new residents could help cushion the market from a severe downturn.