The Miami housing market is at high risk of a housing bubble, according to a new study which found that the gap between the price of for-sale homes and rent in the Florida city has massively increased over the past 15 years.
With a score of 1.73, the Magic City topped this year’s UBS Global Real Estate Bubble Index, ahead of Tokyo (1.59) and Zurich (1.55). The next American city on the list was Los Angeles, which took the fourth spot with a score of 1.11.
Any rating above 1.5 is considered a high level of risk, while a rating between 1 and 1.5 is elevated, a rate between 0.5 and 1 is moderate, and below 0.5 is low.
When Is A Market At Risk Of A Bubble?
A housing bubble typically happens when home prices rapidly surge—inflated by soaring demand, speculation, and limited supply—well beyond properties’ fundamental values. Usually, the bubble bursts when the situation becomes unsustainable, with prices being too high for buyers to stay engaged in the market…