It’s no secret that home prices are rising in Naples Florida and surrounding markets. These increases have caused some to be concerned about the prospect of another housing bubble. Additionally, the same concerns are being seen in other U.S. markets.

However, many industry experts agree that current conditions are not conducive to those that caused the housing bubble some years back. Here is what they have said:

“Predictions of a new national home price bubble look unfounded for now, according to data.” —–Michael Fratantoni, Chief Economist, the Mortgage Bankers Association

“My view is that we are a long way from another house price bubble.”—Jack M. Guttentag, Professor of Finance Emeritus at the Wharton School of the University of Pennsylvania

“To have a bubble, you need to have construction rates higher than the perceived demand, which is what happened in 2003 to 2007. Right now, however, we have the reverse of that.”—Rajeev Dhawan, Director of Economic Forecasting Center at J. Mack Robinson College of Business, Georgia State University

“The housing market has yet to show evidence of systematic runaway asset price inflation characterized by home prices rising much faster than household income.”—Victor Calanog, Chief Economist, REIS

“I would describe this as a rebound in home prices, not a bubble and not a reason to be fearful.” –David M. Blitzer, Chairman of the Index Committee for S&P Dow Jones

“We do not consider the current market conditions to present a bubble.”—George Raitu, Director, Quantitative & Commercial Research, NAR

“The housing market is far from overheated.”—Christopher Thornberg, Founding Partner, Beacon Economics

So why have prices been increasing?

In the Naples and Southwest Florida real estate market, and other U.S. markets, there is a gap between supply (number of houses on the market) and demand (the number of buyers looking for a new home). In any market, this would cause values to increase. Here are some experts’ comments on this issue as well:

Jonathan Smoke, Chief Economist: “So does that mean we’re in a bubble? Nope, that’s just what happens when demand increases faster than supply.”

Robert Bach, Director of Research – Americas, Newmark Grubb Knight Frank: “I don’t think the housing market is overheated based on demand and supply fundamentals.”

Mark Dotzour, Chief Economist, Real Estate Center, Texas A&M University: “We are not in a housing bubble. We are in a situation where demand for houses is much higher than supply.”

Calvin Schnure, SVP of Research & Economic Analysis, NAREIT: “Given all the demand and little supply the residential market is FAR from overheated.”

To break it down, there is an imbalance between supply and demand for housing. This has created a natural increase in values, not a bubble in prices.