Is the Real Estate bubble going to burst? We have heard this
statement hundreds of times. While there are definitely going to
be strong corrections in some overly priced markets there are
other markets that will tolerate it differently.
Most of us have seen the Real Estate cycles. In the late
Eighties and early Nineties Real Estate was in a lull. It wasn't
until the stock market decline in 1999-2001 that many people
started taking money out of stock and investing them in Real
Estate that we started to see the boom. This was also coupled
with very favorable interest rates.
Some cities are super inflated and this has caused many home
buyers to get interest only loans because they could not afford
to make payments on the traditional 15 or 30 loans. Many of
these interest only loans have principal payments and increased
interest payments coming due soon. This will force many people
who purchased on speculation to sell there home quickly. As this
begins to happen the listings on the MLS will begin to drop in
price as one desperate seller lowers his price another will
lower even further to stay competitive. We see this happening
now in major cities in California and in Las Vegas, Nevada.
Now with this understanding here is why Florida has a great shot
at riding out this burst, maybe with a small temporary decline,
only to keep a more realistic value increase.
Florida has an over abundance of job opportunity. If you live in
Florida have you tried to get your roof fixed lately? How about
fix your pool screening? Or even get an appliance fixed? You may
have seen how backed up everyone is. It is very hard to find
people to give services now. Look around and you'll see all of
the Now Hiring signs in retail stores. The Florida economy is
booming. Jobs are available.
Also, the population of Florida is fast growing. There are quite
a bit of states that are actually loosing population where
Florida is expected to grow very rapidly especially with the new
influx of the baby boomers. They are leaving there Northern
homes, retiring and moving to more moderate climate. The coastal
areas of Florida have been growing like never seen before and
it's not going to stop any time soon.
While some areas around the Country may be in danger of home and
land value decreases, most of Florida may have a small slow
down, but don't look for a big burst here. It will retain it's
value and be on the rise again. Now might be the window of
opportunity to invest.
About the author:
Jarred Scott has 14 of
Real
Estate Investing experience. Big profits can be made when
buying investment property at the right price. See which markets
are hot now.
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