Hello everyone,
It seems as though everyone thinks that real estate in south Florida is circling the toilet bowl.
And even I, as the eternal optimist, have to say it isn't as good as it used to be...for some people.
Think of this, during the past five years, home prices soared causing most of the local population to be 'priced out' of the market. Good news for sellers cashing in...bad news for someone looking for a place to put their family. The predominant category that suffered were first time home buyers. Imagine finding the house you absolutely love only to have it just out of financial reach, or worse, having it stripped away from you by another person willing to offer twenty thousand dollars more.
Fast forward to present day.
The current downward trend of home prices often portrayed by the media can be easily summed up in two words----"Buyer's Advantage." Someone purchasing can easily make an offer previously considered down right offensive hoping some nervous homeowner might gladly accept without even a counteroffer. What happens instead is the equivalent of stepping between a mother bear and her cub, upsetting the seller and insulting the buyer, who leaves and finds one of the thousand other properties that fit their criteria. The end result is leaving the property on the market for a seeming eternity and giving the media fuel for the Apocalypse.
Now, I should clarify before my numerous clients, or future home sellers, searching my website decide to light the torches and rush to Home Depot for a brand new Pitch fork. I say this; if you purchased your home prior to last year, you could still be making a decent profit. It would be wise to try and understand the dynamic of Real Estate which is in reverse of the Stock Market. Think of it in terms of a playground seesaw with one being on each end. Keep in mind, however, that they move in similar fashion.
Think of this, if you bought 1000 shares of a stock at $5/share and it rode up to $20/share you would think you made $20,0000 by spending $5000, right. Wrong.
Until you sell those shares, the amount can easily fluctuate in either direction. Some cosmic force usually requires it to go down when you want it to go up and up when you think it to going down.
If you were ever in Las Vegas, or any casino, for that matter, you can see dynamic this in action. Regardless of how many chips someone has sitting in front of them until they walk to the cage and turn those chips into cash and exit the building, it can be gone. sometimes in the blink of an eye.
Real Estate is a bit different.
A house bought for $100,000, typically won't mean you will be holding a worthless piece of paper in the end. If that property went from 100K to 300K, then proceeds to dip at a rate of 17% a year, what might the reasonable course of action be? One might choose to sell for a decent price now than to hold it until it goes down to 120K.
I hate to be the one to say it, but everything doesn't need to be doom and gloom. A positive outlook will make all the difference in the world.
Thanks for listening,
Jesse Kearney
