By Fredrick

May 4, 2006 03:23 PM | Link to this

I have been a real estate investor for over a decade. I think the market in this region went unchecked for years. As the fraud ridden stock market caused people to lose their holdings, (and by the way, it’s still fraud ridden) people naturally looked to other investment sources including precious metals and real estate. Markets that actually have tangible value. Our local market then gradually became over-built and investors felt comfortable buying properites as lending practices waned. This fed the frenzy in certain regional markets world wide. The problems I see are that novice investors took risks they have not been prepared to accept when markets shift. Also, far too many investors focused only on South Florida. Savvy investors looked elsewhere including other regions around our great state. Smart investors also looked outside our state and country where other wonderful opportunities presented themselves and still exist today. The other inherent problem we have is the media. If it doesn’t bleed it won’t read is their mantra. Remember the hype the media caused around Y2K in the late 90’s? I firmly believe this has been fueled by the large financial firms. As the stock market bubble burst in 2000, investors large & small withdrew monies from that market and looked elsewhere. Financial firms are in busines to make money and if people aren’t investing, they lose out. The financial firms have significant clout and thus engaged the services of public relations firms. This planted the seed to undercut real estate investments which by the way have carried our nations economy for the last 6 - 7 years. The PR agencies hired by the financial firms have infiltrated our media outlets and caused a fire to stir. The bottom line is that if people believed everything the media pushed out into the public, one would never leave their home. My take is that our local real estate will stay where it is for a while. Those who can ride out the wave will be fine. Interest rates are still at affordable levels even with the fed inching things up. We have approximately 300 people on average per day moving into this region. They all can’t sleep in their cars, rent hotel rooms or stay with relatives forever. Our employment rate will continue to stay low with jobs plentiful so our housing market (rental & buyer) has to correct itself at some point. As a real estate investor, I firmly believe in this market and will continue to uncover opportunities.

By Mark

May 4, 2006 05:15 PM | Link to this

I could not agree more with Fredrick. I have been a real estate investor for about 20 years. I will generally stay out of the game during the speculative market. I keep telling people and they keep looking at me like I have 2 heads, “Now Is When You Make Money In Real Estate”. I have been moving into a cash position in order to take advantage of helping those individuals out that are in over their heads.

By gene

May 4, 2006 05:24 PM | Link to this

You must be a contrarian…Sell when the rest are buying and buy when the rest are selling…

By

May 4, 2006 10:58 PM | Link to this

Funny thing is people say all these people are moving to Florida per day. Ok fine do they know that the taxes on there homes are 2% of the purchase price? folks that means $10,000 on a 500k home. Now throw in the insurance rates, and the homeowner association fees. Hello can you say wake up and smell the bubble. There is no way in the world any retire from NYC is moving down here and paying 2% throwing his money away on taxes. Let’s get real taxes in Nyc are $2000 to $3500 on 2 million dollar homes.

By william

May 4, 2006 11:12 PM | Link to this

Do people realize how bad the crime rates are in South Florida? Miami is #3 in the United States out of big cities for highest crime rates. West Palm Beach is in the top 10 for violent crimes, throughout the States. The entire county of Palm beach is loaded with crime no one is accountable from the Police Chiefs to the Mayors. This is one reason prices will drop a lot

By raymon hamilton

May 5, 2006 08:07 AM | Link to this

Pat Certainly enjoyed speaking with you yesterday. I look forward to seeing what comes of the homes on Jamaica Dr. 33410. Also a little update on Pahokee. As you know the city has finally begun to see the housing prices begin to climb which will help our tax base a great deal. Two properties which have sold which need to be reported to you. 2443 E. Main Street. and also a house on South Flame Ave, purchased by Ruby Starks. The 2443, purchased in August, for 80,000.00, sold in April for 165,000.00 The Flame address was purchased for 115,000.00 and sold a few months later for 255,000.00

Hope ya’ll have a good day. Raymon Hamilton

By Steve

May 5, 2006 10:29 AM | Link to this

The South Florida real estate boom was driven by low interest rates, a lack of alternative investments after the stock market crash, and, what at the time was affordable housing. Now that interest rates have risen, and the housing is not longer affordable to the middle class, it’s hard to imagine much upside. Add in the high cost of property taxes and insurance, and it’s easy to see how prices could adjust downward. Personal income has not keep pace with spiraling real estate costs, and it is now much cheaper to rent than own, so where is the justification for high prices? If you think 300 people a day will continue to move into this type of environment, I have to seriously question that assumption.

By Greg

May 5, 2006 01:23 PM | Link to this

In my opinion the market is definitely stalled. Now will it regain momentum or will it fall? I think that will be determined by what happens to the price of oil (and energy in general). If oil keeps going up then we will have inflation. In response the Fed will raise rates. Since most homeowners are deep in debt (mortgage, cars, credit cards, etc) this will be a double whammy to them. Their variable rate mortgage will go up at the same time that all of their other expenses go up. If energy costs stay high (or go up even more) over the next three years then I see a flood of homes getting listed and many foreclosures. If this scenario were to happen then I think 3-5 years from now will be a good time to be buying. Of course if someone can fix the energy problem then we won’t get inflation and a year or two from now the market will resume its upward trend. In my opinion now is the time to wait and watch.

By Tomas

May 5, 2006 04:08 PM | Link to this

One more hurricane hitting south florida and I think that will be the the cause for a mad rush for the exits. Talk about a bubble bursting.

By

May 5, 2006 05:07 PM | Link to this

Does not matter if hurricanes hit or not, the taxes on these prices will not allow people to afford these homes. Market will tumble downward. There are so many condos for sale and rent and just empty, in Downtown West palm and Ft. Lauderdale and Miami.

By Enzo

May 5, 2006 07:40 PM | Link to this

Well, people in Florida don’t know how cheap housing is there, you should try California. Your 600k homes cost 1.2 here, your 1.2 homes cost 2mil+. Houses in Florida are a steal.

Florida is going through a slight softening as everyone wants to cash out and higher interest rates along with the price increases slow speculation. Houses were a deal at 400k, now that things have doubled, 800k is too steep for local markets to support.

Long term, Florida real estate will grow, gro ,grow. Baby boomers are retiring and Florida can expect 7 million new residents over the next 10-15 years alone.

Interest rates will taper off soon too. Remember, in 15 years, you will be laughing at today’s prices.

By KBrown

May 6, 2006 11:09 AM | Link to this

I disagree with the last posting. I don’t think Florida’s job market read: salaries will escalate as they would need to for family and single family affordability.

Fort Lauderdale has lots of singles (me included) who don’t necessarily need a 3/2. I do need a yard for my dogs. The biggest complaint I hear and what I have is the pet policy for most condos. Also, $250,000 for a 2/2 is just too much. Blame the condo conversion market for the spiral. Investors are selling studios for 139K. Unless you really must live in Fort Lauderdale, why spend that. Go to NC, GA, even AL if you can stand the weather and your money will go further read: property/land.

As a native Floridian I can honestly say the tried and true market ploy Florida’s “great weather” is fading fast. People are looking for quality of life. They don’t want to be an egg throw from their neighbor, they want good schools (which Florida has serious issues with), they want their children to graduate, they want low crime and they want to make decent wages. Florida legislator will have to improve tremendously regarding the urban sprawl, the ridiculous crime wave which of course is directly linked to low wage/low income/sub standard education.

I love Florida. As a single black woman, no children, college educated. I am seriously considering relocating to another state. You do not get what you pay for in Florida and I want my money to go further. Even North Florida is having issues. Quality of life has to improve. Florida needs to improve on its tolerance of others. For the diversity in this state I am shocked by the mean spirited nastiness everyone has towards one another. For this to be the Bible belt…the compassion for others is just not here. There is a nasty undercurrent of racial/economic and sexual orientation hostility between EVERYONE that is simmering just below the surface. Why be bothered when you can go to other cities and pat 150K get a nice yard, nice neighbors that don’t care if you are green, good schools, etc.? Second the traffic. Florida’s drivers too often are UNSAFE! Apparently, anyone with a pulse can get a license.

Customer service in this state is also lacking. There are so many other factors/dynamics not being discussed.
I agree with the first poster: “snowbirds” are looking at the financial picture AND the quality of life. The weather is great but does it matter when the condo is small, and you are afraid to go outside?

Cities need to look at improving the poor neighborhoods. Opalocka is a perfect example of what is wrong with government. What used to be a great airport hub is now a messy, crime infested disgustinginly unkempt eyesore. Everyone blames black people but often the blacks are renting and the landlords do not keep the property maintained. The black owners are usually old and are just as upset with the tackiness of the neighborhood. But if you have an element that just doesn’t give a care about the property-what do you do? You sell to someone who also doesn’t care and you move on. And this is why it deteriorates.

If you are renting you do not have a vested interest to give a damn. Because again, Florida’s education system is so bad, students are graduating with low skills and are not job savvy. There is no excuse for crime but the relationship is there.

I simply think everyone that was in the 250K-500K market has bought. That leaves the rest of us middle class, working class joes scratching our heads and wondering is it worth buying a 250K condo with HIGH taxes, HIGH association fees etc.

The division between classes is driving the market. What can the middle class afford?