Florida South homes market is declining?
After reading this article it seems that Florida South home sales are on the decline. But I have another theory that's unrelated to price.
I don't live anywhere near Florida South but the housing boom that continues in Busselton, a coastal town I live in, is sharing similar success with it's US counterpart. For the past 2-3 years we've been experiencing phenomenal sales growth in the real estate market. We built our house and land package in 2003 for a combined total of A$150,000 and today it's value is closer to A$400K.
Why the amazing values? This is where it seems to be in familiar territory with Florida South homes. Coastal properties always seem to attract more attention and buyers are always prepared to pay more for them. But there is another reason, I suspect.
It seems terrorism is getting the wealthy more jittery when it comes to investing and more importantly where they live. A large amount of recent buyers in our area and even further south are foreigners who are cashed up and willing to buy quickly and price isn't the most important variable. Safety is.
I presume that this is also the case for Florida south homes as people increasingly want to move away from the more identified metropolis' of New York and Los Angeles.
I'm interested to know from those building or selling real estate in the Florida South area whether my theory is close to the truth.
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Comments
Terrorism has little to do with it. It's location, relatively low interest rates and demand.
I'm not in Florida or anywhere near it, but I can say that your theory doesn't hold water. The housing boom that's been going on in Florida and other coastal and resort type areas has been going on for quite a lot longer than could be explained by the fear of terrorism. We were down in that area in the late 90s and the boom was going on then.
Our preference is the mountains of the western United States. We've noticed over the years that the places we like to go and were thinking about for retirement have become so prohibitively expensive that the people who have lived there their whole lives can no longer afford to pay the taxes in some cases because the value of their property has gone up so much.
Unfortunately, though, the housing boom, and the prices, doesn't just extend to areas on the coast and near resort. The same types of sky-rocketing prices of homes exist in most areas of our country, including New York and L.A.
What's happened, in my view, is that we've had a relatively long period of ultra-low interest rates and a lot of people have taken advantage of that to buy homes that they would never would have been able to in the past. As a result the demand for new and even existing homes in many areas have out-paced the supply — with the result that prices have sky-rocketed. Some people have gotten into this boom market for the investment opportunities.
With interest rates on their way up, some are predicting that what is being called the housing buble will bust, with the result that prices will drop and some people will be stuck with homes that are no longer worth the orginal price.
Terrorism has little to do with it. It's location, low interest rates and demand.
Posted by: Mike in Arkansas | February 26, 2006 8:41 PM