It’s like someone let the bulls out of the cage, as the South Florida real estate market has turned upside down since early 2010. Whether we can attribute this to government stimulus intervention or a real shift in consumer sentiment, there is no arguing that both the pace of real estate sales and pending transactions have skyrocketed recently.
My personal opinion as a real estate professional? I have to say that most of this so-called “bottom” in real estate prices has been artificially created by the government’s New Home Buyer Tax Credits, as well as the Second Home Buyer Tax Credits that are now being issuing. With those scheduled to end at the end of April 2010, I have a strange feeling that the market will suddenly hit another quagmire where we bounce around a “bottom” and then wait for the next signal from interest rates or the government. additional. stimulus to start the next move in real estate prices.
As an agent, investor, writer, and industry expert, my honest opinion on South Florida real estate is that we still have to wait for some downward price adjustments. Let me clear this up so there’s no confusion… We’re generally already 40-50% off our Florida peak prices that were hit in mid-2006. When I say downward adjustment, I don’t mean we’re going to to see something. even close to that grim one more time. I expect 2010 home prices to average a 1-2% decline, a nominal decline compared to prior years… But it’s 2011 that’s the wild card. Do we get more government aid and prolong the inevitable or let market conditions dictate prices the way true capitalism intended to?
If I had to make a bet, I’d say Florida real estate prices will bottom out in the middle of 2011-2012. They will have to adjust to higher loan rates, therefore; lower affordability, which generally means lower home prices. Assuming no national tragedies, terrorist attacks or global outbreaks send markets into a haphazard tailspin once again, I expect interest rates to peak in 2011-2012 and coincide with a trough in home prices. It is at this peak time that prices will have fully adjusted to a point where affordability really comes back into play, and as interest rates begin to decline after 2012 and over the next five years, we will see a rise in prices.
All this is hypothetical and can be modified based on external and uncontrollable factors. So far, I have been correct with my forecasts. I have traded homes, traded homes, bought, sold and invested in South Florida for over a decade. In that time, I have precisely orchestrated over 500 transactions, most of them highly profitable. You don’t have to listen to me, but I think my advice is better than the thugs on CNBC who have other motives like trying to STEAL YOUR MONEY.
It’s always a good time to rent, it just has to be the right time for you.
Thank you,
Marshall Sklar Co-Founder Florida’s Best Realty
