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"I can't count how many foreigners bought recently (Canadians etc..),"
Yep. Heard it before. Matrix Re-Loaded. (Don't mind me, I'm a cynic)
Don't mistake me for a real estate investor (or would-be investor). I'm not. I've only ever bought and sold six properties in my lifetime, and all of those were to live in. It's just been dumb luck that I've made money each time I sold, sometimes a halfway decent amount, sometimes just a few shekels left over after closing for a down payment on the next place. And I never put much money into fixing up a place, anymore than I absolutely had to in order to keep the roof from leaking or the AC running or the toilet flushing. Granite countertops were never my thing, but it sure was fun watching a prospective buyer envision that nasty old formica transformed into Corian with a shepherd's crook faucet poised gracefully over the kitchen sink.
Don't tell Home Despot, but sometimes you make more money by NOT fixing up a house and selling it than you do by going all in for improvements.
People from all over have been buying here, and depleting the supply of houses available at an astonishing rate since the crash. This area of SWFL has been bought up over the past few years by stable well financed cash buyers most of whom are looking for long term retirement (or recently retired), or coming from other areas of the country that are far worse than here.
Blackstone has been buying in the Tampa area for a while - I heard (unconfirmed) that their goal up there was about 15,000 homes. The whole area (80,000) homes, and other large equity firms are following suite. The reason is the programs the government has put in place, and the low interest rates and money that the Government is pumping into the markets. The prices of housing (and those in Blackstone's target range are at or near cost. They have examined the growth curve of them over the past several years, and the set-backs and have done their homework. They aren't the only ones.
The market has turned in this area before Blackstone began purchasing, and they have moved south of Sarasota in their acquisition efforts. As they deplete the supply, they will drive up the prices, and they will have no problem renting the houses they procure. There are a lot of waiting lines for decent apartments in this area. If you know how to run the numbers on the rent vs. mortgage side the returns are huge - and they are doing it in bulk, and not paying the interest (except paying a return on investment capital of their investors). That doesn't touch the equity gains they should be making in the next few years.
I like the conversation you guys are having - good back and forth.
If prices of housing is going to rise quickly in Florida, I couldn`t tell. But there was one major factor that made us buy our house in SWFL:
The price to buy the house in 2012 was about half of the price of building it in 2006! To me that is bargain enough.
However, it is the quality of the area that counts the most. Whatever we sell the house for sometime down the line - is just a nice afterthought..but I hardly believe prices will drop any.
As some has pointed out, foreigners shouldn`t be counted out. We are Norwegians, our neighbors are Swiss and Canadian...
"This area of SWFL has been bought up over the past few years by stable well financed cash buyers most of whom are looking for long term retirement (or recently retired)"
Where have I heard that before? (are they well financed or buying cash? Of course, you might say that buying cash is indeed well financed. Cash is king!)
"They have examined the growth curve of them over the past several years, and the set-backs and have done their homework. They aren't the only ones."
Where have I heard that before? (BTW, a couple of acronyms for you: AIG, LTCM. They were geniuses, too! Then there's Bear Stearns, Countrywide, etc., etc.)
"As they deplete the supply, they will drive up the prices"
Where have I heard that before?
"There are a lot of waiting lines for decent apartments in this area."
Yes, we ran into this when the bubble stalled, and had to bide our time in a dangerous dump for a year. After that, I rented a sweet 2 BR condo on the water for $600/month.
"the returns are huge"
AHA! So, Blackstone is doing with real estate what the quants do with the stock market. Suck 'em in, shake 'em out. Interesting. Of course, the rewards will not be as immediate, but a dump of housing stock will be interesting to watch in the future.
"foreigners shouldn`t be counted out."
Heard that one, too. I had a buddy over in Orlando who was an appraiser (couldn't get work during the bubble because he refused to "hit the numbers" for the mortgage brokers) called in after the bust to evaluate an almost entirely abandoned subdivision in Orange County. What a mess. Most of the (unlocatable) homeowners were from England or South America. Many had filed for (and received) homestead exemptions.
"This area of SWFL has been bought up over the past few years by stable well financed cash buyers most of whom are looking for long term retirement (or recently retired)"
Where have I heard that before? (are they well financed or buying cash? Of course, you might say that buying cash is indeed well financed. Cash is king!)
"They have examined the growth curve of them over the past several years, and the set-backs and have done their homework. They aren't the only ones."
Where have I heard that before? (BTW, a couple of acronyms for you: AIG, LTCM. They were geniuses, too! Then there's Bear Stearns, Countrywide, etc., etc.)
"As they deplete the supply, they will drive up the prices"
Where have I heard that before?
"There are a lot of waiting lines for decent apartments in this area."
Yes, we ran into this when the bubble stalled, and had to bide our time in a dangerous dump for a year. After that, I rented a sweet 2 BR condo on the water for $600/month.
"the returns are huge"
AHA! So, Blackstone is doing with real estate what the quants do with the stock market. Suck 'em in, shake 'em out. Interesting. Of course, the rewards will not be as immediate, but a dump of housing stock will be interesting to watch in the future.
"foreigners shouldn`t be counted out."
Heard that one, too. I had a buddy over in Orlando who was an appraiser (couldn't get work during the bubble because he refused to "hit the numbers" for the mortgage brokers) called in after the bust to evaluate an almost entirely abandoned subdivision in Orange County. What a mess. Most of the (unlocatable) homeowners were from England or South America. Many had filed for (and received) homestead exemptions.
I think it is a great idea that you remain a good listener. ;-)
Its not the right time to buy for everyone - that's for sure.
And, in fairness, Blackrock and the others buying things up (I believe you may not) will manipulate the market (with the current government policies), and it may be the beginning of another bubble (short or long term - who knows?), or it may have no effect at all. I don't predict the future or make guarantees, but I do invest my own money on things I believe in, and I think housing prices are going to rise here (for the near future) faster than any other market I can put my money in. I've heard that before (oh wait - I hear it again! yep - for sure - it was me talking). ;-)
Be resistive to opportunity - if it works for you.
Be resistive to opportunity - if it works for others.
Be resistive to opportunity - will you be better off?
Is there an opportunity to be made?
Are there ever opportunities?
Can you create an opportunity? Out of anything you see?
If you grasp an opportunity - will you fail?
Points to ponder by - BH
Last edited by Big House; 11-20-2012 at 07:16 AM..
"Blackrock and the others buying things up (I believe you may not)"
No, I'm not buying just yet, but when I do, it won't be in SW Florida. Might be up here in the Tampa Bay area, though, unless we move out of the state.
The main reason I chimed in on this thread is that I don't want to see people who may not be in a position to take a hit in the future, get seduced by hype. During the bubble, I heard it ALL. People boasted that they could afford the price of the home they bought, they were buying it to live in and if prices fell (which they did, and hard) so be it. What a load, because I've since heard all the sob stories and how bad the banks are, and they're not going to pay another dime on their mortgage and they'll just stop paying and the government should help them and blah, blah, blah. Although in a way, I can't blame them, because people look and see that the big guys get bailed out and many don't suffer for their investing mistakes, so why shouldn't they have the same considerations (at their own level)?
What I resent is working and paying taxes so others can get bailed out.
What we have going on is "extend and pretend". Are housing prices going up in this part of Florida? I guess. And, if you own real estate and sell real estate, it's not a bad idea to talk your book and add to the hype, because maybe you can get out from under before the real SHTF.
"I think housing prices are going to rise here (for the near future) faster than any other market I can put my money in."
Fair enough. Are you in a position to get out fast if events turn against housing prices? It's not like selling stock. A house usually takes at least a month or two to sell, if you're lucky.
Kmarc, your concerns are valid. However, I believe you are comparing the area this forum was intended for with other areas. South of North Port the housing market was crushed way beyond most areas, even the Tampa area. I think we are one step ahead of most of the country, I believe we already hit the capitulation stage.
I bought my canal house almost 4 years ago for 25% of what it was "worth" in 2006. I was a little early....big deal. I've seen the slight dip, and impressive bounce in RE prices since then. Calling the exact bottom in any investment is next to impossible. Those that make the most money investing are those that buy "close enough" to the bottom in a buyer's market. That is much better than chasing the market up and doing irrational things in a seller's market.
"Those that make the most money investing are those that buy "close enough" to the bottom in a buyer's market."
And then sell close enough to the top in a seller's market. That was our strategy when we sold just ahead of the market stall in late 2005. And even then, as we were headed toward closing, someone with a legal background tried to persuade us to void our contact and sell to them for $5,000.00 more. I refused to consider it, but it was an interesting sign of the times. Spouse was a little upset with me, but I felt that a contract was a contract and a bird in the hand and all that. We did the right thing and it paid off.
"That is much better than chasing the market up and doing irrational things in a seller's market."
Agreed. And it may well be that you and BH are correct in your assessment of the market. I do think the rise will be short term, though. Just my opinion.
I have no problem at all with people seeking an investment that will bring them some sort of a return. For most people, the stock market is just not an option as they do not have the resources and knowledge to invest in the climate of today. Day trading is not for the faint of heart.
I do think there are some opportunities for value investing. There always will be.
"Those that make the most money investing are those that buy "close enough" to the bottom in a buyer's market."
And then sell close enough to the top in a seller's market. That was our strategy when we sold just ahead of the market stall in late 2005. And even then, as we were headed toward closing, someone with a legal background tried to persuade us to void our contact and sell to them for $5,000.00 more. I refused to consider it, but it was an interesting sign of the times. Spouse was a little upset with me, but I felt that a contract was a contract and a bird in the hand and all that. We did the right thing and it paid off.
"That is much better than chasing the market up and doing irrational things in a seller's market."
Agreed. And it may well be that you and BH are correct in your assessment of the market. I do think the rise will be short term, though. Just my opinion.
I have no problem at all with people seeking an investment that will bring them some sort of a return. For most people, the stock market is just not an option as they do not have the resources and knowledge to invest in the climate of today. Day trading is not for the faint of heart.
I do think there are some opportunities for value investing. There always will be.
In any case, I think we all agree - you have to be very careful when investing in real estate. If you read some of my other posts, I think you will find that I inform people about a lot of the care needed if you do buy, and how you buy. I never try to sell anything here. When buying there is a lot to know, that many people don't understand (especially if you want to compete with investors in the foreclosure market). That said, there are a lot of great really deals out there! Buyers need to be informed, and I provide a lot of information (for all buyers to think about), including those that want to compete in riskier buying arenas.
For those that want to buy I have given them information that sellers like to see, so they can offer the strongest offer.
And, you are correct, there are alway opportunities to invest in real estate, and there is risk as well.
I agree this area is different than many areas of the country - it has turned here (hope it continues), and I hope other areas improve - this country sure could use it (with out all the manipulations).
I am going to move to Punta Gorda as soon as my house here in NJ sells. I am very concerned about the cost of living in PG. The house we are interested in buying is 2400 sq ft. It is a 20 yr old house but has been completely redone in 2008. It has hurricane impact windows & doors. Roof has tie downs & there is a 2 cycle condenser for A/C. The pool is salt water. Does anyone have a ballpark figure on what our monthly expenses will be. It is not in a flood zone but in a gated community, Harbour Oaks. Any info will be much appreciated.
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Granite countertops were never my thing, but it sure was fun watching a prospective buyer envision that nasty old formica transformed into Corian with a shepherd's crook faucet poised gracefully over the kitchen sink.
The Matrix Re-Loaded
