Is Sarasota in a bubble (insurance, buying a house, buying)

[MiaMiaMoi]

Originally Posted by Brianmedia

How is this thread aging.... No bubble burst so far, and sales seem thru the roof across the board YoY

https://www.myrasm.com/wp-content/up...10_Summary.pdf

Do you still see the sarasota market completely falling apart in 2021?

Do you know how long it took for people to wake the hell up prior to 2008?? business cycles are affected by all kinds of variables... such as health issues, shut downs, population migration, demand, supply, etc


The market here is overpriced and any dispassionate observer can see it, if they have clear vision.


Bubbles take a wee bit time to "burst". No markets go up n a straight line. But go ahead, strap on a house at this time, I'll just wait and watch, I have time.

[beach43ofus]

Originally Posted by Brianmedia

How is this thread aging.... No bubble burst so far, and sales seem thru the roof across the board YoY

https://www.myrasm.com/wp-content/up...10_Summary.pdf

Do you still see the sarasota market completely falling apart in 2021?

So long as the big cities up North continue to clear out, Florida will prosper, and prices will escalate even more.

The land near the Gulf is filling up fast. There are no large swaths of land West of the Trail (41) or 776, anymore that I know of. I'm talking swaths that could hold a 1,000+ single family home community.

After Wellen Park is built out, that will be it. Then the growth pushes inland.

In 2-3 years, the interest on the national debt will take over the economic news. & I think that will be the next big plunge. We are now paying more interest on the debt, than we spend upon national defense. It's an 800 pound gorilla. Also, wach the value of the dollar vs swiss franc, & Chinese yuan.

[Brianmedia]

Originally Posted by beach43ofus

So long as the big cities up North continue to clear out, Florida will prosper, and prices will escalate even more.

The land near the Gulf is filling up fast. There are no large swaths of land West of the Trail (41) or 776, anymore that I know of. I'm talking swaths that could hold a 1,000+ single family home community.

After Wellen Park is built out, that will be it. Then the growth pushes inland.

In 2-3 years, the interest on the national debt will take over the economic news. & I think that will be the next big plunge. We are now paying more interest on the debt, than we spend upon national defense. It's an 800 pound gorilla. Also, wach the value of the dollar vs swiss franc, & Chinese yuan.

Thanks for the informative response.

In every major city I've lived in since the 2008 crash, at some point down the road lots were saying "it's overpriced", as prices just continued to climb. We decided to buy a house in Denver in early 2019 not knowing if we wanted to stay due to the crazy real estate market. even then there was lots of talk of "it's overpriced". Glad we did as our house is set to sell for over $80k more than we paid for it (before down payment) in just under 2yrs.

My thought process for buying in Sarasota (even though those say it's way overpriced) is purely based on we don't "plan" on moving again, and I can't see a 2008 style crash coming anytime soon, so just going to buy and not worry about perfect timing.

[gitondowntheroad]

Originally Posted by Brianmedia

My thought process for buying in Sarasota (even though those say it's way overpriced) is purely based on we don't "plan" on moving again, and I can't see a 2008 style crash coming anytime soon, so just going to buy and not worry about perfect timing.

For those of us natives that have actually lived here for a long time, we remember the idiots saying the identical thing prior to 2008.


Any fool, like then, can see NOW that key market segments are "fully priced". And the high-end is a totally different market.


Also, the absolute worse thing a buyer can do is pay for a house in CASH, with rates below 3%. A house is an illiquid, so-called "asset"....it's a HOUSE not a "cash equivalent"...a place to eat, sleep, recreate and eventually DIE.


Enjoy the rush, but keep your real assets real assets.

[Mlapiano]

My 2 cents, if there is a bubble pop, I do not think the gulf will get hit hard because of the combination of "COVID MIGRATION" and regular migration. People are fleeing the densely populated urban centers like the plague (To make a pun).
But time will tell, all indicators say that come March will start seeing major numbers rise in foreclosures and evictions.

I still say the gulf won't experience a huge reset compared to some other markets IMHO.

[beach43ofus]

Originally Posted by Mlapiano

My 2 cents, if there is a bubble pop, I do not think the gulf will get hit hard because of the combination of "COVID MIGRATION" and regular migration. People are fleeing the densely populated urban centers like the plague (To make a pun).
But time will tell, all indicators say that come March will start seeing major numbers rise in foreclosures and evictions.

I still say the gulf won't experience a huge reset compared to some other markets IMHO.

Which indicators? Unemployment? Rising mortgage delinquencies rates? I'm curious to know what you are seeing.

There are so many cash buyers (like us) coming to Florida, any downturn cannot decimate our market like elsewhere. WE have more built-in resiliance.

[Marysa Butzke]

Why would any experienced house owner be silly enough to put hundreds of thousands of cash dollars into a simple residence for shelter and enjoyment when interest rates on a mortgage in many cases can be obtained <3%. A house is not an investment to start with. An investment has to offer a return. That return is only realized upon a profit sale of that house, or there can be a borrowing against equity, which is not an asset, it's another debt! Putting hundreds of thousands of US dollars in an not liquid asset such as a house seems stupid when you can use opm at a low rate AND a tax deduction. Giving up control of your cash in hundreds of thousands of US dollars is crazy in a top heavy market or any market. Sinking real dollars into a shelter, no matter how fancy or inviting is pure idiocy. It's a physical structure for shelter and enjoyment, nothing more.

[Jim1921]

Originally Posted by Marysa Butzke

Why would any experienced house owner be silly enough to put hundreds of thousands of cash dollars into a simple residence for shelter and enjoyment when interest rates on a mortgage in many cases can be obtained <3%. A house is not an investment to start with. An investment has to offer a return. That return is only realized upon a profit sale of that house, or there can be a borrowing against equity, which is not an asset, it's another debt! Putting hundreds of thousands of US dollars in an not liquid asset such as a house seems stupid when you can use opm at a low rate AND a tax deduction. Giving up control of your cash in hundreds of thousands of US dollars is crazy in a top heavy market or any market. Sinking real dollars into a shelter, no matter how fancy or inviting is pure idiocy. It's a physical structure for shelter and enjoyment, nothing more.

There are many reasons to pay cash. When buying a house, a cash buyer has an advantage over a buyer with a financing contingency. Second, equity in a home can be protected in the event of a lawsuit based on how you title the property and/or the homestead exemption in your state. Third, just because the stock market has had an incredible run in recent years, doesn’t mean it will in the coming years. There is no guarantee that your investments will pay out a higher rate versus that of your mortgage. Fourth, most do not get the advantage of a tax deduction on the interest paid given the higher standard deduction in the last tax reform.

[Marysa Butzke]

Sinking Your cash, mullah, bucks, cheese, dough,bling, Benjamins, jack, booty, and Dinero in a physical illiquid structure of a house when rates on a mortgage are BELOW 3% for THIRTY year pay-back period is plainly insane.


3% for 30 years?? now that's cheap money. How long are most people in a physical house? it's not anywhere near 20 to 30 years anyway, it more like 7 years.


You could take a stackload of cash and buy a bunch of laddered tax-free municipal bonds and they might be able to throw off some cashflow to contribute to the debt service on the mortgage without even touching the principal.


Rates moving forward are more likely to increase from here, not go to zero, so if you maintain your big bucks in YOUR own hand, you are then in a position to take advantage of investing in rising rates, while still having a low, low rate on mortgage debt of 3%.

Sticking a boatload of cash for a physical house for shelter and enjoyment livin' is a dumb move with rates where they are now.


Having said that, borrowing mortgage money at say 14% might give you pause over the course of the debt....but 3% money is a no-brainer


Keep your cash on demand, your demand. You can always choose to pay off your house if you're stupid enough to consider that later on. BTW paying off a 3% debt WOULD be stupid.

[Jim1921]

Originally Posted by Marysa Butzke

Sinking Your cash, mullah, bucks, cheese, dough,bling, Benjamins, jack, booty, and Dinero in a physical illiquid structure of a house when rates on a mortgage are BELOW 3% for THIRTY year pay-back period is plainly insane.


3% for 30 years?? now that's cheap money. How long are most people in a physical house? it's not anywhere near 20 to 30 years anyway, it more like 7 years.


You could take a stackload of cash and buy a bunch of laddered tax-free municipal bonds and they might be able to throw off some cashflow to contribute to the debt service on the mortgage without even touching the principal.


Rates moving forward are more likely to increase from here, not go to zero, so if you maintain your big bucks in YOUR own hand, you are then in a position to take advantage of investing in rising rates, while still having a low, low rate on mortgage debt of 3%.

Sticking a boatload of cash for a physical house for shelter and enjoyment livin' is a dumb move with rates where they are now.


Having said that, borrowing mortgage money at say 14% might give you pause over the course of the debt....but 3% money is a no-brainer


Keep your cash on demand, your demand. You can always choose to pay off your house if you're stupid enough to consider that later on. BTW paying off a 3% debt WOULD be stupid.

What municipal Bonds do you see that pay over 3%?

https://www.fmsbonds.com/market-yields/


Also, if rates increase from here, the value of your bonds will drop, so you have to ride them out.

Many of us are well invested in the market, but know that past performance is no guarantee of future performance.