An Outline of the 1920’s Florida real estate boom is quite similar to the real estate boom and break down of today’s market. In the 1920’s out-of-staters were flocking to Florida for a piece of the pie. There was much land flipping and people counting profits and preparing for early retirement, the regions population doubled. According to the St. Petersburg Times, in 1925 plots changed owners six to eight times. The real estate boom collapsed in 1926 when a Category 5 hurricane hit South Florida. Miami was devastated, and the effects spread to the rest of the state. Real estate investors became cautious and property could be bought for 50 cents on the dollar.

Sound familiar? This series of events seems eerily familiar to today’s real estate market. In describing the events of the 1920’s without the mention of the date you could swear that one was speaking of the roller coaster real estate market of today. But when things go down they most certainly have no other place to go but up. As is the case with the market today.

Investors who wait for a market to bottom out often tend to miscalculate the timing. Their desire to maximize gain costs them profit in the end, as they often “miss the market”.

Here in the Tampa Bay area, a consensus of economists and analysts holds that median home prices have a way to fall before they’re back in line with buyer expectations and incomes.

Realtors are finally seeing bargains on the market begging for buyers, including bank foreclosures for sale at one-third less than one year ago.

Even builders are becoming more realistic with pricing. The builders are cutting prices for new buyers .

Are such deals stimulating sales? Not much. It’s as if buyers suspect a trap door lurks under the talk of price floors.

The prices obtained for property in 2005 absolutely needed to come down to more realistic levels, although many sellers still live in Make Believe Land, where every house is made of gold.

Despite tough talk, banks aren’t rejecting too many offers. With thousands of properties in default, Realtors expect home sellers to join the race to realistic pricing.

Florida grew 15% between 2000 and 2006-a total of nearly one million new households-in spite of the six hurricasnes that hit the state in 2004 and 2005!
Source: The University of Florida Bureau of Economic and Business Research

Here is one reason analysts are being careful not to wave the all-clear sign: A large number of homes for sale are unoccupied. In the third quarter of last year, there were 5.7 million vacant housing units for sale or rent, accounting for a record 4.6% of all US homes. The average in the 1990’s was 3.5%. To get this ratio back to normal 1.3 million vacant homes would need to be occupied.
High vacancy rates have other effects, points out Credit Suisse analyst Ivy Zelman. When an occupied home gets sold, the seller has to buy another house. When a vacant home gets sold, the seller doesn’t have to do anything. That sets off a chain reaction that ripples through the housing market.
The owners of the unrented, unsold homes bear costs. They have insurance, lawn care, taxes, and often a mortgage payment. Seeing those costs pile up can motivate an owner to sell or rent at a lower price. When a house sells at a lower price, other would-be buyers expect lower prices as well. When it rents for less, it becomes a more attractive alternative to buying. The good news (yes, there is good news) is that trouble in housing hasn’t spelled trouble for the rest of the economy. Lower interest rates give households more buying power.

The housing market has made a soft landing and will gradually pick up again over the next several months. That is the prognosis from the National Association of REALTORS economist David Lereah.
“Despite the doomsayers, household wealth will not evaporate and the economy will not go into a recession. If you’re in it for the long haul, housing is a sound investment,” Lereah said.
The national median existing-home price is expected to rise 1.9% to $226,200 in 2007, after rising 1.1% in 2006. The median new-home price is expected to increase 1.8% to $249,800 in 2007, and in 2008 existing-home prices are forecast to rise 3.4%.

Spending winters in Florida appears to be a preliminary step to a permanent move for many snowbirds. A recent study by the University of Florida found nearly one in four (23%) who moved permanently to Florida between 2000 and 2003 reported they had lived part of the year in the Sunshine State before moving here year round.

The University of Florida released a study March 9, 2007 encouraging customers interested in purchasing property in Florida to act now. The study indicates that prices are maintaining the same level as inflation, which indicates a stabilizing market in which prices are unlikely to fall any lower. Optimism for Florida investment is particularily strong in the foreing investment market, which is aggressively trying to invest in Florida’s rental market. For more detail of this study, please visit www.cba.ufl.edu/fire/realestate/cres/findings.asp.

For those who enjoy living along the water, with backyard docks for your boat, Hernando Beach, Aripeka, Bayport, Pine Island, and parts of Weeki Wachee offer Gulfside homefronts. Hernando Beach is the largest of the coastal comminities and boasts upscale homes as well as marinas, restaurants, retail stores and other businesses.

It is true that our local market has shown a decline in average sales, however we are still far above the national average. I believe this to be because even in a depressed market, buyers still realize that our market is still a value for them.

Our area is well placed for the Tampa/St.Pete commuters. We offer a delightful difference.