Isaac Toussie Comments On The Florida Real Estate Market
Florida real estate, says Isaac Robert Toussie, has always been the subject of interest among analysts. Months after the September 11, 2001 tragedy, stocks remained in the doldrums, with a large portion of investment funds going into real estate. This increased real estate values though operating expenses remained the same. Day-traders became condo-flippers, continuing to drive up prices. Speculators flooded the condominium market in particular, creating bubble conditions which would eventually lead to a collapse. The National Association of Realtors concluded in a study that up to 23% of all houses bought in 2004 were investor-owned. Such people are prepared to purchase property that rent out at a loss because they believe property values will keep increasing. Interestingly, as of 2006, lots from “ghost” subdivisions from 1960s-era housing deals gone bad (not to mention outright scams) were being promoted online for pennies on the dollar!
Florida swampland has become synonymous with real estate excesses in the popular lexicon. People who cannot learn history are doomed to repeat it, said George Santayana, and housing excesses is no exception, concurs Isaac Toussie. Of course, plain common horse sense should tell most people that it’s impossible to purchase anything for which one hasn’t the money, but human nature is such that the same excesses recur every other generation, like clockwork. In real estate speculation, it’s the interest-only mortgage that has been the lasso by which many have become overextended.
South Beach, Florida is gorgeous, which is why the local real estate market is always hot, hot, hot. It is still possible to make money on a South Beach condo, even in these economically troubled times, though of course the usual buyer’s caution applies doubly or triply so nowadays. But markets busts mean beautiful bargains when it comes to properties in perennially desirable places like South Beach. Buying foreclosed is probably the best deal of all, and certainly easiest for beginners and newcomers in this game. If you’re looking for luxury, look to condominiums along Fifth Street South. Even they are significantly less expensive now.
It seems Florida real estate is now ripe for great values. Since there is such an intense oversupply and such an intense lending curtailment it may be time to start cherry picking. Commercial residential and industrial markets seem like they should be poised for upturns in the next decade.
The content of this article has been posted by me, Isaac Toussie, strictly for informational and human interest purposes only, not for advisory purposes, and should not be relied upon in any way by any person or institution. The reader should not rely on the validity of any of the information contained herein. The reader is urged to consult a variety of professionals when making business or any other significant decision, including accountants, lawyers, investment advisors, insurance companies and the like. Again, this article has been posted merely for human interest and informational purposes, not for advisory purposes.
Posted: October 22nd, 2009 under Business.
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