Decline in Real Estate

[oink]

The market is correcting itself as it did in the 80s and 90s as many areas and communities across the U.S. begin to feel the slow down of previously low interest, speculator, and investor-fed purchases and repetitive flips, often the result of exotic, creative loans offered to anyone who'd bite. There are still pocket “hot” areas to purchase and that is currently where the investors have gone. The real estate market is cyclical; you just have to know how to read or interpret it. Everyone hopes that when they need to sell, the market is high and when purchasing, the market is low. You (hopefully) research and then pay your money and take your chances. The press likes to create a “stir” to sell papers and in this situation I believe the press is partially responsible for the recent sharp marked adjustment, with their doom-sayer predictions which put a scare in the market. Of course, there were also other factors involved. It's possible the press did us a favor by causing the adjustment earlier than it would have otherwise occurred, resulting in a less drastic adjustment, rather than having a later more painful adjustment. We have whiners that bought properties at 150K and were later holding out for 400K for that same property at the peak of the market only to be caught in the adjustment. They are now whining because their properties are moving too slowly at 350K when they are still looking at a 200K profit in less than five years. In our area of Florida “properties sold” have decreased by 48% but average sold prices have appreciated 6% over last year. Yes, I know that having less low end closings and more high end closings skews the “average price sold” statistic. While sales did dry up for several months, activity has now picked up again and is now approaching what it was before the low interest and speculator fueled boom. I do consider that healthy in the long run. Markets usually do vary considerably in different areas. Some areas that were effected by the low interest and Spec. fueled boom could not otherwise have justified their booming markets. They will not experience rapid recoveries from the current drop, nor should they. I don't know the Punta Gorda market or what it should be in a “normal” market, but I do know the Treasure Coast.

S. FL Islander to be