After almost ten years of prices increases, the real estate market in Florida is starting to show signs of softening. Google reports that the search term “When is the housing market going to crash?” has spiked 2,500% in just the past month. Some analysts anticipate history repeating itself, with another housing market crash akin to the one in 2008/9. So if these analysts are to be believed, what does this mean for Real Estate Investors?
Will There Be a Gigantic Crash
Well firstly, I do not believe that we will see another gigantic crash and there are a number of reasons for this. Firstly, we do not have the same financial crisis as we did in 2008/9, when loan amounts at more than 100% of the value of homes were being written and buyers were allowed to borrow way more than they were capable of repaying. In addition, Florida is still seeing a massive influx of people and businesses, which will help to maintain demand at strong levels. In short, once inflation is under control and interest rates begin to fall again, the market will quickly stabilize and perhaps continue to rise again.
Whilst prices have definitely softened a little (they are basically “normalizing”, with the crazy “list plus” offers rarely being seen), I firmly believe this is actually a window of opportunity for savvy investors to pick up deals from motivated and distressed sellers. In short, smart investors will continue to find suitable properties and make solid financial gains.
The New Flipper Market
The new “flipper market” will be based on knowledge and experience. Extra effort and due diligence will be required to find the best deals. But be warned, if your skills and experience levels are low, you should be extremely careful in the current market. It is also likely that many “fly by night” inexperienced investors will disappear, leaving the more savvy investors to capture all the best deals!
In summary, the roof on the housing market is not caving in! People still have jobs, unemployment rates are extremely low, money is still accessible and there will always be motivated and distressed sellers.
After more than 20 years of helping investors develop their Real Estate portfolios, my advice is not to base your purchase decisions on trying to time the market perfectly in terms of where its top or bottom will be, but instead to adjust your strategy slightly and bet on longer term capital appreciation! The market will always ebb and flow and the secret to success (which has been proven over many decades by sophisticated Real Estate Investors) is to “buy right”. In order to do this, you must be smarter than the average investor, increase your efforts, due diligence and especially patience. By finding the right assets, you will always be able to generate solid margins.
Good luck, and keep investing!
About Jorge Vazquez
My name is Jorge Vazquez, CEO of Graystone Investment Group. I am an experienced investor, property manager, broker with 70 agents, and private lender featured at Forbes. I have participated in more than 3,500 transactions in the past 20 years. I have made every mistake you can think of, so I am here to help with any real estate investment strategy needs!
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