By Rick Gibson
Feeling confused about real estate today? You’re not alone … there is such negativity and so many conflicting perspectives that it’s hard to see the good news.
So, what is the “good” news? My favorite example of news that got “lost” somehow is from 2005. CNN/Money published a real estate report on U.S. zip codes. Would you believe a large area of Fort Lauderdale and Wilton Manors ranked number one in the entire country for the fastest appreciation? The importance of that news is because history repeats itself. The same areas will appreciate again for the same reasons they did in 2005.
In 2010, CNBC.com announced the City of Fort Lauderdale ranked number one in the United States for “buyer interest and demand.” I read all the local newspapers to see if I could find this news and was intrigued to find it was nowhere to be seen. Positive news seems to get lost and gloom and doom easy to find. This contributes to confusion in one of the most exciting real estate markets I have ever seen. Did the market drop since that report in 2005? Yes, a lot. Will it go back up? Of course it will. But, first it has to stabilize. In my opinion, it is stabilizing right now.
This month, the Sun-Sentinel reported ten zip codes in Broward County experienced price increases when compared to last year. In February, traffic to real estate websites jumped 27% and sales of single family homes and condos in Florida were up 13% from 2010. Fort Lauderdale Beach is about to undergo a multi-million dollar facelift to transform the area west of AIA to upscale hotels, restaurants and shops. Do these numbers or information mean sellers should increase their prices? Not unless they happen to be selling in one of those 10 zip codes or in very select parts of Broward County.
What does it mean? It means we should avoid negativity, realize we are in a good place, make plans, and move forward with solid strategies. The recovery may be slow but the good news is that we are recovering now.
Meanwhile, many people are in distressed personal situations, facing foreclosure, need to short sell their properties or considering bankruptcy. This is serious, and why the price recovery will be slow. Although not pleasant for anyone who needs or want to sell, there are many options, programs, and strategic ways to solve these challenges. I truly believe a solid plan and expert advice can turn around many of the real estate problems people are experiencing so they can still benefit from the low prices.
Stigma and misinformation about short selling properties and bankruptcy seems common and is harmful. Please consult a Realtor® with the training and experience needed to provide you accurate information, your options and opportunities to help. Real estate is more highly specialized than ever, so please make sure you are in good hands and take action to find solutions to your problems.
We hear “now is a great time to buy” over and over. It’s because it is true. Consider the people who do not own any real estate and that in many cases it costs less to buy a home than rent. They may not even be aware of their options. Loan programs such as HomePath and FHA financing are so affordable that assuming someone cannot own a home without trying may be a
mistake.
The most fortunate right now are investors and, at some level, all of us in real estate could think of ourselves as investors. The opportunities to buy, improve and rent properties out for cash flow, tax benefits and future resale are incredible.
The impact of this gentrification supports the entire market’s recovery. Past standards for return on investment (ROI) are being exceeded dramatically due to low prices and increasing rents. If you are in a position to invest in real estate right now you are fortunate and might consider it carefully. Don’t wait for it to get better.
On the selling side of things, there are many of us who own properties worth much less than what we owe on them. It can also be a “great time to sell” if you reduce your debt and buy something else you like more and which is more affordable. For a limited time, there are tax benefits, federal assistance programs (HAFA, etc.) and cash at closing for short sellers. I recommend anyone considering short selling meet with a Certified Distressed Property Expert (CDPE) before listing their property. Sellers who are not upside down and do not have mortgages can consider renting their current property out, selling it or leveraging it to use this buying window of opportunity to upgrade, down-size or purchase investment property.
Some of you can afford to make payments but will be eighty-years-old by the time your properties break even, so may decide not to pay your mortgage and short sell or allow foreclosure. This is called “strategic default.” Some consider it unethical, but my position is to leave it to the business of the property owner and lender and not for me to decide.
In any case, there are many opportunities and
many solutions to problems. I only ask that people consider there is hope and are solutions out there. There is a lot of good news and there are a lot of people who care.
