A year ago at this time, I made some predictions for 2008. Here is a link to those predictions.
I think I did fairly well with my predictions. #1, 2, 3, 4, and 7 came out correct for the most part. The market generally bottomed out except prices in some areas may still be falling - inventory levels have been flat for a while now in most areas. Interest rates stayed under 6% for most of the year and appear to be headed back down. Investors bought up a bunch of good deals - I bought 1 that I am holding from last year - the rest I was able to flip. Gas prices went over $4 and then came way down - yea! I'm not sure if Activerain actually doubled in size, but I know the numbers are way up since last year.
As for #5, the hurricane predictors actually did an average job with the numbers - I have to applaud them. On #6, I blew the presidency prediction and am actually quite surprised that Obama did as well as he did. Good for him. For #8 on the property taxes, I had a mixed bag. Amendment 1 did pass way back in January and a ton of people protested their tax bills, but that didn't stop many cities and counties from raising millage rates and crying "Woe is me."
Now for my 2009 predictions ...
1. The Florida market will be a lot more of the same. I don't see things getting better anytime soon. Inventory levels of properties for sale will continue to slowly diminish in number while the number of sold properties will remain steady or even tick upward slightly. Prices will continue to drop some more especially in the soft market areas and in many condo complexes, however prices will bottom out simply because the affordability of homes for both buyers and investors is getting really great.
2. Most lenders facing the tidal wave of foreclosures will get realistic with their prices and allow many more of the short sales and REO listings to sell for prices that actually match what buyers are willing to pay. Realtors (R), mortgage brokers, investors, and related parties that focus on working the foreclosure niche in great volume will do well while those who do not will continue to flounder and even exit the business.
3. At least a few local cities, counties, and similar small governments will either file for or teeter on bankruptcy. This is just simple math. Kind of like the big 3 Detroit car-makers, the unions are sinking these governments. Since property taxes and tons of fees have already been increased in 2008 while assessed values and revenues from just about every source have literally plummeted like an anchor to the bottom of the ocean, this is almost inevitable. You cannot increase your expenses by 10% or more per year when your revenues from all sources are going way way down. Watch for it! A municipality or school board filing bankruptcy ain't going to be pretty.
4. The same bankruptcy prediction from above will also happen to many condominium and homeowner associations. However, it won't just be a few of them. It will be many of them especially newer ones that were formed after 2004. With the large amount of investors that have defaulted in these associations, this is simply inevitable. I have seen some complexes that are literally 70% investor or developer owned with over half the units vacant and prices in free fall - that is just a recipe for disaster. There is a good chance that a few of these condominium complexes that are inundated with investors will get taken over by larger investors that will in turn attempt to re-convert the complexes back into apartment rentals.
5. Investors in both the stock market and real estate market will do very well as long as they are in it for the long-term. Real estate prices finally make sense now - you can buy a property with 10% down and it will rent for a positive cash flow. Prices are artificially depressed because you can buy a home for significantly under what a builder can build one for. Once the glut of foreclosure properties get sold off in a few years, prices will spike back up to what they should be. As for the stock market I am clueless on that but I know that just like real estate, prices are artificially depressed due to market conditions and will eventually rebound.
6. The hype of mortgage modifications and workout agreement will fade. This is simply because the loan to values are upside down. Not to mention property taxes and insurance rates are a big portion of the monthly payment and those 2 items are more likely staying even as opposed to going down in cost. The people that can work them out will, but the rest of them will be in limbo and thus forced into foreclosure.
7. More federal tax breaks or big revisions to the tax code will happen in regards to real estate. The tax laws that passed in 2008 were pretty sorry, and I am sure at least some of NAR's 4-point agenda will become reality - like it or not.
8. Health care reform in some form will happen. I think President Elect Obama will do something about this before year end. It is about time too. The country has reached a breaking point on this issue.
Regardless of what happens, I wish you a fabulous New Year! I have some lofty goals for myself with a lot of getting back to the basics. Let's all hope that 2009 is much better than 2008.
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Rob Arnold - Your full service and investor friendly Realtor ® in Orlando and Central Florida.
ABR, CPL, CRB, CSP, GRI, Managing real estate broker, Notary Public
407-389-7318 / 1-877-389-7318 www.SDRhouses.com We Buy Houses Florida
We sell foreclosures, short sales, and bank owned REO properties throughout Central Florida. We sell and list Central Florida real estate and Orlando real estate. Free list of foreclosure and short sale houses available.
I also provide flat fee MLS listings, For Sale By Owner, and menu-based services in most parts of Central & South Florida, the Space Coast, and the Treasure Coast including Orlando, Winter Park, Maitland, Ocoee, Winter Garden, Apopka, Altamonte Springs, Casselberry, Longwood, Winter Springs, Oviedo, Lake Mary, Sanford, Deltona, Debary, Deland, Mount Dora, Eustis, Clermont, Kissimmee, Winter Haven, Lakeland, Tampa, Sarasota, Bradenton, Miami-Dade, Fort Lauderdale, West Palm Beach, Port Saint Lucie, Melbourne, Daytona Beach, Ocala, Gainesville, Volusia, Brevard, and more.
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