I Can't Believe that I Posted This! Am I MAD? Am I Hysterical?

By
Real Estate Agent with Advanced Realty Services, Inc

02/07/08

Hi Jerry,

Before I get into my thoughts on Real Estate Investing for Europeans, Middle Easterners, Africans, Asians, and North and South Americans:

 

•1)      I want you to know that I cannot predict the future. I cannot tell what is around the corner, nor can I tell what affects Global or Local Events will have on the Local Economy, or on Real Estate as an Investment in the USA or Florida or Palm Beach County, etc..

•2)      I was a Real Estate Agent in Virginia between 1978 and 1980, a Real Estate Investor between 2000 and 2005, and I just became a Real Estate Agent in Florida in February 2007.

•3)      As an Investor, such as Donald Trump, Real Estate is still the Best Over-All Investment on Earth, but it is a Long Term Investment, with many twists and turns.

 

Having said all that, here are my thoughts on Real Estate Investing in the USA, particularly in Palm Beach and Martin County, Florida, for Europeans, Middle Easterners, Africans, Asians, and North and South Americans:

 

I will use the standard SUPPLY and DEMAND Model through-out my paper.

I will make mention of

two

self-coined terms

that will be indicative of how fast or greatly affected

Prices of Real Estate will rise or fall:

"Fast-Forward-Demand" will greatly increase Real Estate Prices, and

"Fast-Forward-Supply" will greatly decrease Real Estate Prices.

 

I will also use the following Analogy throughout my paper:

 

Let us imagine that the Real Estate Market in the USA (or in Florida) is a Portfolio and that Portfolio is represented as a Super Tanker that is underway on the ocean. Currently that Super Tanker is heading in the wrong direction (Losing value). As an Investor, one would like to have the Super Tanker going in the right direction (Holding value or Increasing value).

 

It takes a lot of energy to turn that Super Tanker around. The energy that will turn the Super Tanker around must overcome the energy that is keeping the Super Tanker from turning around.

 

First, the energy factors that are keeping the Super Tanker from turning towards the right direction:

 

•1)      There are folks that are destitute, in severe financial crisis, and have to sell their properties at the mercy of the lenders to do "Short Sales", and if there is no mercy, then the lenders will force a sale of each property at a Foreclosure Auction, and if no one purchases the properties at the Auctions, then the properties become Non-Performing Assets of the Lenders or the Banks.

If the property is sold as a "Short Sale", then the lender usually loses less money than at the other two sales. The lender will make the first bid at the Auction (which needs to be below what the lender thinks the property is worth on the open market), and if somebody else purchases the property, then the lender loses more money than with a Short Sale, but less money that as a sale where it is described as "Bank Owned". If the property becomes bank owned then there are certain laws that might kick in and prohibit the bank from making future money. This makes the banks want to unload Bank Owned properties very quickly and that usually indicates unloading at a great discount.

This is just a short description of what is really going on, but enough to get a feel.

The affects of this phenomenon will cause a Fast-Forward-Supply

•2)      There are New Home Builders that have to dump current inventory, and continue to build to unload builder-owned undeveloped property, to the select few people that are buying right now in this unknown market. The only people buying right now are those people that believe that they are buying the properties at such a discount that they will be protected from future depreciation. This is driving the market down quickly.

I think the local Towns and Counties should place a Moratorium on Building New Homes because to add a new home to the all ready over-Supplied market is like adding gasoline to a fire. But, alas, I am not a person in a position to implement such a thing.

The Builder's, themselves, are experiencing a melt down.

The affects of this phenomenon will cause a Fast-Forward-Supply

•3)      There are folks that have enough money to possibly weather this correction. They are currently losing a portion of their wealth, or losing a lot of their wealth, in the real estate sector. There are a lot of folks like this. In this category, you have folks that are hoping for the correction to end.

These folks are either in denial, or have wealth enough to weather the correction.

The ones that have enough wealth to weather the correction are probably also heavily invested in many other types of investments or weren't heavily invested in real estate.

Those that are only losing a small portion of their wealth are keeping their properties, they don't care. No affect on Supply and Demand.

Those that are losing a bigger portion of their wealth have their properties on the market, but at un-sellable high prices. This has an affect on Supply and Demand, but the affect on Supply and Demand is greatly detrimental to the Real Estate Market. Almost to the tune of Fast Forward Supply!!! But they may be stalling the affect, such that those in the other categories can execute their divestment with finesse.

They care, but would rather smoke their cigars and get the price that they paid.

Those that are losing a greater portion of their wealth are either stoned, or are praying, or are hoping for it all to end before they become destitute. They do not want to lower the price of their Real Estate Properties because to do so would greatly lower their wealth, but they do lower the price so gently. These people are also allowing the same as described above...

This also has an affect on Supply and Demand, and the affect on Supply and Demand is greatly detrimental to the Real Estate Market. Again, almost to the tune of Fast Forward Supply!!! But they may be stalling the affect of Fast Forward Supply, such that those in the other categories can execute their divestment with finesse.

•4)      If a recession hits, and families have to move in with each other to make ends meet, then once filled homes (renters or purchasers) will be vacating homes to super fill other homes, and thus increasing SUPPLY

 

Now for the good news...PITI (Principle, Interest, Taxes, and Insurance) and other items...

 

•1)      Florida is challenging the Insurance Companies.

Search the web for a LINK under

www.floridarealtors.org/NewsAndEvents

Enter "Insurance 2008" in the box next to "Search this Site" at the top of the page.

If Insurance costs go down, investors jump in to take advantage. The affect is increase in DEMAND.

•2)      Florida is changing the Tax Structure such that on Jan 29, 2008, there will be a reduction in Taxes.

Search the web for a LINK under

www.floridarealtors.org/NewsAndEvents

Enter "Tax 2008" in the box next to "Search this Site" at the top of the page.

When the cost of Real Estate Taxes goes down, investors jump in to take advantage. The affect is increase in DEMAND.

•3)      The USA FED (FED = Federal Reserves) is lowering the cost of money that is used to run the Economic Machine and is used to purchase real estate, and the FED is promising more cuts.

Search the web for a LINK under

www.floridarealtors.org/NewsAndEvents

Enter "Fed Rates 2008" in the box next to "Search this Site" at the top of the page.

When the cost of Money (Principle and Interest) goes down, investors jump in to take advantage. The affect is increase in DEMAND.

•4)      The Stock Market is taking a hit, and folks are moving their money to Bonds and Real Estate. The Bonds affect Mortgage Interest Rates, and Real Estate affects everybody.

Search the web for a LINK under

www.floridarealtors.org/NewsAndEvents

Enter "Stock Market 2008" in the box next to "Search this Site" at the top of the page.

When the cost of Money (Principle and Interest) goes down, investors jump in to take advantage. The affect is increase in DEMAND.

 

•5)      The Stock Market is taking a hit, and folks are moving their money to 100% Invested in Real Estate and Precious Metals.

Who knows where all of this takes us? 100% in anything that is Important to Life is good. You owe nothing to anybody (except for the County, State, and Federal Taxes).

Search the web for a LINK under

www.floridarealtors.org/NewsAndEvents

Enter "Investments 2008" in the box next to "Search this Site" at the top of the page.

When the cost of Money (Principle and Interest) goes down, investors jump in to take advantage. The affect is increase in DEMAND.

•6)      A Presidential Election is on the horizon. The Budget and Economic Future of the USA will be in the hands of a new President.

But change is slow, and with the Checks and Balances in the USA, the price per pound of who is in the President's Position, really has nothing to do with whether or not we prosper.

No affect, except for emotional affects because of change. This affect is important, but, we cannot tell where the change will go.

•7)      Local Demand is UP, Scripps, Max Planck, and supporting structures such as Grocery Stores, Dry Cleaners, Restaurants, etc

Search the web for a LINK on Google,

When the DEMAND for Real Estate goes up, the Cost per Square Foot of Real Estate goes up! The affect is increase in DEMAND.

The affects of this phenomenon will cause a Fast-Forward-Demand, once Supply is down.

•8)      Foreign assets. Don't underestimate the role of the foreign investor in today's market. Flush with cash and enjoying immense buying power due to a weak dollar-which will only get weaker if the Federal Reserve continues to lower rates-U.S. housing has become a hot commodity for European investors. "I happen to believe that the international markets will demonstrate a confidence in the U.S. that the U.S. isn't showing itself," says Mich of (xxx realty, just trying to protect my interests <grin>). "Miami, Fort Lauderdale...people want to live near some of the world's best beaches and fun spots in the world. We're going to see a lot of foreign buying and it's only going to continue." A survey of Florida Realtors conducted in 2007 found that foreign buyers accounted for 7.3% of all homes sales in the state-a conservative estimate, say many industry watchdogs. On the commercial side, Real Capital Analytics, Inc., which provides market data to the commercial real estate industry, says foreign investment in Florida commercial real estate has increased steadily, from just less than $948 million in 2004 to more than $1.43 billion in 2007.

 

So, as I mentioned in the beginning, I do not have a crystal ball; however, I do know that there are a lot of great opportunities here in Florida, Palm Beach and Martin Counties, and the Towns within, Palm Beach Gardens, Jupiter, Tequesta, etc..

 

I also believe that you will continue to see Great Opportunities over the course of the next 6 to 12 months.

 

I think that the Time is Near,

where You and Your Investor Friends,

will want to START Investing

in Palm Beach and Martin Counties, Florida.

We are like the Marbella of Spain! And at the exchange rate, GET GOING! It is time! (Be sure to hook up with smart Real Estate Agents, that know how to handle the Local Laws, the International Laws, that can speak your language, etc,,, (I can do all that, OR, I will get a translater so we can communicate effectivey)

 

Let me know when you are ready and what types of properties you will be interested in (Commercial, Land, or Residential / Condos, Single Family Detached, Townhomes, etc).

 

I am putting together a very Strong Team of Realtors, with Lots of Years of Experience, just to Service you, and your's.

 

Steven P. Wood, Realtor
Palm Coast Realty, Inc,
Palm Beach Gardens, Florida 33410
 
Direct:    1-800-298-2566
 
eMail:      Steven_P_Wood@msn.com
 
Web:      www.homepages.com/StevenWood1
             http://stevenwood.rmlsfl.mlxchange.com/
             http://www.ByJoveMyHome.com/
              
Office:    1-800-298-2566
Fax:       561-277-2415
Cell:       703-851-6535
 
I am at Your Service for ALL of Your Real Estate Needs, Specializing in Jupiter, Juno Beach, Tequesta and Palm Beach Gardens !!!

 

Comments (1)

Steven Wood
Advanced Realty Services, Inc - Jupiter, FL

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This Post is one of the most important posts on this New Aged Cork Board! Bulletin Board.

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Mar 07, 2008 04:56 PM