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Hot Potato Market

By
Real Estate Broker/Owner with Heartland Real Estate Corp
Hot Potato Market Strange heading I know, but let me explain as I always do. This is what I called what happened during the BOOM. Here it goes, take where I live for example, in 2003 you could find a home on a golf course home in a gorgeous community 3 bed 2 bath 2 car garage, pool, CBS (concrete block stucco) with over 1800 LSF (living square footage), now brace yourself, for $130,000 or high end $200,000. oK SO, an investor from another inflated market area comes to my market and finds this prize piece of property for an excellent investment, purchases home CASH! Usually throws in an extra $1000 to secure getting the home. Closes on the property and in the meantime this smart potato tells all of their investor friends of the fabulous purchase they made and those investors then come in and purchase the sameway, creating almost somewhat a frenzy, the home does not even have a real estate sign in the yard a whole day without an offer. Then, all of these investors (potatos) tell their investor friends, but.. this time they are selling the property to their friends at an inflated price (usually double of what they purchased it for) and made almost $100,000k, and now the home is $250,000 to $300,000 and still in other markets considered a very good buy. Then that investor makes minor upgrades, and puts the home on the market and at this point investors are hearing of the huge profits being made and envision themselves making this type of profit too. Some did, and now some did not, some are still trying to sell their homes. So here we go, the hot potato has been passed quickly, some making huge profits, inflating the market, creating the market so to speak and at the end of the day someone is holding the hot potato as the game goes... so let me go out on a limb here and say investors not only created the market but now are victims of their own circumstance. Investors created our inflation, and some are paying for it. As with Vegas or stocks... it is a gamble when investing in a market. Sometimes you win! Sometimes you lose! In the meantime, the average buyer is the one who is hurt the worst. Some purchased during the BOOM, their homestead property and now are house poor! And as I said in my other blog Correction Curve, the new market price is reflecting a lower than market value in some cases. But as with everything, what goes up must come down. But... we are Florida, as long as the sun is shining we are desirable. And have you looked at the projections, if not, you should, hang in their and hopefully you will make a decent return in your investment with in the next 2 years. The Baby Boomers are going to retire and who wants to retire to Wisconsin? Especially when you have Florida!