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Florida home sales, prices rise again, and will keep rising

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Florida home sales rose seven percent in May, and median home prices were up throughout the state, according to this press release issued today by the Florida Association of Realtors® (FAR). According to FAR, 24,069 homes sold statewide compared to last year’s level of 22,496 homes sold, with the Tampa-Clearwater-St. Petersburg metro area leading the pack.

Home sales for that region totaled 5,482, increasing from 4,330 homes last year; a 43 percent increase. The Tampa Bay median home price also rose to $196,100. This time last year the median home price was $156,800.

A strong labor market, continued low mortgage rates and a growing economy are credited with the continually growing sales numbers. Are low mortgage rates contributing? Read this snippet from the release:

Keeping in mind the history of interest rates and mortgage rates, Scott took a look at their impact on median sales prices in the state. “The acceleration in median sales prices (both for the May comparison and for the 2005 year) of approximately 27 percent is not sustainable,” he says. “Such price increases are being driven by a once-in-a-lifetime low interest rate environment and opportunity. Thus, this is more of an ‘interest rate bubble’ than a ‘housing bubble.’ Most investors and consumers do not have a long-term perspective on the behavior of interest rates.

“But for comparison purposes, back in October 1981, conventional mortgage rates hit 18.45 percent compared to the rates of today, which are in the vicinity of 5.63 percent. In addition, at that same time in 1981, inflation at the consumer level was in the vicinity of 10.3 percent compared to the most- recent observation of 2.8 percent. The key point is that observed inflation and expected inflation rates drive long-term interest rates. It is, therefore, interest rate changes in the final analysis that will help determine the robustness of the Florida and national housing markets,” he says.

According to Freddie Mac, the average rate for a 30-year fixed-rate mortgage was 5.72 percent last month, up from 6.27 percent in May 2004. FAR’s sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.

Of course, resort-like living all year ’round doesn’t hurt the market, either, and as long as most adjustable-rate mortgages continue to allow for a maximum of a 1 percent increase per year for variable rates in most cases, the bubble myth will continue to be a myth, but prices will eventually slow and flatten for a while, but it’s unlikely to happen any time soon. Contact a Florida Realtor now to buy your dream home or second home before prices go up again.

-John Mudd
“Mr. Real Estate”

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About Mr. Real Estate

  • Daniella

    Fair Comment I suppose.I am always of the opinion however that what goes up must come down. I curently live in England UK and prices here are mad too and in certain parts of Europe. Still I love Florida so I will buy a place there anyway as it will be home. I would not be buying property there to flip though. Might also buy a place in the mountains maybe in Georgia, I think thats still reasonable. I came acros your website so thought i would post comments. Appreciate your view point. D

  • The Florida Chamber of Commerce projected 300,000 baby boomers moving here over the next 25 years. Many of them are from the Northeastern states where property is much higher in value, even when the market slows. In July sales slowed. In August they picked back up again, breaking records.

    There’s an article in the St. Petersburg Times entitled Elevated home prices show no sign of decline (here’s a link to it: http://www.sptimes.com/2005/09/27/Business/Elevated_home_prices_.shtml).

    Hurricanes tend to increase prices, rather than decrease demand. Developers see hurricanes as a buying opportunity for future profits. When the baby boomers retire, I think the market will slow, but until then, you might want to consider Dallas, Texas or somewhere that is a buyer’s market.

    The number of buyers far exceeds the number of available properties for sale. As long as that continues and new construction starts remain high, the Florida real estate boom will continue.

    It’s like I always tell my friends in the media, if gas becomes $100 a gallon, if rates become 12% or if World War III erupts, then I’ll worry about the market, and my career, to boot. If it snowed in Florida we would all be doomed. I’m going to enjoy it while I can.

  • Daniella

    I used to live in Florida, Flagler Beach nr Palm Coast (North Daytona Beach area) Palm Coast lots used to be $5K to $50k are now $100k to $500K
    We have been looking to get a second home there but I cannot believe the prices.All real estate agents (as is in their interest) will tell you no way housing can collaspse but truth is no one really knows for sure. I admit that I partly buy the theory of the baby boomers but surely if there is a national correction it would in fact change the price of housing that baby boomers currently own and therefore not necessarily allowing them to buy second homes. Also I note the points about the hurricanes and supply and demand. On the flip side of that remark does it not stand to reason that if there is enough hurricanes no one will want to live in Florida (especially as insurance will be very high) and interest rates may keep going up for some time yet. If that is the case then you can forget your 300, 000 baby boomers moving. What happens to the prices of Florida housing then. I am just an interested party to the Florida Housing market and global economy and I have no qualifications to state that it could be a bubble. Also I am a potential buyer so want to be cautious with my hard earned money. However I have studies economics and one thing does remain clear to me. History repeats itself and so do depressions and bubbles

  • John

    Hi All,
    With the rising costs of land and housing I have a problem with an unscrupulous company and I want everyone to know about it.

    I am wondering if anyone has run into the same problem or has any ideas. My parents bought land back in the 70s and of course the development company who sold it to them went bankrupt. So now my 70 year old mother was solicited to sell her land in Palm Bay by I think, the company is called My Three Sons owned by the Klarenbeek’s. They told her that it was only worth $2,500 and offered her $5,000. I subsequently found out it is worth up to $29,000. I asked them to send comps along with the contract, they did not and it was not in writing. We did not close on the deal. Then my mother received another postcard with the same soliciation from them recently. So now they are suing my mother. I feel like they are probably soliciting people nation wide who are unaware that the land is now worth much more. These folks would now be around my mother’s age – since much of the initial land was sold in the 70s.

    Has anyone else had this happen to them or their relatives or parents?? Any ideas?? I have tried looking them up in various regulatory agencies to see how they are licensed by the State of Florida and have not been able to find them. These people need to be stopped. They are taking advantage of the elderly. Takes for your help in advance.

  • That increase happened here in six months.

  • Real estate prices has been a very hot topic in my city, in the last few years. For the longest while, Winnipeg was known as one of the three cheapest cities in Canada to buy a home (the others being Saskatoon and Regina.)

    Suddenly, with low interest rates, people have been shopping like crazy. Houses sell easily in one day, and selers are getting thousands of dollars more than they expected. Many people are so sickof being outbid that they are just building new.

    This is probably the way it has been for much of Canada and the US, but it is a new phenomenon in Winnipeg.

    Between 1999 and 2005, the average house price in my neighborhood increased from $178,000 to $274,537, an increase of almost 55%.

  • Yes, El Bicho’s right. That’s highly recommended.

  • Mark, why don’t you just include the Amazon ASIN in every post you write? I’ve seen other authors do it on the site.

  • Well, Phil, I was just seeking fairness for all, not trying to stroke my projects. But, if it’s cool, then we’ll discuss offpost.

    As for John, I was in Tampa last month, so I know you have a great deal going. You got a lot of knowledge, so just present it in a way that isn’t unfair to the rest of us. Okay? That’s all. No beef with you, man… live it up, that’s why we’re all here.

    And Dave, I was going to ask you about the fonts the other day. Too funny. I bookmarked it.

  • Honestly, at this point our policy on self-promotion is more or less like the long-ago USSC policy of obscenity. We know ads when we see them, and we sometimes stop them. We sometimes let one get by, but we’ll try to put a stop to someone only promoting themselves.

    Or their religion, maybe, though that’s still an open issue, I think. Again, it depends heavily on the quality of the posts and the amount of useful information provided. John could be a model for what we’re okay with, but everybody likes to push the line.

    A single post that is an actual book review, and especially one that gets inside the author’s head, well, that’s right up the site’s alley.

    In fact, Mark, I’m going to drop you an email about a possibility that just occurred to me.

  • I’ll be glad to review it, just as soon as I finish with my new overview article on hot new fonts from The Scriptorium your premiere source for all the latest font designs.

    But seriously, I used to be a review columnist for Thrust and I’d love to review your novel, Mark.


  • Full disclosure, Mark. Definitely you should write up your own novel! Do it Monday! Say whatever you like about it; just be sure to mention that you’re the author.

    For that matter, make a review copy available, and I’m sure someone else here will be glad to talk about it. Of course, they could hate it, but that’s the chance we all take, eh?

  • Phil, I guess my point is: if John’s doing it, what’s to stop everyone else other than the honor system?

    Can I write a review of my novel on Monday, just as long as I include some meaningful information about the current trends of science fiction?

  • That would be excellent. The issue of real estate and the market in general is a very, very important one. I’d like to see more general analysis in the area. One of the major shortcomings of John’s posts is that they are so specific to Florida. More generally useful info that people all over the country can take advantage of would be enormously valuable.

    For example, there’s a big push for these new loans where you put no money down, pay only interest up front, and then end up with an ARM. It gets you a super low payment, but my impression is that you end up ‘upside-down’ unless the value of your property increases rapidly, at least if you try to sell before you’ve paid all that upfront interest. That’s something we could use some expert discussion of. I suspect a lot of first time home buyers are getting badly screwed.


  • Dave’s right, it’s a gray area. It grows a little darker with each passing month, too. Not because John’s posts have changed — they haven’t — but because the site contineus to mature.

    I suspect that when the time comes, John’s posts will broaden in appeal as well, to match the site.

  • >>This isn’t a post, it’s a blatant sales pitch and nothing more, and the last line confirms it. The editors should remove this post.<< I've said this before, but although it's blatant advertising, it does also include information worth discussing or at least reading. It's a gray area. As for the real estate prices in Florida, it's great news if you already own a home there. Not so good if you're a developer hoping to attract new buyers. Dave

  • I’ve been following this thread all day, and read many of John’s previous posts.

    My 2 cents: Everyone understands John’s trying to make a living via his real estate sales, as we all are through our different endeavors. We all are doing this for free. But that’s not the point, IMHO. It’s obvious John knows how to promote his market, no one is debating that. I just think it shouldn’t be so blatant in the setting of BC, that’s all.

    To show I’m not a hypocrite, I’ve got a published novel and you know how many times I’ve plugged it on BC? Never once, which maybe is silly of me from a PR standpoint, but I’m here to show I have a voice and contribute, not be a traffic whore.

    If people like my writing, they click my link and learn about my book, but not beforehand. Is it so hard for John to do the same for his biz without the shameless self-promotion links?

  • John, arrangements are subject to circumstances, and the site is radically different than it was three years ago. What is acceptable today may not continue to be acceptable in the future.

    However, while John is clearly promoting his services, he does also make a point of providing real information in each post, as we’ve insisted from the beginning, and perhaps most importantly, he promotes Blogcritics.org as well. While I recognize that some posts skirt uncomfortably close to the line of acceptability, we’ve seen no reason to discourage these posts, and they sometimes do draw large amounts of interest, as the fact that this is comment 37 demonstrates. We do have contributors that come down on the other side of the line for several reasons, and we’re working out how best to handle that situation still.

    As long as I can continue to read and learn from John’s posts despite having zero interest in Florida real estate, he’s doing okay.

    At least until the arrangement needs to change, which it may in the future. But not now, I think.

  • Bennett:

    Since I have been here (three years), there has always been someone who has objected to my posts about real estate, no matter what the format. There was a time when I did post an outright ad, and that is when guidelines were created by the Publisher. Guidelines were established. I follow them in every post. The Publisher created the guidelines that I follow.

    My posting strategy has everything to do with PageRank and nothing to do with getting leads. Everyone knows how I get my leads, or should, because it’s all over various blogs, newspapers, magazines, etc. that I’ve shared it with in various interviews. My website’s PR, though, being a 7, doesn’t hurt Blogcritics when I link to it here, and my blog (I think a 5 or 6) doesn’t hurt it, either. So, really, my posts help your posts, and probably some other complainers, too.

    Again, if you are a real estate editorial expert, write some posts, create a section – all of which I have suggested, and nothing has occurred, except more criticism. If you want to criticize, you can, but I do not care what you have to say. You are not my core audience. If you want to be an expert, show me your expertise. If you won’t show me, you’re wasting your breath and my time.

    You’re also making my PR go up quite a bit more quickly, because this page is pinged every time it changes.

    There is no contract that I have signed stating what I must write here during any time period, so I will write what I want for the next six months, or 12, or 24, or more. If you want something other than that, you will have to negotiate it with me. Good luck.

    Have a good weekend.

  • Bennett

    Testy? A trifle. Yeah, ads were my game for many years, so I know ’em when I see ’em.

    However, this ““Real estate is prominent, because Donald Trump says it’s hot. It’s new, because everyone wasn’t doing it five years ago.” is bullshit.

    There’s nothing new under the sun, son, except for science. Don’t get your knickers in a twist over this, but what you did two years ago has little to do with what you’ve been doing for the last six months, which is troll for sales leads via BC.

    Just an observation.

  • So, is your expertise in ads, or is it in real estate content? What makes you an expert in this area? Oh, so you’re not an expert. That makes sense. Experts usually write, rather than criticize in comments.

    Triniman: No bubble has been burst in the past. I have been over this 100 times. Prices go up, and they go down. Markets appreciate, they have corrections. it’s called capitalism. When supply is scarce and demand is high, prices go up – everyone wants the American Dream of owning their own home and money is all over the place with easy-to-get low-rate mortgages, but builders and developers can’t move fast enough to fill demand. If you have a Great Depression or another major negative economic cycle (i.e., oil dries up in Midland, TX, major job loss, etc.), you have a bubble-bursting effect. Real estate appreciates. It’s a fact of life, just like automobiles depreciate (they’re everywhere – they make new ones every year whether people want them or not. The “bubble theory” as it has been called, is a theory. You cannot create a bubble without air, and real estate is bought with cash, or a mortgage, which is cash, not air, but the mortgage company puts a lien on your property based on its appraised value, so for them it’s an investment, and for the buyer it’s a dream come true, and sometimes an investment, too. I work with buyers who pay up to $800K, sometimes more, in cash, for property. The media writes about whatever is prominent, new or unusual. Real estate is prominent, because Donald Trump says it’s hot. It’s new, because everyone wasn’t doing it five years ago, and it’s unusual for more renters to be able to buy than they could 5 years ago, because they didn’t know about 100% financing with the seller paying 5% of your closing costs, etc. Am I going to write posts on all of that? Heavens, no. I get paid to sell real estate, not write posts!

    I’ve done plenty of promotion for Blogcritics for free, and that I don’t mind, but I won’t have what I write dictated to me by someone else unless I’m getting money for it. I follow the guidelines that were given to me long ago and I have been here since 2002. You might remember, I was the one who was the first to say the Nirvana “You Know You’re Right” “leak” was a viral marketing tactic to promote the upcoming Nirvana boxed set and Kurt Cobain journal. I was also the one who is not a journalist and got an exclusive Mary Carey interview when she ran for governor of California, and I did the “Blogging for A Cure” for diabetes (which The Diabetes Blog has been trying to get me to do for them, but I refused unless they included Blogcritics). It’s fun to do those things when time permits. Real estate is my profession, and it takes up most of my time these days.

    You can criticize my real estate posts if you like, but please bear in mind, I do not care what you have to say unless you are going to contribute, so write your own real estate posts, or stop wasting your breath and my time.


  • I agree with Bennett’s last comments. The posts would be more interesting if they didn’t come across like infomercials.

    Here’s what I would like to know. Real estate “bubbles” have been burst in the past. What causes this? How dramatically do prices fall? Now, this would be interesting to read.

  • Bennett

    Dear Mr. Real Estate,

    When looking back at your history of posts, it seems to me, just my opinion mind you, that you consider BC just another arm of your marketing campaign.

    I don’t disrespect your moxie, but I question your commitment to providing information regardless of personal profit.

    And that’s the rub, for me. If you took time to write about real estate investing in general, the ins and outs, the traps and tricks, and provided more in your posts than simply your local Lion’s Club assesment of the “market”, in your area, I would have no problem.

    Just my 2 cents however, and I wish you well.

  • I would have to put a Tampa spin on it. It doesn’t have to be commercial. Although, this post isn’t commercial, until the last sentence. I don’t live in NYC, so I can’t use NYC housing prices as examples.

  • Go ahead, dude – don’t put a commercial or Tampa spin on it

  • Or, we could call it “The Real Estate Bubble: Fact or Fiction?” and everyone could debate it there.

    All the networks are jumping on the real estate bandwagon, and it’s one of the top items searched for online. I just figured maybe Blogcritics should make some money off of it too, since everyone else is. Just a thought.

  • Yeah – we could set up the post against the best guitarists one

  • Bennett

    C’mon Temple, we could do up a cool map graphic, with Tampa Bay at the center of the world’s real estate market…


    Hey Nancy, you weren’t too far off the mark.

  • respectfully.


  • zzzzzzzzzzzzzzzzz ….

  • This post got a ton of responses. Why don’t we do a Real Estate Spotlight right here on Blogcritics? Maybe Blogcritics from around the world would be willing to write about what’s going on in their real estate markets. Just a thought.

  • Actually, at least in 2004, the Tampa area wasn’t really overpriced. I’ll be curious to see how it stacks up for 2005.

  • Er, I was thinking more of the advisability of moving out of places with higher-than-average home prices, like Florida, but I suppose people can take away any meaning they want to from my statements. 🙂

  • Phillip’s post is right on the money. I have clients who used to live in California, and they decided to cash-out and buy a waterfront home here, which they did not have nor could they afford in California. A lot of buyers who buy in my area use equity in their homes, located in the Northeastern part of the country, or out West, to buy a second Florida home.

  • I have family moving away from San Diego right now, because even though they very recently refinanced and pulled out equity, prices are rising so rapidly they can afford to refinance again and pull out enough equity to buy a house cash in Dallas.

    Prices keep going up in SoCal for a couple of reasons, but it all comes down to supply and demand. Temperate coastal areas obviously have high demand, and the supply isn’t growing to meet it due to both land constraints (there’s only so much room between the ocean, the mountains, Mexico, and Camp Pendleton) and governmental restraints. Some people who lost their houses in the horrible fires a couple of years ago are still waiting for permits and such to rebuild.

    A “bubble” is probably the wrong word to describe the situation, because it implies a certain and dramatic pop at some point in the future. That *could* happen, but given the general principles of supply and demand, it looks unlikely. Adjustments? “Market corrections?” Sure, if enough people decide to cash out and move to another area, the value of land could drop. But not like a bubble popping, I don’t think.

  • So, only real-estate professionals, who have the most interest in keeping prices high, should opine about the ‘bubble’? Smart, real smart – you left out that it would be ‘un-American’


  • Robin:

    There’s no bubble. Real estate isn’t a liquid asset like stock, so when, and if, prices sink, they do so over time, not overnight. Real estate values also increase over time, with some periods of home prices leveling off, which is sometimes followed by prices becoming slowly lowered.

    I do think that in some markets prices will level off somewhat for a period of time. They did this in 2003, then continued rising.

    What’s causing real estate values to increase so rapidly here in Florida is that (1) Many baby boomers are buying second homes in preparation for retirement, and (2) There are investor-speculators who buy then re-sell a short time after for a nicely sized profit. In the business we call it flipping. Why is there so much flipping going on?

    Well, in the 1990s President Clinton signed a bill that became law that now allows single homesellers to pay $0 in capital gains taxes if their gain is up to $250,000 when selling their home (condo, etc.). Married couples do not have to pay the tax on gains of up to $500,000. On stock, you pay 15% no matter what your gain is. The lack of the tax allows for higher gains, tax-free, so there’s a lot of flipping going on. See your tax attorney or CPA for further details on tax laws and their effects, as I am not an attorney or CPA.

    I suspect that when the baby boomers stop migrating to Florida in huge numbers, around 2025 or so (because many will have retired here by then), and if that particular tax law is changed, we will witness a different real estate market. However, I don’t believe a $200,000 home will become a $75,000 home overnight, similar to a bubble-burst, unless we have another Great Depression, or a very deep recession. I suspect prices will appreciate, but with stagnant periods of appreciation in between.

    Bubble-theory inflaters should stop. Most of them come from stock market-related industries, or are renters, and are not licensed real estate professionals, according to most studies. Unless they have proof of a bubble, they really should stop frightening buyers and sellers with information that has no solid foundation, unlike real estate.

  • Robin

    We bought a new home in Palm Bay in 2002. It is 2000 sqft and on 1/2 an acre. We paid $120,000. We just decided to buy an investment home to rent out. We went to a real estate agent and asked to see houses for $120K. There was one. It had fire damage. We tried $150K and found 2 condos from the 1970s, 1000 sqft. At $175K there were 5 houses all under 1400 sqft, and 20 years old. We are now looking at paying $200K to build a 1500sqft house on a small lot. Our home was appraised for $325K!! Now you guys have me scared that if I build this house for $200K it won’t be worth that much if the “bubble” breaks a few years from now. Advice??

  • Mike

    All the back and forth debate on this issue is meaningless. Facts are facts. If an average of 800 people a day are moving to Florida, then Florida’s home prices will keep going up. The rate of increase certainly won’t be what it is this year, but historically, real estate has out-performed Wall Street. Anyone who thinks they can “wait it out” and home prices will fall are probably still holding on to their $60 a share Cisco stock dreaming of the day it’ll come back.

  • Roy:

    All that may be true, but in spite of it, 300,000 people are moving to Florida each year, and are projected to do so for the next 25 years, and there aren’t enough places to put them all now. the majority of those people are moving to towns and metro areas near beaches. This is why inventory continues to be scarce, new construction sells out quickly and prices continue to go up. The biggest concern our state has is infrastructure, which is why a bill was passed this past session by the legislature to address that particular issue. However, infrastructure doesn’t determine property values. Supply (low) and demand (high) do. Florida is a service industry state, but if it were really low waged it would be very unionized and it is a right to work state. There are plenty of high paying jobs here for qualified individuals, it’s just that most qualified individuals come from out of state due to experience and education (our education system isn’t stellar, that’s for certain). By the way, the recent bill addressing infrastructure makes developers have to make sure it is in place prior to developing. This way growth is better managed than previously.

    All of this stuff is well documented in state studies and Florida Chamber of Commerce studies that have been around for years. Florida’s biggest concern is infrastructure. Prices of real estate will level off when buying slows. It hasn’t happened yet.

  • RoyTyrell

    I must agree completely with RJ. I have lived in brevard county all my life and for the most part, anything not directly on the beach (or merritt island) is hicksville. I’m not sure what people are thinking shelling out this type of money for these crappy little houses in mostly rural communities. It makes no sense. As was pointed out, unless you are self-employed in a profession where geography doesn’t matter (as i am), there really are NO high-paying jobs in this area. florida in general is a low-wage state. schools are generally sub-par. infrastructure is poor, and culture is redneck bars and beach shacks.

    A home in palm bay, or rockledge, or cocoa (off the river) is NOT resort living. for the most part it’s indistiguishable from any backwater you might find in any other rural part of america.

    the place may have it’s charms, but no way does it justify current prices.

  • You say there’s plenty of land. Where can I buy it in Palm Bay? Or, has a developer already bought it and is waiting on approvals and infrastructure, in accordance with new growth management guidelines?

    Here in Tampa Bay land is scarce, as is property for sale, which is why prices keep going up.

    Anyone can call an area a bubble without studying it. Scarce supply and increased demand make prices higher. There’s not much else that can. A pre-construction condo went on sale last weekend with prices in the million dollar range. All 103 units (the developer held 2 of them) sold out during a lotto. There were a large number of folks who did not get to buy a condo that wanted to. Most of these folks were baby boomers seeking a second home in Florida to retire in later.

    Prove to me nothing has changed. The Florida Chamber of Commerce released a report showing 300,000 people will be coming to Florida every year for the next 25 years. That’s quite a change, don’t you think? Demand had to increase for prices to increase, and scarcity of available housing had to increase, as well. Available housing is what determines whether or not prices go up. If there’s one condo in Tower XYZ and 10 people want to buy in that condo, prices go up. Same thing for Housing Subdivision ABC. Property for sale is pretty scarce in most Florida markets.

    The price of oil, which drives up builders’ and developers’ costs, also makes new home prices go up, which is happening now, as well.

    We can pretend nothing’s changed, but the fact of the matter is, a lot has changed, and each year it continues to change; about 300,000 people coming to the state every year is a big change.

    Palm Bay is smart. It’s laying the infrastructure now expecting change. Here in Tampa Bay we’re laying the infrastructure as it changes, but it’s changing so quickly that we have no other choice.

    The large number of people coming to Florida is the reason the Legislature changed the growth management laws last legislative session. They now make it so there must be infrastructure in place prior to new real estate development. This includes roads and schools.

    300,000 people moving here each year is a rather large change, and it is what is driving Florida home prices up, and at some point they will level off, but then they will go up again.


  • RJ

    There are literally dozens of square miles of area within the jurisdiction of Palm Bay that already has paved roads and sewer and city water and electric set up. It is a massive chunk of land begging to be developed. But, as soon as it is, you have just massively increased supply, without denting demand.

    Demand is artificially high right now due to the damage from last year’s hurricanes. Assuming this area is not hammered by tropical storms for a couple years, demand will decrease, while foolish profit-minded real estate developers vastly increase supply.

    Result: The housing market will collapse.

    You heard it here first…

  • RJ

    Dude. No.

    In Palm Bay, Florida, one used to be able to purchase a shittly little stucco home with two bedrooms and one bathroom on a decent-sized plot of land in a relatively-rural area for under 50 grand, just 7 years ago. Now, these same plots are sold for about 125 grand.

    Nothing substantive has changed. The employment situation has not changed. The land itself is the same. The neighbors are largely the same. The public schools are the same.

    NOTHING HAS CHANGED, except that housing prices have more than doubled.

    It’s a bubble. There is plenty of land around here, and relatively few high-paying jobs. The bubble will burst in a couple years, probably after some level of inflation sets in and mortgage rates rise.

    And then those houses/lots will collapse in price. Perhaps not down to their 1999 levels, but certainly below their present levels.

    It’s suppl and demand at work here. If housing costs increase, more homes will be built. This increases supply, while demand has no reason to increase further (due to a lack of high-tech jobs in the area). So, in a capitalist system, prices will eventually decrease, leaving real estate speculators holding the bag.

    Mark my words.

  • I’ve recently been talking with a couple who want to sell their condo.

    The last one that sold in their community went for around $107K. This was last year.

    One (and it was the only one for sale in the community) recently went on the market for $145K. I originally thought it was overpriced. It sold in a week. The couple can now sell there’s for more when they list because the value has obviously gone up in this condo community, and when they list, there’s will be the only one on the market, most likely.

    C’est la Florida housing.

    As Jackie Gleason once said on the Honeymooners, “To the moon, baby, to the moon.” I think he was talking about Florida housing prices.

  • I live in Florida and own a house. In my area (Pensacola), due mostly to Hurricane Ivan, home values have jumped as much as 60%. Very crazy stuff.

  • Eric Olsen

    it’s informational, that’s the criterion

  • Nancy

    Well, if it’s within the guidelines & the eds are not jumping on it, then I’m the one out of line. If I’m wrong, I admit it.

  • Nancy, based on the guidelines I have been given previously by the publisher (I have it on file, still), this kind of post is okay, as it is not an ad, it’s an opinion piece based on the news that Florida home prices are higher.

    Blogcritics contributors promote themselves in the pieces they write all the time. I am not the only one.

    The right to free speech and the fact that I freely contribute to Blogcritics without pay enable me to write about whatever I want, whether it be a free book or CD I receive to review, a political person or issue, or about an experience I had with something or someone, be it a product or movie star, or my area of expertise, which happens to be real estate.

    If you don’t like my posts, don’t read them. Thank you. Take care and have a wonderful day.

  • Nancy

    This isn’t a post, it’s a blatant sales pitch and nothing more, and the last line confirms it. The editors should remove this post.

  • If you have proof that it’s a bubble, please share it. I have yet to see any proof. I read plenty of theories, but they’re mostly from money market analysts who generally don’t know anything about real estate. People have been saying there’s a national real estate bubble for years, now they say bubble’s exist only in certain communities.

    I think people just want there to be a real estate bubble, because if there were, it would be much easier to afford a home, especially in this market.

  • Oh no! Then what will all the folks at Pebble Beach do? Or how bout Clint Eastwood and his planned community: Pasadera?

  • RJ

    It’s a bubble. The bubble will burst at some point. That’s a given.

  • Yes there is: A home that is not in Florida.