Morris Massre's Blog

Thoughts on South Florida Realty and the Planet in General

Housing’s Perfect Storm Erupts in Florida

South Florida's Perfect Real Estate Storm

South Florida’s Perfect Real Estate Storm

Housing Perfect Storm is Upon us

Housing Perfect Storm is Upon us

Welcome to Florida; The Hurricane State

Welcome to Florida; The Hurricane State

Some thought Hurricane Wilma of 2006 fame was the perfect storm that started the housing meltdown in South Florida.  Well, if you coupled that with mortgage fraud, rising home prices that were out of control, and unscrupulous realtors, mortgage brokers, and appraisers, then maybe it was.  I believe that it was simply the beginning of the end.

Today we have a perfect storm of other sorts.  I like to think of it as the perfect storm for our housing recovery.  Whether or not you like it makes no difference.  Housing is the single factor in the US economy that dictates whether or not we fail or succeed economically as a country.  Not Wall Street, not the auto industry, and not banking.  This is why everyone should be paying close attention to the market, especially here in your own backyard.  Housing’s success or failure has a domino affect on America’s economy.  Choosing to ignore it is simply not the right attitude. 

Sometimes I wonder if the Native Americans had it right all along because they had no concept of ownership of any kind, including their own country.  This is why they never had to worry about defaulting on a loan.  They shared in everything willingly.   And that is why it was so easily manipulated away from them though.  On the one hand they never had to worry about a mortgage payment, insurance, HOA dues, or even cutting the grass.  On the other hand, this type of cultural mentality led to their loss of land.  One could argue that there simply were not enough Indians to stop the influx of White immigrants flowing into the country and that it was bound to happen anyway, but if there were some kind of national government in place perhaps a deal could have been arranged to avoid the takeover. There is no going back now and we have to live with the current economic conditions.   

But Indians did not use money at the time, so an economic collapse due to housing would have been impossible.  But it sure would be nice to not have to think about money or bills for a while.  Today’s society has no concept of sharing because we are all out for ourselves when it comes to home ownership and getting the best deal possible.  Nobody cares about whether or not the sale of their over-priced home will have impact on the rest of the community as long as they get what they want.  Hopefully, we have learned from our mistakes and will be more conscience of  our actions in the future. 

What South Florida is experiencing now is not unlike pre-meltdown housing numbers, but make no mistake about it, everything has changed in the way we conduct business.  The perfect housing storm arises first from rising seller prices.  Although not enough to bring a lot of homeowners from the abyss, it is still enough to rescue many others.  Another factor that has been taking hold are buyers who are coming to the US to invest for various reasons, although mostly political.  All of the political and economic unrest in various parts of the world have led to foreign investment in US housing.  These buyers are coming in droves too, and this has led to a shortage of inventory, thus driving up demand and prices.  In particular, Canada, Venezuela, Argentina, Brazil, and China are the biggest movers and shakers in the home buying business. 

American buyers, on the other hand, are driven more by simple economics like interest rates.  Foreigners do not have to worry about that because they buy with cash, but with Americans who finance it is the single biggest factor in the purchase of a home.  Give out zero percent interest rates like the auto industry and the run on housing would be so great that we would surely run out of homes to sell in record time. 

So, given the fact that we have a great deal of buyers for homes, low interest rates, higher home values, and a shortage of inventory all point to a housing perfect storm.  This time, however, it is all for the better. 

 

 

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Short Sale Madness

I think so. These days just about everyone is processing a short sale for little to no money at all. But, like my Grandpa always said, cheap is expensive. And that applies in this case too. Even if you have to shell out a few dollars to get a short sale started, is it not worth the peace of mind knowing that you are protected by an informed and licensed individual, rather than someone simply setting up shop? I only say this because I recently lost a listing when my competition offered the attorney side for free through their title company. It just seems to me that when you jump in this pile with the others you eventually end up at the bottom of the short sale stack, which eventually leads to no closing at all. When it comes to protecting the integrity of your credit and property I always recommend hiring a qualified real estate attorney. He/she will take all the harassing calls, slow down the foreclosure process, negotiate the best deal for you, and work in all of the closing costs so that you have no out of pocket expenses. My competition also stated that she knew someone at the bank whom she had an “in” with. That was probably going way too far because I don’t believe anyone has an “in.” What makes you so special that the bank is going to give you priority over the millions of others who are in mortgage trouble? Nothing. As I always say in situations like this, take a ticket and stand in line. The moral of this story? Be careful who you hire to list and represent you in a short sale transaction. Not everyone is built for doing it and there are a lot of agents and processors who will simply tell you everything you want to hear. Check them out thorougly and even go so far as to check references from prior or current customers. If an agent or lawyer is not willing to give these to you they probably are not for real. In this case in particular, I would have asked to speak to the “friend” at the bank personally.

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