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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Rebuilding America’s Real Estate Market Begins in its Downtowns

1950's Columbia

A vintage 1950’s era black and white photo of Main St. in downtown Columbia, SC tells a story of a city’s past. You will notice the hustle and bustle that used to be. The other is the new Mast General Store that now occupies what used to be Lourie’s Men’s Store in the downtown area today. With the advent of the suburbs and malls people slowly moved out of the city and the downtowns across the country began its slow decent into oblivion. I vividly remember as a student at the University of South Carolina in the 1980’s how dead the area was. And I often wondered what it would take to bring it back because the suburbs were actually too far away as the college campus was downtown. I figured that something like South Beach in Miami would have to happen. That took lots of cafes, bars, and retail, something Columbia was seriously lacking.

What it takes are some smart and gutsy business people to come in and take a chance by opening a business there. Well, this finally started to happen last year when Lourie’s Men’s Store, a staple of the downtown area for years, finally closed its doors. Businessmen and politicians from the area stopped shopping. But low and behold, the Mast General Store took a chance and took the bottom of the old store and The Lofts apartments took the top. By doing so the two managed to bring people back downtown. More and more young professionals who are more and more disenchanted with the price of gas are making the move to downtown and walking to work. It seems that hybrids and smaller cars just were not working anymore. As it turns out, the apartments are renting at a fast pace because the demand has returned.

Now, some may call this gentrification, but in the case of Columbia, it can’t be because nobody was living there anymore. This, however, may now be the case in Miami, Florida.

I bring up Columbia as an example of what can be. I now live in Pembroke Pines, Florida, a suburb of Miami, and found that this too can happen in downtown Miami. If you have never been there, the heart, Flagler St., isn’t much to look at and pretty much shuts down after 5pm. My grandfather used to roam these streets in the 1940’s as a carpetbagger and the place used to hustle. He would not recognize now. But the good news is that others like me are starting to recognize the potential in the downtown area and are taking a chance in bringing back some of the old buildings by converting them into apartments, much like the The Lofts. One such building is Flagler First, a loft style apartment building exclusively represented by Fortune International Realty. The prices are more than reasonable and start at $94,000. for a loft or one bedroom. (See photo)

Flagler First

This too is a prime example of young professionals making their way back into downtown areas to be closer to work. And the main reason, besides the drive, is the price of gas. Everyone has now realized that the price is what it is and it’s not going to change. Wishful thinking. Now comes acceptance. Why buy and smaller car when you can just sell your bigger house in the suburbs, get rid of your car altogether, and walk to work? The savings are incredible when you think about it. In this case, gentrification may actually be a good thing. How else are you going to bring downtown Miami back?

If you think that this may be you and you are considering this type of move, contact me, Morris Massre, for more information about Flagler First and a viewing. You will be surprised at what can be. Visit my website for more information about me and other properties at http://www.myfloridarealty.net

The Lofts Apts.

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