Posted by Aaron Bosshardt, COO, Bosshardt Realty Services, 12/10/2009
I'm not going to go too much in detail on this information for Gainesville, Ocala, and Venice (Sarasota). The previous posts by Mary Smith of Venice, Craig Wilburn of Gainesville, and Garry Griffin of Ocala are just really reinforced by these numbers. Remember these numbers are sort of old news. The data were just released but the third quarter ended in September.
What I would point out is that all markets go through a Boom and Bust cycle. In the Boom we pay too much, and in the bust we can pay too little for things. Remember, you will rarely time any market just right, but now might be the perfect time to buy. Now don't stop reading just yet. I'm not a blind optimist, so let me explain why.
First I'll hit you with the overdone cliche and over marketed tag line "Interest Rates are at an all time low." This is true. If your a financing buyer or a cash buyer that wants to leverage a little bit more buying power out of the current market, not only can you get cheap money, but you can get it for 15-30 years. This gives you a hedge against inflation, which I think we all know is inevitable. In 2013, when rates hit double digits, you will be giggling to yourself that you locked in a 6 percent interest rate on a 30 year investment.
Second, while prices will still go lower, the current market likely offers the best effective prices you will obtain. What I mean by that is the bottom in prices hasn't hit yet, so as long as no one knows where that bottom is, you as a buyer are more likely to negotiate a better price.
Finally, I am a firm believer that at these prices the real estate market will outperform stocks over the next 15 years. I'm even going to be putting my money where my mouth is on this one. I'm looking into a self-directed IRA that will allow me to capitalize on these conditions. I don't know about you, but I'm tired of the whole mutual fund process and the so called "Fat Cats" on Wall Street.
Though all local markets are different, the one thing I found most indicative that prices are overdone on the down side is that if you had bought a home nice years ago the average across our great country is that you would have only retained $3,000 -$4,000 in equity appreciation. I couldn't make an argument that housing prices should be where they were in 2001. Our markets don't reflect that yet, I don't think they will fall that far. The unique opportunity however, is that tou might be able to negotiate close to 2001 purchase prices here and there.
