Real Estate in Northeast Florida and Around the World

How many times have you heard someone spew out information about the nation's real estate market?  Have you thought about what this really means?  Do you consider that such a market truly exists?

A national real estate market exists as much as a national college sports team exists.  Everyone has a favorite college sports team, but every area is different.  In fact, there are some areas of the country where you can have 2 or more very predominant sports teams, just like there are areas in the country where you can have very different real estate market environments.  Housing markets are local - not national.  While there may be similar activities occurring in different markets, a 20% decline in values or sales in one market does not automatically occur in every market.

Take Florida, for example.  In the news, Florida is commonly referred to as one of the worst real estate markets (right there with California and Nevada).  However, if you look deeper into the statistics, you will find that Northeast Florida - specifically areas around Jacksonville - are in much better shape and have fewer instances of foreclosure, fraud and flipping (the 3 "F's") than Miami, Ft. Lauderdale and the Tampa markets.  In fact, in most "troubled market" reports, Jacksonville rarely makes it on the radar screen.

Also, you will hear that the nation's housing market is suffering, right?  Did you know that there are markets in the country where real estate values have been increasing during the last 2 years?

Talk is cheap.  We should demand more facts and less conjecture from our media sources.  If you are interested in factual real estate data for your part of Florida or another part of the country, just let me know.

I talk to people on a regular basis who are sitting on the sidelines, waiting on the bottom of the real estate market to be found.  They all ask for my opinion as to where I think the bottom is, and those that know me, understand that I will always give honest feedback. 

The answer that I always give is "by the time you know where the bottom is, the prices are climbing again."  That is followed by "and it's only a buyer's market if you are buying".  The truth is, no one knows where the bottom is.  Are we close to the bottom in Jacksonville?  I think so - for what that is worth.  Buyer interest is increasing, inventory is reducing and interest rates are the lowest in over 30 years.  Does that mean that the market will "boom" again anytime soon?  No - but it means we are seeing signs of the return to "normalcy".  Yay!!!

The fact is, the DOW has fallen from it's peak of near 15,000, down to the 7,000 range.  That's over a 50% drop.  In our market, real estate has fallen on average from 15% to 30%, depending on the type of dwelling and area of community in which the property is located.  My point is that when investing for the long haul, where is the safe bet?  Real estate.  Everytime.  Real estate isn't made at the rate it is consumed - and for that matter, the areas where real estate is being made are not necessarily places in which most people generally will want or be able to live.  So - if you are looking for house, and you are looking for a long-term investment - 5 or more years - then Real Estate is where you should be putting your money. 

There is a familiar term that is kicked around by real estate and lending professionals to parents with college age children - Kiddie Condos.  Because of the terms "Kiddie" and "Condos", many people are turned off and do not bother to explore just how this type of housing situation works, and why it may be a benefit to them.

The concept is this - rather than paying dorm fees plus meal expenses plus other room and board costs for a child that is attending college, put that child in a condo - or house - and when the child graduates from college, there is a tangible asset to go along with that diploma.  In many cases, this situation is comparable to in price, or less than paying dorm fees and/or rent (where does the student live during the "off" months?".  The student does not have to be a full time student, does not have to have a job - although if they do have a job, that's OK, and the dwelling does not have to be a condo.  Mom and/or dad will need to co-sign and be qualified for the FHA financing that makes all of this possible.  And - if the dwelling is titled in the child's name only, the child could receive up to $8,000 in first-time home buyer tax credits!  Wow! Would that come in handy for college tuition?

This program has been around for years - tried and tested - but not as publicized in recent years. FHA financing once again, is becoming a favorite among buyers and lenders for their fair but sensible lending standards, affordable terms and availability of money.

If this sounds like an interesting idea that would be a solution for your child-student's housing needs during college, drop me a note to provide you with more information on this program.  You can also get more information on the tax credit by clicking on "Stimulus Bill Info" in the right-side menu of my website, or by going to www.IRS.gov.