Sluggish real estate appreciation getting you down? Don’t think of the housing market as sick. Think of it as convalescent.
It was almost inevitable, during a five-year real estate boom that demand would fall and inventories increase. Now, 2006 is shaping up as the year a fundamentally healthy real estate market purged itself of toxins.
There’s good news for the Central Florida real estate market in all of this. Ocala, Sebring, & Sun N Lake avoided the rampant over construction and speculation afflicting Orlando, Miami and Naples. Also keep in mind that Florida remains the market with the strongest “gravity”: the favorite retirement destination of late career baby boomers. Current projections are showing Florida, by 2030, absorbing new residents equal to the populations of Pennsylvania and Maryland.
That doesn’t mean the short term will be pretty. NAR predicts prices will slip in many parts of Florida as a buyers’ market takes hold and sellers revise their expectations downward.
One factor affecting the real estate market has been the rising property taxes and spiraling insurance rates caused by hurricanes. Part time residents are especially feeling the crunch, as they have no homestead protection. Home owners who declare Florida as their primary residence are able to qualify for the Florida’s homestead exemption, which entitles them to a cap on their annual property tax.
Many sellers must choose now between being patient or selling now at current market prices. If sellers choose not to wait things out, they will have to price their properties competitively. Regrettably those sellers who bought recently cannot compete with sellers who bought over five years ago. Everyone is very aware of the current state of the Florida real estate market, and those investors with good sense will buy when most people are selling and sell when most people are buying.