Predictions are Miami’s oversupply of [tag-ice]condominiums[/tag-ice] will drive the market’s prices down as much as 30 percent. It could be a factor in causing the Florida economy to go into a recession by October
If so, it will be the worst downturn for the area since the 70’s.
Lewis Goodkin, president of Goodkin Consulting Corp, believes it will adversely affect a lot of people.
Will its affects be totally bad?
As always it depends upon how you look at it.
The savvy investor looks for the holes in any market where he can go in and invest. He can often find ways others have overlooked.
Still, the news seems to be bad.
In Florida 20 percent of the employed are in housing jobs. That’s a high percentage.
Naturally, as those jobs dwindle other areas of the economy such as retailing will be also affected.
However, here’s a possible bright spot.
Many retirees are still heading to Florida’s sunny shores.
This time there’s a difference. Lots of Europeans are being lured by the weakness of the dollar which makes their money go farther. This group now includes newly wealthy Russians.
It they continue to come, these older folks would have stemmed a serious recession bleeding for [tag-tec]Miami[/tag-tec] and Florida. (Younger people should take that into account).
Of course this proves the major rule about real estate. It’s all about location.
That’s still true at those times when things get out of hand.
Here’s another important point to remember.
The first to pull out of this overheating market were the local banks.
Is there a lesson here for us?
Watch local banks closely. Observe what they’re doing. In most cases, you will be able to predict the outcome.
As those banks bail out, you’d better go with them.
If you stay, unless you’re a buy and hold investor, you may be the one left without a seat once the music stops.
What will be the outcome for [tag-self]Florida[/tag-self] ten years from now?
We can only guess, but these not so nice times will come to an end after it all irons out. Better times will return.
This market is not for the faint-hearted.
As always, it’s the investor who has the nerve and the ability to find the holes while paying as little as possible for his finds that will come out ahead.