DOUBLE DIP RECESSION OR LAND OF OPPORTUNITY

Robert Kiyosaki, author of the book “Rich Dad, Poor Dad,” for years has a shared a basic principal to financial wealth that says, “When everyone is buying, that is the time to sell, and when they are selling, that is the time to buy.” When you consider the roller coaster ride the stock market has undergone due to the unemployment rates in the United States and the financial instability in Greece, Spain, Italy and some of the other European nations, there is a renewed urge for many to look once again into the housing market as prices and interest rates have not been this low in many years. European investors and domestic end users alike are looking at the opportunities and lifestyle that Florida affords, and are once again within financial reach. We are seeing the evidence of this upturn, as buyers are now coming back into the market. Interestingly enough, despite the low interest rates, many buyers are paying cash as the volatility of the stock market has paved the way for a more sensible and affordable approach to home ownership, whether it be a primary residence, vacation home or weekend getaway. Rather than lose money in the stock market, real estate now appears to be a more stable investment. Waterfront boating communities have once again become affordable, particularly in areas such as Cape Coral, Fort Myers, Punta Gorda, Port Charlotte and the gulf Islands. In the past three months alone, over 120 homes listed for over $1,000,000 have either sold or are under contract in Sarasota County alone from the Siesta Key beach area through St Armand’s Circle and Longboat Key, a strong signal that despite warnings of a double dip recession there are many consumers who feel the time to buy has never been better. While August, September and early October usually signal the most quiet time in the real estate market, many Realtors are finding the traditional “slow down” during these months has not been quite as severe this year, it is literally becoming more of a “year round” business. Bargain hunters will always search the internet for a deal, but the most encouraging news has been that there have been many more homes that have sold over $500,000 this year than over the past few years. Another sign of a more robust rebound is the number of new home starts. Waterfront vacant land lots in areas such as Cape Coral, Punta Gorda and Port Charlotte, Florida are now more affordable which makes the total expenditure for new home construction more cost effective. Lot prices have dropped “30-60 percent,” stated Punta Gorda Building Official Randy Cole. Mr. Cole went on to say that while there could be a cost differential of $100,000 between buying an older existing home and building new, the person building a new home would avoid higher costs associated with renovation, maintenance, insurance and cooling. New building codes, put into effect in 2002, make homes built today stronger and more energy efficient. Cole continued to say that in 2010 and 2011 the city (Punta Gorda) “saw 38 single-family homes get built. So far this year, 43 have been permitted with the 2012 total to top 50.” City inspectors have “logged 160 inspections” during one week alone this summer up from 90 per week last summer according to Cole. Homes that sold during the peak of the market for $800,000 can now be built new for $450,000-500,000, and construction firms such as Keith Towles of the Towles Corp., Tom Fero of Fero Construction and Arthur Rutenberg homes are all seeing significant upticks in new home construction. Frank Letterie , owner of Rock Hard Homes also points out that waterfront lots are priced well below those from Naples to Sarasota. Despite economic reports that suggest the recession may not be over, if existing home sales and new housing starts are any indication, I believe we may be well on our way to recovery!