Somebody has got to step up to the plate and proclaim that the real estate market in Florida has bottomed. Since I am not famous or well known in any way, I’ll proclaim, “Florida real estate has hit its nadir.” The next stop on the real estate trajectory is up.
In case I’m wrong, no one you’ve ever heard of will be embarrassed or have to appear on Oprah and bleat mea culpas all over the place. I’m willing to make this statement of optimism, however, because the smartest financial person in the world, Warren Buffet, has just made a substantial real estate investment.
While this investment did not take place here in Florida, it did take place in the world of real estate. Bloomberg announced that Home Services of America, a brokerage controlled by Buffet’s Berkshkire Hathaway, Purchased Koenig & Strey, a leading property broker based in Chicago.
So if Warren Buffet is willing to invest his brains and money in real estate, then I am willing to put my non-celebrity status on the line and declare that real estate is about to make a comeback. For the 9 people who currently follow me on Twitter, feel free cover me with adulation or excoriate my opinions as you see fit.
I don’t expect rapid rises, and I hope never to see the foolishness that overcame the market as it moved toward its zenith in 2006. However, current figures of real estate at reality prices are looking good. The Case Shiller U.S. National Home Price Index increased again this past quarter.
The Wall Street Journal tells us that this is the first quarter-on-quarter increase in three years. Other than Las Vegas and Detroit, all other cities in the Case Shiller index of 20 showed gains.
Nationally, prices are down an average of somewhere between 25-30% from their peaks of 2006. In South Florida, where I sell real estate, we have seen drops between 30-45% on single family homes, and precipitous plunges of up to 80% on a few hapless condominium developments.
But, on an opposite tack, back in June of this year, according to the Florida Association of Realtors, prices stopped their steep plunge and the median price of an existing single-family home in Palm Beach County rose to $250,300. This was the highest level since October of last year. As later statistics arrive, I’ll be pleased to add them in support – or to disparage – my current optimistic view.
And, just to an additional optimistic note, consider this statistic from a nation on the opposite side of the world from us. In New Zealand, a place which doesn’t figure in a typical real estate conversation, it appears that there is a shortage of new listings. Yes, real estate fans, you read it right. The National Business Review reports that this lack of listings could lead to a rise in prices.
So the real estate ball appears to be in motion. While it may not yet be in our part of the court, it is no longer out of sight. So start coming in off the sidelines, because the game is about to begin again.
Written by Marc Jablon, Realty Associates
marcjablon@yahoo.com / 561 / 213 – 6139
www.marcjablonhomes.com/
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