Real Estate: Is the Bubble Bursting?

The real estate market has had a bit of a setback in the last two years in case anyone has not noticed. Is it the bursting of a bubble or just a hitch in the market's giddy-up? With foreclosures in the ten percent range, that is a tough call. A hitch in the market giddy-up seems more likely, at least to me.

In our local market, the Florida Keys, sales are starting to pick up. Sales prices are well below the original asking prices of one to two years ago. Homes listed in the high nine hundreds are going for the mid five fifties. That sounds like a crushing blow for local real estate, but the increases from 2003 to 2005 were unprecedented. Driven by the retreat of the equities markets and ridiculously low interest rates, the herd moved into real estate.

Those in the rear of the herd are eating more than trail dust. Financially challenged flippers will be swallowing 25 to 40% losses or need to sit on the properties three to five years longer than expected to have any return on investment. With many of the real estate flippers over extended, there are more real deals showing on the market with banks in some cases offering short sales, forgiving up to 25% of the original loan amount.

Attractive mortgage rates in the 6% range are available for those who qualify. Old school consumers that limited debt and maintained their credit scores are beginning to take advantage of the buyer's market, in turn making more affordable older homes available. This indicates that the hitch in the giddy-up is starting to get stretched out and is loosening up real estate sales.

So what the heck is a fishing captain in the Florida Keys doing talking about real estate? The current market condition is giving me an opportunity to have a little fun.

A friend has a property the he wants to sell; I have some free time on my hands, so we are going to sell that sucker on eBay. There is one inquiry that has to be settled first, but if that does not pan out, it is off to eBay for some exciting auction action.

It is surprising how many real estate listings are on eBay auctions. Small homes for handy types to mansions in France, the list of properties on eBay is remarkable. A hundred- forty year old church building complete with stain glass windows, converted to a barbeque restaurant, will be an interesting addition.

You get what you pay for and this free advice is worth every penny. If you are old school with good credit, keep an eye on real estate. Check out your local newspaper for real estate auctions that are growing in number. And don't forget to check out eBay for deals you may not have expected. Then again, you may be more comfortable hanging with the herd.