What Happened to South Florida Real Estate?

It is a well-known fact that real estate has taken a serious plunge in this country. Here in South Florida, this is what happened. Back in 2005, construction developers were on their A-game as they built house after house purchasing land wherever it could be found and churning out nice homes for middle-class America. In this life of abundance, many people saw a great opportunity. They began to buy homes to "flip." Essentially, they would purchase homes at the going "cheap" rate and sell them back in no time for a high profit.

This went well for a while until the developers saw an even greater opportunity. They would purchase a home in their own developments thus setting their own prices. Still, that was not so bad as people kept trying to flip house and land. Real estate agents were purchasing a lot of properties for themselves then selling them back to their clients. Things were good and the market flourished, so the mortgage lenders saw their opportunity to sell mortgages with some crazy terms. In this frenzy, people were not really paying attention to adjustable rate mortgages and other outlandish mortgage terms because they had no intention of keeping these homes.

It was a time of plenty and those who never thought they could own a home, were owning two or more. It was the days of 0% financing and low rentals. Rental communities were being converted to condos and being sold for extremely low prices. But all good things must come to an end.

The housing slump did not happen overnight, the warning signs were there. First, property taxes started hitting the roof and buyers were getting more skeptical. It was also becoming obvious that houses and lots were staying on the market for longer periods. Homes were being listed on the local Multiple Listing Service (MLS) and sitting there for months without movement. Prices started to decrease as desperation began setting in. Sellers were getting nervous and buyers could not get loans. Panic set in.

Now, we had another problem, empty houses. The rental communities turned condos were now in jeopardy as the buyers were trying to get them rented but then so were the homeowners and at the same prices. There were failed projects on many development properties as you could see the grass growing up on the once carefully laid out lots with the dream of homes that were never to be realized. So, desperation led to people doing whatever was necessary to save their finances. They were willing to rent to just about anyone.

Today, we are still living in that state of desperation, but it has taken a different twist, resignation. Homes are being foreclosed everyday and homeowners are giving up the fight. It is a terrible and sad situation. One that we hope will never be repeated. Some say it stemmed from greed, others think it was opportunity gone wrong. Whatever is the case, one thing is for certain, we hope it will never happen again!