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I do not know, and nobody really can know for sure. However, I am absolutely convinced that real estate prices in central Florida will continue to increase substantially over the next 25 years, well past 2046! That means that if my sense is correct, and you are 30 years old today and own a home with a current value of $400,000, the value of In March 2005 I pubthat home when you lished a Coffee Hour turn 55 will be well over with Beat with the title $1 Million. However, “Homebuyer Beware,” where I warned readers this will not likely happen in a straight line about buying a home over the next 25 years they could not afford. and at times, your home To me, the writing was may have a lower value on the wall, and I foresaw a crash on the hous- in the future than today. ing market long before I continue to be very opsome of the famous economists had the same timistic for central Florida in the long run. As a idea. matter of fact, my group of companies has decidShortly after that preed to concentrate investdiction, the crash on the housing market did ing in real estate in central Florida. Selling our happen in 2007-08 and following. The housing real estate investments in Australia, Canada, bubble burst triggered China and Indonesia, we many to reach out, including a Swiss reporter, have shifted a significant who had discovered my portion of our focus to 2005 article and question the over 10,000 acres of why I made such a pre- land we own in central Florida. diction. With more than 30 years of experience as a real estate entrepreneur in central Florida and around the globe, I believe that I’ve developed a sense for the markets. And as of late, the current state of the housing market, interest rates and economy have people asking, “Will there be another crash like in 2007? Does it not feel like 2006? Will there be a recession? Will there be hyperinflation? Etc.”
HOWEVER, land, home and other prices have increased dramatically over the last year. Caution is always advised when the sky is the limit, although I do not see any reason for a housing price crash at this time in central Florida. In 2006 many homebuyers bought single-family homes for speculation reasons only. This is not the case today. As a matter of fact, there is presently a shortage of
homes all over the United States. There are other forces working, this time I do not think Florida’s economy and state of the housing market will cause a crash, but if tomorrow a large bank in Europe or Asia (and there are several larger than Lehman Brothers with thin capital) fails, and government, wherever it is, does not come to aid in time, then all bets could be off, as we saw in 2008-09. Florida historically and continues to be a fertile place for speculation. If it is too good to be true, we usually are in. So, I urge you to please not speculate with your home, the place you raise your family. It is not primarily an investment, it is a capital good, which you need to be able to afford in good and challenging times. Do not finance shortterm, because of lower interest rates and amortization. These loans are not made for people who cannot afford longterm rates and other conditions.
American Dream, many times renting your home or apartment is financially a better choice, particularly in a volatile market environment. For instance, if you are at retirement age, it may be wiser not to buy a residence, you want to stay flexible. Whether you need to quickly transition to a residential solution with less upkeep and more care like an independent living community or assisted living community or want the flexibility to travel, you do not want to be forced to sell your home at the wrong time in the market, because of another pressing need. Home prices will go up over the next 25 years, I am convinced, but they can as well go down at times. So, my caution from 2005, Homebuyer Beware, remains true, but for different reasons. Do not speculate with your home, purchase within your means and if you cannot, then rent! Happy 4th of July from My Family to Yours!
While ownership of a home is part of the
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