Hi folks. As I was reading my daily “Early Bird News” put out by our Florida Association of REALTORS® I was enlightened by the real reason for our housing downturn. This may come as a shock to some of you……are you ready?
Speculators! Who would of thunk it. Well I sure did. My market, Poinciana Fl, was raped by speculators. It seems like every “investor” from NY and South Florida swooped down on Poinciana to purchase every new construction home they could with the intent to flip for a profit.
The appeal was new houses that could be bought in the mid to high 100s that would have cost them $300,000 to $400,000, or more, in the areas they were from. It seemed like an easy game plan. Purchase for $175,000 in Poinciana and then by the time construction was complete turn around and sell it for $275,000 and make a nice tidy profit. Some speculators got lucky and did.
The problem was they got lucky by selling it to another Investor who then thought they could sell it for $350,000 but couldn’t. So now these properties sit empty. They can’t sell them and they can’t rent them.
Now they are attempting to get a “short sale”. But here’s the problem. When they purchased the property they bought them under the pretense of being their primary residence. Even though that was never the intent, they figured by saying it was a primary residence, they would qualify for a 100% loan. And they did. But they lied and actually committed “Occupancy fraud”.
Now when they apply for the “short sale” their lie will be exposed and the “short sale” will be denied AND the Lender could very well go after them for fraud.
What these “Investors” didn’t realize is that “end users” in Poinciana aren’t willing to purchase a home for more than about $225,000. Poinciana is a blue collar and service industry community. Most folks that can afford $250,000 for a home will not buy in Poinciana.
Poinciana is now in dire straights and it will take quite a while to come out of it. In January there were 19 closings. There are currently 1,157 active listings. That’s a dismal absorption rate of 1.6% or 5 years worth of inventory!!
In all fairness, speculators weren’t the only reason there’s now a housing downturn. But they were certainly a major part of it in Poinciana Fl. But this too shall pass. It will just take time. In the meantime, there are starting to be some very good buys in Poinciana. Check out the house below. Do you want to buy it?
Copyright © 2008 http://www.brokerbryant.com/ | All Rights Reserved