Florida Home Buyers and Investors Blog

As we see the cliff like reduction in the inventory of lower cost homes, the number of mid and upper priced properties continue to rise.  Currently they represent 30% of the market, but as the new year rolls in, and loans on the higher priced homes begin to adjust, we will again see continued downward pressure on pricing for these luxury properties that were once thought of as untouchable.

Although Palm Beach, the Island has seen properties values rise in the down economy, inventory is rising.  As that inventory continues to increase, prices will undoubtedly come down to earth.

In some of the most prestigious condo buildings on Ocean Dr. where condos are rarely up for sale, maybe once in 5 years, now has 3 in the same building all for sale.  I guess that's good if you have $7-$10 Million to spend.

As the stock market continues it meteoric rise, with no underlying fundamentals, we will also see that train headed for the brick wall.  Banks especially are cooking the books, with Federal Blessing, just as the Federal govt gets into MBS(mortgage backed securities) business, by packaging Fannie Mae and Freddie Mac loans for the fed to purchase. 

I smell the next meltdown in the not to distant future.

It's not all doom and gloom.  1st time home buyers are getting great deals on lower priced homes, will begin to fix up and take care of the neighborhood eyesores.  Always a good thing.  With tighter lending requirements, the likelihood of default will be minimal, thus stabilizing the communities and associations that are drowning in debt.

All we can do now is wait and watch to see how things pan out.