Is This Another Real Estate Bubble?

Two questions need to be answered when multiple offers, bidding wars, tight inventory, and Realtors buying properties become the norm.

We have been seeing strong demand and rising prices for the last three years. The real estate market in Southwest Florida was decimated during the real estate crash, so it is not only reasonable, but also smart, to be alert for signs of danger. Values dropped by over fifty percent from the boom prices of 2005 to the depths of despair in 2011.

Many have been asking if the bidding wars we are seeing are leading to another bubble. Multiple offers are a sign of strong demand, which we definitely have.

There is one irrefutable sign when prices are not sustainable. I will get to that in a moment, first you need to know the two most important questions to ask:

  1. Who?
  2. Why?

Who is buying real estate, and why are they buying it? If you pay attention to the answers, you will have a good grasp on the overall health of the real estate market.

During an eight month period of 2014, over half of the agents in my office bought real estate. Now, we have a small office, still you had six agents buy property in a short period of time. Is that a warning sign?

It could be. The first wave of foreclosures during the crash was heavily populated with agent owned properties. I cover that in more depth in my upcoming book, Real Estate CSI: Controversy, Secrets, Insight. A real estate agent exposes dangers and dirty tricks that cost you money.

The second question determines if that is cause for alarm. Why? Answer: We all bought real estate to own it. None of those purchases was for a flip, or an attempt to get into the chain of title for profit. We all wanted to own the properties we bought.

That is a strong indicator of healthy market growth ahead.

During the boom, everyone was buying real estate. Anyone who could fog a mirror was clamoring to grab the next property available, and many times contracts were selling multiple times before the first closing even took place. Properties weren’t even changing hands. Just the contract to purchase was being sold at a profit to someone else.

Who? Everyone.

Why? For fast money. They didn’t want to own the property; they only wanted to get their name on a contract that could be sold tomorrow for more money.

The most important sign among the many:

When “everyone” is buying, but few actually want to own it, that is a bad sign.

So who is buying real estate today, besides half of our office? Baby boomers; early retirees; investors; snowbirds; first time buyers; move up buyers; people who love Florida and want to enjoy it for more than a couple of weeks a year; and the occasional flipper.

These are good people to see spending their money in the marketplace, and a sign that bodes well for the future.

Respectfully,

Jim Sweat, ABR, CRS, CDPE, GRI, e-PRO, ILHM

REALTOR

Author of REAL ESTATE CSI: CONTROVERSY, SECRETS, INSIGHT (coming soon)

American Realty of Venice, Inc.

700 W. Venice Ave

Venice, FL 34285

941-484-8080

http://myfloridahomesmls.com/JimSweat Home search

www.linkedin.com/in/jimsweat LinkedIn

https://www.zillow.com/reviews/write/?s=X1-ZUyz3incawqo7d_93ahq Zillow

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Nearly extinct a few years ago, I found several in Sarasota. Here are two videos

Two videos below.

A few years ago, you couldn’t find one anywhere in the state of Florida, but they are making a prolific comeback in the Sarasota area!

I was down by the Sarasota Bayfront Park, by Marina Jack’s and whipped out my camera phone. There were several nesting near the base of the Ringling Causeway Bridge and others dispersed along the bayfront.

Interesting creatures. They build temporary nests. Temporary because the larger and more elaborate the nest becomes, the more people are attracted to it. Eventually, they just move to another location to start building again. It is pretty easy to tell from the videos exactly where they are currently located, if you want to go see them yourself.

Just stay back away from the nest, there are temporary fences put up to reduce the chances of people getting too close.

Sarasota has a rich and healthy environment that should continue to draw more in as time passes.

Enjoy the videos and let me know what you think.

If you know anyone who would like to make this wonderful habitat their own home, I work Sarasota county, Manatee county and Charlotte county.

Respectfully,

Jim Sweat, ABR, CRS, CDPE, GRI, e-PRO, ILHM

REALTOR

Author of REAL ESTATE CSI: CONTROVERSY, SECRETS, INSIGHT (available 2015)

American Realty of Venice, Inc.

700 W. Venice Ave

Venice, FL 34285

941-484-8080

http://myfloridahomesmls.com/JimSweat Home search

www.linkedin.com/in/jimsweat LinkedIn

http://www.trulia.com/profile/jimsweat Trulia

https://www.zillow.com/reviews/write/?s=X1-ZUyz3incawqo7d_93ahq Zillow