Results of the Presidential Election and What It Means To the Florida Real Estate Market
“Houston We Have A Problem”
Now that the election is over and we have who we have as president of the US for the next 4 years, I believe there will be HUGE swings in the Florida Real Estate Market on the whole, which will create HUGE PROBLEMS for some, while creating HUGE OPPORTUNITIES for others.
Depending on where you are positioned in the market how you view the market and what you do about it. Is your glass half empty or half full?
Each problem has hidden in it an opportunity so powerful
that it literally dwarfs the problem.
The Greatest Success Stories
were created by people who recognized a problem
and turned it into an opportunity.
Joe Sugarman …. marketing extraordinaire – Blue-Blocker Sunglasses
Taxes Are Going Up Folks — Make No Mistake About It.
We need to strategize from there knowing big tax increases are coming and, as Danny Devito famously said in the movie Other Peoples Money,
“You can make all the rules you want and when you’re all done, people like us …. We Adjust.”
We need to pay attention to what it was like with 38% Capital gains tax rates.
One more thing before I get into what I believe will happen with the Florida Real Estate Market.
I have this quote printed out and pinned to the wall alongside my desk. It originally came from an Anthony Robbins book and I made little additions along the way. The reason I am sharing this with you is this …. We humans tend to focus on the negatives from time to time and we all know “What you focus on expands”
By reading this regularly, it helps keep me in the proper frame of mind – feel free tp copy/paste to to a word document and put it on your wall as well.
Every adversity has a seed of equivalent or greater opportunity.
The challenge is now to identify the seed of opportunity ….water it and take good care of it.
When it begins to sprout, fertilize it and make sure it gets the correct amount of sunshine.
When it begins to bloom, put in a little more effort and make it flourish.
Before you know it, fruit will being to appear.
While you harvest the low hanging fruit, the rest of them will just begin to plant.
The key is to recognize the seed before the rest of them so you get the best soil.
… Paul Forsberg …. aka TheLotGuy
So lets get going …
First, we know without a doubt the capital gains rate is going to increase on January 1, 2013. (less than 60 days from today), which is going to create a massive sell-off in the stock market.
There is activity already pointing to this.
People with brains will pull their money out of the Stock Market and pay the current 15% capital gains rate.
It is better to deal with the devil you know now than the one you don’t
Once they have the money, they will need to do something with it and I believe, while some will put it back in the market at the new basis, others will buy gold, and the rest will buy Real Estate.
This massive sell off will itself create a whole bunch new of problems (un-intended consequences) and there just may be another TARP financial bailout to save the “Adjusted” stock market.
Can you say,‘takeover of the stock market?’
I have been seeing certain things over the past 6 months with hedge funds and investment groups, like Black Rock, “Giant Property Investor Gets Serious in Florida” buying big into the real estate rental property market, both commercial and residential – I couldn’t put my finger on it until yesterday, the day after the election.
They are moving OUT of the stock market and INTO Real Estate because they see HUGE Changes coming and are “Adjusting”.
Do you see where I’m going here?
Big investment companies with deep pockets, who know nothing about real estate, are getting into the market. In my opinion, this will drive real estate prices up and by doing so, more will follow and prices will continue to increase.
Now lets take a little walk back in history to the Clinton Administration before Newt Gingrich became speaker of the house and created the “Contract With America.”
Capital Gains rates were in the 38% range and people had a very hard time selling their real estate because the tax bite was so massive. I remember people saying, “I can’t sell because after I pay the taxes, I won’t have any money left over” or “I can’t afford to sell because I’ll have to write a check for taxes and I don’t have the money.”
My grandparents said it and said it often. They suffered financially until Cap Gains dropped to 20% and they could sell their house and retire to Florida.
Think about this a minute -
- If people can’t afford to sell because of the taxes, they won’t.
- This will be a huge deciding factor and will remove a lot of properties from the market.
- Less properties on the market equals less inventory, and less inventory means higher prices.
Creative financing, exchanging, vertical breakups, wrap around mortgages, long term lease options with $1 pay-outs, equity shares, etc. will again become popular.
Nothing new here, all you need to do is look back in history.
This will create a HUGE OPPORTUNITY for to those of us who know how to “Adjust”
Now lets look into what this means to you and me.
Florida Real Estate Prices Will Go Up. They Have To.
Historically, 22% of all retirees moved to Florida. Florida has always been a retirement state, but that is changing in a big way.
As the population gets older, they naturally gravitate to warmer climates.
Along with them, health care providers come to take care of them.
Communities spring up, and stores open up to serve the people of the communities.
Good stuff right?
Keep reading because this is going to blow your hair back ……
The current administration has this Green agenda going on and has pledged to put coal operated utility companies essentially, out of business.
By doing this, utility prices are going to sky rocket.
People living in the colder states will not be able to afford their monthly utility costs and I predict will move to warmer climates a well.
Places like Florida, where we can use the sun to create electricity and keep utility costs down, will flourish!
What does this mean?
Yep – you guessed it …. a BULL MARKET for the Florida Real Estate Market with increasing prices.
An old rancher is talking about politics with a young man from the city. He compares a politician to a “post turtle”. The young man doesn’t understand and asks him what a post turtle is.
The old man says, “When you’re driving down a country road and you see a fence post with a turtle balanced on top, that’s a post turtle. You know he didn’t get up there by himself. He doesn’t belong there; he can’t get anything done while he’s up there; and you just want to help the poor, dumb thing down.”
In Florida, we currently have a Governor who has slashed taxes, eliminated useless regulations and fired “post turtle” employees.
- He has implemented attractive incentives for businesses to locate to Florida.
- Florida is a “right to work” state so we don’t have to put up with Union Thugs.
- Did you know Florida is now the #2 state in America for job creation?
Yep – yet another reason Florida will continue to grow and grow.
Wrapping this up …..
- We have Billions of dollars from hedge funds moving into the Florida Real Estate Market.
- We will see properties removed from the Florida Real Estate Market because people will not be able to afford to sell due to taxes
- Florida is the #2 state in job creation and with jobs comes an increasing Real Estate Market in Florida.
- People are getting older and moving to warmer climates. Florida gets plenty of retirees and I expect we will continue to do so.
- No Union extortion.
- Abundant sunshine to power our homes and keep utility costs lower than other states.
Where do you think real estate prices are headed in Florida?
Please leave your comments in the comment section below.
If you would like to get involved the Florida Real Estate Market before it’s too late, call my office and let us help you get in the game.
I specialize in Vacant lots and Commercial Income properties.
My partner Connie Nowell specializes Residential Homes.
We also have a full service Property Management division for rental homes. Providing an effortless way for real estate investors to buy a home(s) in Florida and rent it/them out.
The property management division handles everything from repairs, maintenance, tenant placement, rent collection among other details regarding managing a variety of properties.
Call the office 941-584-7400 if there is anything we can do for you.
In closing, I want to pay a special thanks to Doug G. from Austin, Texas.
Doug is an avid reader of my blog and has currently invested in over 400 vacant lots in SW Florida.
(Doug and I and have a mutual friend Ron G who lives in Englewood, Fl.)
Doug, I truly hope we will have the pleasure to meet one day, and if you feel so inclined, I would love for you to make a comment about the blog and how it has helped you make informed decisions on investing in Florida.
I am aware of the entry prices you paid and locations you invested in. …..
Up about 70% since May of 2012 – you done good …. keep up the good work.
The seeds are sprouting already ….. before you know it, you will be sitting on a a whole bunch of large, strong fruit bearing trees!”