I have spent the last couple hours updating some information for investors that I work with and thought I would share this part of an e-mail I just shot off;
No matter what you might read or hear, the south Florida real estate market has been on fire. To give you an idea I just updated another investor who regularly participated in bank owned offerings at one of my favorite target “investor” developments in Palm Beach Gardens. We could buy 1 bedroom units in there in the low to mid $60,000’s not more than a couple months ago. It had been about 5 weeks since I had updated my cost analysis and I just did so this morning. In the $60,000’s an investor could easily make between 6% to 8% cash on cash return that I considered fairly risk free not counting tax benefits or future appreciation. Because of this and the risk in other investments investors have flocked to the market.
Believe it or not, as of this morning there are a total of 6 one bedroom units in this development with list prices between $130,000 and $190,275. Does this mean that prices have doubled? No, it means that prices are on the rise and the easy money has been made. It also means that these list prices look to be highly inflated and either prices are going way up or sellers need to lower their prices to see what buyers will react to. Needless to say the 6% to 8% limited risk days are over with and investors are going to need to count on future appreciation more so than cash on cash return. Still opportunities but the rocks I can find them under have thinned out considerably.
We still have a few years of foreclosures ahead of us but the market has been absorbing inventory as you can see by the illustration above.
Always at Your Service,
Tom Priester e-PRO
“Results Driven Real Estate”
Keller Williams Realty