The South Florida Real Estate " Bubble "

The South Florida Real Estate " Bubble "

You must analyze the content of the bubble to know the whole story.
Some of the Naples Florida real estate market was not in the bubble.

Speculators flooded the South Florida area during 2004 and 2005 and drove up prices. Many apartment complexes converted to condos to feed the appetite of the speculators. Developers all over South Florida went wild offering pre-construction opportunities to the speculators. Naples real estate home prices went way up.

By 2006, we had reached the peak of the speculative market frenzy in Naples with inventories low and prices high. Sales began slowing by spring and inventories began to build. The hurricanes and the negative media coverage about the South Florida property market made matters worse and sales really began falling hard by summer. Sellers were slow to believe that the market had changed from a sellers market to a buyers market during the fall of 2006, so the stocks of unsold homes and condos surged.

It's important to know what the speculators bought, because that is where the bubble came from.

During the frenzy years, the lowest priced properties appreciated the most. Many of the condos that were around $150,000 went up into the $300-400,000 price range. The market was flooded with thousands of low to moderate priced apartment complex conversions and thousands of pre-construction offerings in new projects, which is what appealed to the speculators. The bulk of the space occupied in the " Bubble " was made up of the " Speculator Products ". Some very well-healed investors speculated in the higher price ranges as well in an attempt to reap larger profits during this frenzy. So the bubble also had some of this product in it.

However, there were still many homes and condos located in well established
neighborhoods and on the beach that escaped a good part of the speculative frenzy.

Remember the old slogan; " Location - Location - Location ". Homes and condos in the well established locations have appreciated in a more orderly fashion. Homes and condos in the well established areas are still selling and will always sell no matter what the market conditions happen to be.

It has taken quite a while to flush out the speculator inventories and to end the negative press about the bubble. During this time, prices fell for the speculator products and prices remained flat to falling slightly for the " Bread and Butter " products. In May of 2005 you could count on one hand the number of condos priced under $300,000 in the better locations. However, in May of 2006, there were hundreds on the market in the same locations. Prices throughout the Naples area have already fallen to the pre-2005 levels. Astute buyers are taking advantage of this situation right now and are purchasing in the well located communities.

So, when is the best time to buy? Scores of sales are occurring daily for the " Bread and Butter " type products that I mentioned above and on occasion a good offering will sell right away. In my opinion, Summer 2010 could shape up to be an excellent time to purchase if you are looking to buy in an existing neighborhood or on the beach. The safest bet is to buy in the existing well located neighborhoods.

I can help you to buy wisely.