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The recent stock market plunge is sending a clear message to Americans, that we are not out of this crisis yet. Not by a long shot. The Dow Jones Industrial Average dropped by more than 500 points in the biggest single intra-day loss since the 2008 financial meltdown.
In my previous blog I indicated that home sale cancellations were on the rise. The reason is simple, Americans are scared. Buyers and sellers are waiting to see what happens next. They do not want to get caught up in a large ticket transaction like purchasing a home when the U.S. economy is struggling to stay afloat.
The epicenter of the global financial crisis was and still is Real Estate. Firms gobbled up mortgage back securities consisting of high risk loans that went sour when homeowners began defaulting on their ARMS. As the crisis continues, the Real Estate industry will still be caught in the middle as distressed properties take up large chunks of home inventories across the country.
If you are a buyer or seller in this market, you must tread carefully as the U.S economy heads towards uncharted territory. It’s unclear if and when another financial crisis like in 2008 will occur. In any case you must seriously weigh your options and make sure that if your buying or selling a home, it is a risk that you can afford.
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The U.S. economy continues to struggle as the value of the dollar falls and the national debt soars. Many Americans are debating if a home is still a good investment in the aftermath of the Real Estate market bubble. This really all depends on several variables. For one is the location of the home you would like to purchase. If your in an area that has a large amount of distressed properties, then you may want to re-think getting locked into a 30 year mortgage. Also, it depends on how you purchase the property. Cash is king. The more cash the better. The more you leverage yourself the less appealing of an investment your home has become. If you don’t have enough cash. It’s better to rent and save then get yourself into too much debt. With inflation a growing problem in the U.S, things that have real value are going to be the investment of choice for many Americans. I believe a homes value is not necessarily just it’s market value. It’s the joy and use you get out of the home that matters. Homeowners only focus on what they can get for their home in the open market. It’s this obession that has caused homeowners to spend an substantial amount of money on upgrades that won’t increase the price of the home to compensate for all the renovations they spent on the property. The property at this point becomes an liability rather then a asset. If you are going to upgrade the property. Do it for yourself, not for the purpose of trying to sell the home. You’ll save more money in the long run. As I’ve mentioned before, I believe a homes use is the real value on the property. If you measure your homes worth by that value, then you’ll get more use out of your home and enjoy it for years to come.
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Home values in many parts of the country have been savaged by the credit bust of 2008. In some parts of the country home prices dropped more then 30%. Foreclosures and vacant properties are still a factor in reduced home prices. Luxury homes however are a different story. A recent article in Financial Planning shows that luxury homes actually increased in 2010. The article indicated that 40% of the worlds exclusive property markets increased in value in 2010. Asian markets were some of the top gainers. I’ve emphasized in previous blogs that Florida is becoming extremely attractive to high income earners. With lower taxes and a beautiful climate. It’s a no brain-er if you’re someone who is in a high tax bracket. Wealthy foreigners are also flocking to Florida because they want to take advantage of low home prices. So as far as luxury home are concerned, it’s very likely that luxury home prices will stabilize or rise in value as that niche market thrives due to the growing number of millionaires and a rising middle class found in the states and in emerging markets around the world. Florida could be the next playground for the rich if it isn’t already.
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America’s top earners are migrating from states like New York and New Jersey to the warmer climate of Florida. That according to a Forbes article written last summer. The move to Florida, Texas, and other southern states is becoming an increasing trend due to economic uncertainty and higher tax rates in northern states that is prompting upper class earners to move south of the Border. Florida and Texas alone have some of the lowest property tax rates in the nation, Florida being #8 and Texas #4. In Florida, there is no state income tax which is another huge incentive for those in higher income brackets to move to Florida. Some of the more popular counties for the rich are Nassau and Walton counties located near Jacksonville and Pensacola Florida. However there are many cities in Florida that can appeal to the wealthy. Miami is an obvious choice. With an amazing night life and beautiful luxury homes such as in Star Island and Boca Raton, Miami is certainly a great choice for the urban jet setter. There’s also Tampa which is located on the west coast of Florida. Tampa is surrounded by some of the most beautiful beaches in the state found in Clearwater and Saint Petersburg. Tampa has premier luxury homes such as in Bayshore and South Tampa that cover a number of styles and designs. Tampa is also an hour away from Orlando, Disney, and other attractions. Tampa and Miami are just a few of the many great places Florida has to settle down. If you have any questions. Please contact me at frank@findmyfloridahome.net or click on the contact button on the TampaLuxuryHomes site.
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According to an article on TampaBay.com, foreign investors have doubled their purchases of Tampa Bay real estate since last year. Normally foreigners flocked to Miami for bargains after the market bubble of a few years ago. Now foreign investors are looking to Tampa for bargains. You better believe that among these foreigners, a nice percentage of them are looking for luxury property. “Another factor luring the foreign cash:Luxury condos are currently looking cheaper than the cost of building new ones. New construction has halted as the market rids itself of excess inventory from the building boom”(Puente, TampaBay). If your looking to purchase a luxury home, expect to have some competition as investors from across the globe are looking to Tampa for a good deal. Some of the areas that foreign buyers will most likely look at are beachfront properties. Saint Petersburg and Clearwater are the obvious choices. If there is a luxury property that has caught your eye. You certainly want to make a decision quickly as more buyers are flooding the market to look for the right priced home.
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Everyone loves to have a little luxury in their lives. Come on who doesn’t? We all want to save to buy that luxury sports car with the leather seats and the big engine. When we fly, we accumulate frequent flyers points so we can fly first class. When it comes to purchasing a home, not only do we want value, but we want the luxurious amenities that come along with buying a luxury home. If you’re trying to sell your home, focusing on luxury will get you major points with buyers. One great idea can be installing a retractable screen over your pool. This adds some wow factor to your home. If you have some exotic cars with a garage to show them off. Keep your garage doors open when potential buyers come and visit. Buyers want to visualize where there putting their stuff when they visit a home. Let them imagine how there Mercedes will look like parked in the driveway. With the kitchen, install an espresso coffee maker. The idea having Starbucks style coffee in the convenience of your own will make buyers scream with delight. These are just some of the many things you can do to make your home standout in todays buyers market. If you have the money, spare no expense.
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According to CNN money report, luxury homes sales increased in all 20 major metropolitan areas last year. Some areas saw an 18% increase in luxury homes sales. So luxury homes are still a prominent part of the real estate market. The reason luxury homes are still in demand is due to several factors. One is high end or upper class segments of the population haven’t been affected as much by the financial crisis as those in lower income brackets. Luxury homes are also a niche market that makes up a small percentage of transactions. This doesn’t mean that luxury homes have remained unharmed by the Real Estate bubble. Luxury homes still have lost some value as we continue to progress through what is deemed, ” the great recession.” But in the grand scheme of things, luxury homes present a great opportunity for buyers and sellers since it will be easier to sell or find a home in a market that has remained somewhat consistent in this market environment.
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We try to spare no expenses here at Team Masse and we strive on delivering state of the art technology on behalf of our clients. We have gone ahead and purchased an IDX search solution directly linked to the Tampa MLS, similar to the one used by Real Estate Agents. The only difference is that it gives the consumer more options to create searches, save searches, and generate emails of real time data of property listings.
Please go ahead and try it out for yourself. You are able to create an account and begin inputing data that helps you locate only the properties you are interested in. The data will be mailed to you as often as you choose. These services are completely FREE to our Buyers!
You can get started now by clicking the button below:
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