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Here in South Florida we have been watching the number of homes for
sale pile up to historical levels while the number of homes sold drops
off to almost nothing. This has been taking place over the last 6
months or so (see Number of Homes for Sale vs. Sold chart at
http://www.ewm.com/trendx/). I know very little about real estate but
even to me it looks like something big is about to happen. I am also
aware of loads of new condos and other new construction coming on line
within the next year. Will this be the straw that breaks the camel's
back?
Also, we know that a great many people financed with exotic loans with
introductory periods of no interest, no payment or interest only. This
unfortunately includes some of our friends. When the introductory
periods end (perhaps within these next 2 years), will these folks start
a new flood in this already flooded market?
My question is, what should we expect to see in the local RE market
within the next 2 years? Will all of these sellers simply take their
properties off the market and try to wait it out (and therefore try to
avoid lowering the price on property). For those with the "time bomb"
mortgages, will we see a huge tide of foreclosures or is there some
other way for these people to avoid a potentially disastrous scenario
if they must sell and prices have declined? Will the state or local
governments intervene on behalf of these people to avoid some kind of
economic backlash?
Should we be reading up on how to buy foreclosed properties?
Bill E.
Hollywood, FL
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Market downturn: How will it develop?
