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A couple of nights ago, we went to our once-a-month cruise club cocktail hour. My wife and I are two of the only working stiffs in the group. Most of the members are retired. Obviously, whenever I show up because of my Real Estate history in this area of the state, the conversation always goes straight to “WHAT IS HAPPENING IN THE REAL ESTATE MARKET?”
I found myself in a very upbeat, and excited mood and I was raving about the Real Estate Market and what I see happening over the next few years. I was particularly excited, because for the very first time in my entire career, I signed 30 closings in one day the day before. In fact, I have signed almost 60 closings this week.
Our business in March was up 31% over February and today, April 9th, we’ve already passed the halfway mark of what we did in March. The Real Estate industry is heating up and will only continue to heat up. Needless to say I ended up surrounded by several members dying to hear the GOOD NEWS.
What really got them worked up was when I made this comment:
IF YOU THINK THE LAST REAL ESTATE BOOM AND BUST WAS BAD, YOU AIN’T SEEN NOTHIN’ YET.
Please let me take a moment to share with you want I mean by this statement.
Whether you voted for the current administration or not, it is having and will have a tremendous effect on the Real Estate Industry in the years to come. All the money that has been thrown at the Real Estate Industry to slow foreclosures and lower mortgage rates, plus the $8,000 tax credit for first-time buyers is what is heating up the Real Estate Industry.
Then you toss in the fact that there has been very little new construction over the past 3 years, that inventory is going down and pending sales are going up. Then you have to calculate the physical obsolescence of so many properties disappearing every year to age, rezoning, and natural disasters, plus the fact that the United States continues to add 6 million new citizens every year, and we’re going to have a Real Estate shortage by the end of 2011.
But that is only the beginning of what the stimulus bill is going to do to Real Estate. I think every financial person in the country knows that we are going to be facing some extreme INFLATION due to the stimulus bill. You just can’t spend that much money and put that much money into the economy without causing severe inflationary pressure.
The resulting inflation that we will see starting in a couple of years is going to cause Real Estate values to rise by huge amounts over the next 5 to 7 years. Where I live and where all my cruise club members live is on the water in SW Florida. My comment to them last night was this.
WE WILL SEE OUR PROPERTY VALUES DOUBLE FROM THE HIGHEST TIME OF THE MARKET IN 2006, DUE TO INFLATION WITHIN THE NEXT 5 YEARS.
What I’m saying is if your property was worth a $1,000,000 in 2006, it will be worth $2,000,000 in 5 years because of inflation.
I just don’t see how it can’t happen. I just don’t believe we’ll escape the inflation that the stimulus package will bring to this nation. So while it may be bad for the country, it will be GREAT for the Real Estate Industry.
You may contact James A. Crumbaugh III at jcrumbaugh@allisonjames.net or call 1-866-463-5780
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Comments
Comment by: Saul Gabay
- Apr 19, 2009 1:22:40 AMYou're must be smoking crack! Homes will NOT double in value regardless whether we encounter inflation due to affordability issues. People can't afford the homes they have now and you expect them to be able to afford hommes 2x the price they're at now? Where the F@$% did you get educated? You are right your are a working stiff no smarter than the idiots making $35k a year who bought $500k homes they could never afford. You are one stupid idiot that should have your realtor license revoked for outright stupidity.
Comment by: Allison James Estates and Homes
- Apr 20, 2009 6:20:01 AMWow! Such hositlity. You apparently have lived on the water in SW Florida longer than I have, to be so sure of yourself.
I have written articles and was a columnist for years for the local paper, and so far I have been right almost 100% of the time. By the way, people that buy on the water in Florida, can afford the homes.
Comment by: Mike Kelly,CIPS,CRS,SRES
- May 10, 2009 8:29:56 AMJames, Wow! I was going to start my comment by asking if you could pass me what ever you're smoking!! I'm not hostile but a tad skeptical. I do agree inflation will rear its ugly head but don't forget when we had inflation in the Carter Administration our interest rates hit 18%+! So it doesn't matter WHAT incentive you give Buyer's--none will qualify for a loan!
I also concur with the shortage of homes. In our county here in the Wine-Country of Northern California, homes can be purchased cheaper than they can be built. So builders need the REO's to burn through the system and get some price stability in the marketplace before they begin building anew.
So keep hitting the good stuff! You and the Chief Economist for NAR have acess to the same source!!
Comment by: Caryn Stevens
- May 16, 2009 5:23:19 PMThis article has some very good points - some which none of us would even think of, but when piecing it all together and understanding the basic law of economics, this article could hold some truth and could be infact what we will see in the years to come.
Comment by: Larisa Sayenko
- May 20, 2009 10:01:53 PMI agree that prices for homes will go back, may be not doubled, but sure will be inflated. The prices for food and commodities are inflated already, climbing up and up and the stimulus money not yet utilized. There should be correlation between prices for food, gas, all staff and houses.
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