Everyone seems to have frozen in their real estate decisions…panicked because the good times seem to be over. Home prices in many areas are dropping significantly and trying to sell a home seems to take ten times as long…and then you don’t get what you want.
In California, we are experiencing it, although I think our pain is less than some other areas….say, like Florida. I am on a cruise right now, and, of course, cruises appeal to an older audience so about half the boat is from Florida. One couple told me foreclosures in Palm Beach County are up 80% and another man told me that he had bought four houses in pre-construction for about $450,000 only to have them worth about $275,000 a couple years later. Fortunately, the many times I was invited to look at Florida real estate, I accepted the invitation, had a great time, then declined to purchase!
Panic and fear are inevitable, but this is also a good time for a few things. First, reflect on real estate investments and remind yourself to choose wisely…don’t be greedy. Spread the risk.
It is also a time to pick up bargains if you can. Before I got on the boat, I secured a contract on a true fixer-upper on the best street in the little town we live in. I have always wanted a house in town, but recently prices, even for junk, have been out of control. This house listed for $649,000, which would have been $750,000 a year ago. There was also a divorce involved. I am in contract for $589,000 with a 75 day escrow – unheard of even six months ago.