Real Estate in Florida 2006

So, where do we go from here? After the astronomical increase in real estate values throughout Florida during 2004 and 2005, the flow of sales has slowed down to a mere trickle. All of a suddden it's a buyer's market with a huge number of sellers having to fight it out to hook one of the very few buyers that there are. The result of course is that prices are now going down and the only question for 2006 is by how much?

The answer to that nobody knows but I fear that we are only at the beginning of a severe downward trend. I believe this because some 35% of all purchases last year were by real estate investors hoping to still make gains in a rising market. As the market is no longer rising and yields on renting are insufficient to cover the cost of ownership it is natural that the investors will want to dispose of their no-longer-appreciating assets. As there are so many of them, far more than there are new buyers, they will be competing against each other and prices will as a result drop further.

Holders of investment real estate would be well advised to sell as soon as they can at any satisfactory price. Buyers, unless they are purchasing a primary residence, would be wise to give Florida a miss for the time being and look to other markets for their real estate investments.

Where then at the moment appears to be an attractive option? Well, everything points to there being a few years at least left in the steady rises that are the norm in many Eastern European countries, particularly the "New Europe" nations that have just joined or are about to join the European Union, especially Estonia, Turkey, the Czech Republic, Hungary, Slovakia, Slovenia, Bulgaria and Romania. In addition to those, the depressed real estate market in Germany must surely turn again soon - prices there are ridiculously low in comparison to what they were when compared to other Western European nations a decade ago and now that the economy is showing signs of regaining its mighty strength, prices are sure to increase. In the shadow of Germany, Austria will as always follow suit.