Southwest Florida Real Estate Investment Association was established
in 11/2003. The SWFL REIA has been on the cutting edge of data gathering
and analysis of the housing downtrend and foreclosures. Our Analysis
and Trend reporting has made the SWFL REIA an expert source for the
media and set standards by which the housing market is analyzed and
trended within the industry.
members are Real Estate Investors, Real Estate Agents, Title Agents,
Insurance Agents, Landlords, Property Managers, Wholesalers, Rehabbers,
Note Buyers, Hedge Fund Managers, Bulk Asset Purchasers, Foreclosure and
Probate Investors. Come and network!
Our Motto: Knowledge withheld is Knowledge wasted.
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October 2013 Lee County Foreclosure Backlog Report
October 2013 Lee County Florida Foreclosure Trend Report
I had a great time doing this show. The let me tell the story of what created this debacle. It is a perspective that you need to hear if you are part of or Interested in the SWFL REAL Estate Market
This aired the week of 01/16/11.
About Viewpoints: Viewpoints is broadcast weekly on over 360 radio stations around
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stay tuned. You can find us on the web at http://www.mediatracks.com.
Update of the Lee County Market, 1/1/10 thru 4/30/10
Please share any thoughts, corrections, recommendations and rants to email@example.com
This is the first positive news our market has had in a while. It was nice to be part of this article. I think it accurately portrayed our market metrics.
There is a link on the page to listen to the bit that aired this AM. The buyer interviewed bought thru Cristina, my wife. there are lot more of him coming. She has already sold a house to a referral from him. I was there when the reporter interviewed Matt Z in his home. I think the reporter recognized the value our market has to offer after that.
It funny how some of the people interviewed, threw our market under the bus a few months ago and said we are 2 years out, well now we are close to bottoming. I hope the change in position was a result of research. I have to reconsider what I think I know, every time I open a spread sheet with market data in it. Then again, if we all had the same answers how would anyone learn?
A lot of people heralded the market of 2004 thru 2006. It was an a easy sell... greed and gullibility. In reality we were creating an over leveraged monster. Now we are buying and selling affordable homes primarily to cash buyers. For some reason, we bastardize that market. If anyone can put logic into the actions that relate to the madness of crowds, I will buy the coffee to hear it.
In the end, only trust what you can prove, that you can use to better you and those around you. Make what you can of today that provides for a better tomorrow. Make sure you have a little fun too.
The document to the right is a comparison of foreclosure numbers by area’s of Cape Coral. While the numbers from the yahoo map, do not match the SWFL REIA’s internal database. It is close enough to derive some trends. Numbers and data being what they are, they will never be perfect. The yahoo numbers are in the ballpark.
We study these trends to add value to the membership.
This subject begs to be studied in depth………
Please share any and all, thoughts, suggestions and criticisms to firstname.lastname@example.org
First things first, most days I get some sort of prediction from someone about the state of the housing market. I have found that most of these are either driven by an agenda or by emotion. There is too much speculation as to what tomorrow may bring, when today is here, right in front of you. We usually will not know what happened today until tomorrow. So why even focus on tomorrow, when you have today! Use what you learned yesterday.
It is often a waste of time and resources to speculate what will happen tomorrow in any sort of detail. With an empirical base of facts and historical references you can deduce a range of outcomes that tomorrow may bring. If are using all of those ranges in your business model, then good for you. If you are using one of those ranges, you are playing roulette. If the range of outcomes is based on anything but empirical facts, then you are playing “Russian” roulette.
What is empirical? In economics, "empirical" generally refers to statistical or econometric analysis of numeric data. Other forms of observation-based hypothesis testing are not considered to be "empirics."
The use of the adjective empirical, especially in scientific studies using statistics, may also indicate that a particular correlation between two parameters has been found, but that so far, no theory for the mechanism of the connection is known.
Below are some thoughts based upon empirical evidence.
Plan on, a good portion of the mortgage transactions, (2004 thru 2006) to default. We (SWFL) are at 2003 pricing. So people who bought houses in that time frame……
Most people buy houses, not HOMES. A HOME is the house you can and will pay for as long as it does not break you.
People who live in houses well..........
It really boils down to; do you make your decisions from emotions’ or logic? For 95 percent of the world it’s all emotions.
Foreclosure has become quite acceptable. You will be amazed in the coming years (today even) what a bankable loan is. The current generation of bankers gave away the income stream for fee’s years ago. We will be seeing these cycles until that business model changes. Would you rather have 4 percent of the loan balance or the interest? Making money on the interest spread of a portfolio is what banking was all about, not fees.
This is the aftermath of a mania; we have been doing this since recorded history was born.
Watch and learn, so the next one does not bite you. That is about all you really can do. We as people have a predisposition go from greed to fear and vice versa. The speed of the world and pop culture are amplifying these tendencies.
Welcome to the aftermath of Fractional Banking on Steroids, AKA CDO, SIV, etc. Pick your financial poison. We really do not know how bad it is because the Fed quit publishing M3 in 2005. It’s not pertinent anymore, LOL.
What is M3?
The different types of money are typically classified as Ms. the number of Ms usually range from M0 (narrowest) to M3 (broadest) but which Ms are actually used depends on the system. The typical layout for each of the Ms is as follows:
M0: Physical currency. A measure of the money supply which combines any liquid or cash assets held within a central bank and the amount of physical currency circulating in the economy. M0 is the most liquid measure of the money supply. It only includes cash or assets that could quickly be converted into currency.
M1: M0 + demand deposits, which are checking accounts. This is used as a measurement for economists trying to quantify the amount of money in circulation. The M1 is a very liquid measure of the money supply, as it contains cash and assets that can quickly be converted to currency.
M2: M1 + time deposits, savings deposits, and non-institutional money-market funds. M2 is a broader classification of money than M1. Economists use M2 when looking to quantify the amount of money in circulation and trying to explain different economic monetary conditions. M2 is a key economic indicator used to forecast inflation.
M3: M2 + large time deposits, institutional money-market funds, short-term repurchase agreements, along with other larger liquid assets. This is the broadest measure of money and is used by economists to estimate the entire supply of money within an economy.
In the end, the worse it gets everywhere else, the better it should become here as the “Refugee Retirees” flee again to our Paradise. Go back thru history, 1991 thru 1993 was a time that lots of people moved to SWFL.
So what is going on today?
Here is a snapshot of Cape Coral, July 1-23rd 2007 versus 2008, SFR home sales
·Money in motion 28,968,595
·Average sale 284,006
·Median sale 239,500
·Money in motion 41,136,410
·Average Sale 181,218
·Median sale 142,300
That is a 222 percent increase in the number of SFR Home Sales. The Average sale price is down. That means Cape Coral is affordable again. The money in motion is up. Money in motion defines the market. Title companies, the Government and Insurance companies obtain revenue by money in motion.
It certainly looks like you could make some money in Cape Coral.
FYI, in a declining market, you should strive to do business below the average price and price per SQFT. Instead of predicting what tomorrows market may be bring…. Yesterday data shows the way.
This is encouraging. The world empirically is never as good or as bad as it seems on the streets and in the media. The world is either cyclical by design or maybe the experiment just works better that way.
Any input, corrections and suggestions is greatly appreciated.
Randomness and Real Estate
Randomness and Real Estate
Many of us fail to realize how random Real Estate is. Real Estate is a random event industry. Much like the stock market, things and trends just emerge from nowhere. To historical students most of these events are part of age old cycles. The length and breadth always change. The cycles for the most part do not.
I have been saying for a while. The next part of this cycle for real estate is the stock market and the banking system bending/breaking/snapping. There are many historical references to this, look at the downturns in 1929, 1974, 1979, 1983. We are somewhere in that ballpark. Once that happens, there is only one place for the capital to go... Real Estate!
Things just happen! A lot of success in this industry is being in the right place at the right time. In regards to that, you have to be out playing. It’s hard to get lucky on the sidelines. To that extent, are you doing the same things you did before? If one is not happy with the results. Then one should deduce it’s time to try something else. I am constantly looking at trends within the market. Here is what to do when a new trend is found, if the trend looks viable, with the assumption of a reasonable entry and chance of success. You go for it. I am doing that as I am writing this. This downturn has/is eating much bigger fish than me. I think my system works!
So…. What does all this mean? Get out! Do something! Meet someone you have not met before. Try something new. What worked in 2002 thru 2006 is a moot point now. You have to see what works today.
Understanding markets- and how to play in them
Two types of market Value based, cash flow very little or no appreciation—Gaussian markets
oMedian income versus median home price
oTend to not be a destination location
oDue to socio-nomic factors they tend to be swayed by national events, while the numbers tend not to show, they are fully impacted
Peak and Valley type markets- Measured by fractals
oMedian Income does not balance
oDestination Locations- people want to be there, based upon social moods
oThe center of Socio-economic events, both good and bad
You can buy and sell in both markets. The flat markets will not give as big rewards, but the pitfalls are less as well. Flat markets make good rental markets
A Basic Understanding of Real Estate Cycles
A Basic Understanding of Real Estate Cycles
I am sharing my own research which, I use for my own selfish reasons
I do not hold my self out as an expert. I am just a Real Estate guy, trying to feed his children!
In support of the statement above, I will readily change any and all beliefs, I have, when presented with facts, that would prompt me!
Civilization rests on change. This change is cyclical in origin. A rhythmic series of extreme changes constitutes a cycle. When a cycle has completed, another cycle is started. The rhythm of the new cycle will be the same as that of the previous cycle. Although the extent or duration may vary
You have the…
—Then the Buyer’s Boom
Busts do not follow Booms
Booms follow Busts
The Buyers Side
This is driven in the beginning by fear.
The beginning of the buyer’s side will be quite hazy, to all involved
As sales volume mounts and sales prices erode, it turns to despair, then to capitulation on the seller’s side
On the sellers side
The primary driver is greed and optimism
This is an easy market
This side always has a sharp quick upward value trend
This will eclipse the previous value trend, as a sum
If you have a ready supply of cheap money
A “Mania “may form.
What is a Mania?
An excessive or unreasonable enthusiasm
—Mississippi Company, in the 1700’s
—The South Sea Company, 1700’s
—Wall Street Crash of 1929
—Florida land boom of the 1920s
—Japanese asset price bubble
—The Dutch Tulip Mania’s
You have to understand that sales volume on the sellers side drives prices uponce Inventory is eroding
On the buyers side it drives them down.
The Market is a pendulum that forever swings between unsustainable optimism
Which makes Real estate more expensive
And Unjustified Pessimism
Which causes Real Estate to be Cheaper
The Intelligent Investor is a Realist. Who buys from Pessimists and sells to optimists
Boom times are a time for Courage
Bust Times are a time for Discipline
By doing this you will not be swayed by the swings in the Market
In the End….
How you behave is much more important than how the Markets Behave