Stop panicking – the market’s great if you look at a five-year span

Dear Editor,

My, my, we have never seen the likes of this market in all of history. Well at least not in South Florida.

Fact is, South Florida is similar to the Arizona/Las Vegas markets, which also had an unprecedented rise in market value, and an unrealistic one at that. The rest of the nation enjoyed hefty property value rises while we here in So-Flo refinanced the profits out of our homes and went on our merry way.

Real Estate 101: Real estate is localized; thus, so are the values placed on property. This is why the same 2500-square foot home is worth millions on the beach, yet you could only hope to fetch $150,000 in other parts of the state.

Somehow, we as professionals are in panic mode. This is simply part of the game and, yes, property values will fall – but not nearly as much as people think. An annual 8 percent rise in property value is fairly average. If we take 2001-2006 as the “Real Estate Boom Years,” then a $100,000 property in 2001 should be worth $158,687 today. You will find that in So-Flo most properties are still 20-40 percent ahead of that pace, meaning that the $100,000 property in my example is probably going for between $190,000-$220,000 today.

I hope this lifts some of your spirits, unless, of course, you are at 90-100 percent loan-to-value on your own home. Then you won’t be moving for awhile.

Noel Padilla
Surreal Properties
Miami

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