Epic Real Estate Investing - Crisis Alert: Florida's Housing Inventory Soars by 411% – What’s Next? | 1308

Episode Date: June 27, 2024

Ready to uncover the truth about Florida's real estate market? In this episode, we dive deep into the recent surge in housing inventory and address the looming fears of a 2008-style market crash. But hold on—before you hit the panic button, we're here to show you why Florida stands strong amid the uncertainty. Explore how Florida's robust and diverse economy, coupled with strong migration trends and ongoing infrastructure developments, make it a hotbed for long-term investments. We’ll also compare Florida’s growth trajectory with California’s, revealing why the Sunshine State is shining brighter for investors. Join us as we cut through the fear-driven noise and focus on the real fundamentals that make Florida's real estate market a promising bet. Don't miss this episode if you're looking to make informed decisions and seize the investment opportunities waiting in Florida. Hit play now and gain a balanced, insightful perspective on one of the most dynamic real estate markets today  P.S. Whenever you're ready to go deeper and further with your real estate investing, looking into my partner program to help you get your first deal might be the move... take the first step here for free 👉 https://epicearnwhileyoulearn.com/ Sponsor: Baselane - Banking Built for Real Estate Investors Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terio Media. Hey, strap in. It's time for the epic real estate investing show. We'll be your guides as we navigate the housing market, the landscape of creative financing strategies, and everything you need to swap that office chair for a beach chair. If you're looking for some one-on-one help, meet us at rei-aise.com. Let's go, let's go, let's go, let's go, let's go, let's go.

Let's go. All right, you've probably heard the alarming news that there's, big trouble in Florida real estate. The state, it's experiencing a massive market shock with a massive sell-offs stirring up fear of a 2008 repeat. You know, in the last two years, Florida's housing inventory, it's surged 236%. And some Florida markets like Tampa, inventory is up 312%. The Cape Coral area is at 400% and Northportch. It's up 411% in the last 24 months. When inventory soars like that prices are expected to naturally come crashing down. I mean, it has to, right? Because real estate, it goes in cycles. Some reports were predicting 30 to 40 percent of price decreases,

creating fear and uncertainty among homeowners and investors alike as sellers, they're slashing their list prices. And the days on market have doubled statewide more than in some areas are more than doubled for sale signs that are popping up all over the place. And all evidence of a drastic shift in the market. And so the dream of owning property for homeowners and investors in Florida seems to be a nightmare becoming all too true. I mean, imagine buying a home in Florida today only to see the value plummet just in the coming months.

And picture the anxiety of watching your investment shrink as prices continue to decline. This is something you want to stay far, far away from. I mean, think about the stress of trying to sell your price. in a market flooded with listings and competing against builders and other desperate sellers that are all slashing their prices. The situation, it feels kind of dire, and the stakes, they're incredibly high for those in the middle of it. The fear of another 2008-style collapse looms large, making you question whether now is

the right time to buy or invest in Florida real estate, or, gosh, any real estate at all right now. The YouTube experts, they're all citing history that, price. prices always drop when following unsustainable trends and that the spiking inventory, this signals that a major downturn is inevitable, like in 2008. Well, if that were always true, then incredible opportunities are on the horizon as well. I mean, do people really want to wait for prices to bounce back up before they buy their list? That would be ridiculous. I mean, how many times the people have to go through these cycles before they learn that,

prices always fall, they always return, higher inventory shifts power to the buyer, giving the buyer more choices, choices for the best properties, flexibility in negotiating with the sellers of the owners of these best properties, and the current market conditions are showing this, as sellers are slashing their list prices. But contrary to popular belief, Florida's appeal, it hasn't dwindled. The demand for Florida real estate remains strong. people are still flocking to the state or has an appealing climate, tax advantages, it's got the job opportunities, it's got the freedom lifestyle of its political environment. That all makes the state a place where most people want to live, and they're moving there.

Remote work is here to stay, and Florida has been and continues to be the prime beneficiary of that trend. And this is really important because little estate just flat out doesn't work without people. and one extreme advantage as a real estate for a real estate investor is knowing where the people are going. You want to follow them. Here, look at this. Based on U-Haul's growth index page, Florida is the number two growing state in the country. And this is where all of the U-Haul vehicles are being dropped off. And even if you don't have access to this chart, here's an undeniable clue.

Here, watch this. Anyone can do this. As of right now, if I were to rent a moving truck in Orlando, to drive to Los Angeles. It's going to run me $2,484. Now, if I were going to go in the opposite direction, the exact same distance from Los Angeles to Orlando, that same truck would cost me $3,158. That's a $700 difference. So is that because gas is cheaper going from east to west? No, it's because they've got more trucks in Florida than California, and they need to get those trucks back to California so more people can leave that state. So they incentivize that behavior by lowering prices

in one of the directions. So when discounted real estate meets this type of long-term demand, what you have here is a serious wealth-building opportunity in front of you. But let's look more at California. And you can compare it to Florida so you can make an educated decision about whether or where your own investment dollars should go. California's housing inventory right now is a exactly where it was two years ago. The medium price is exactly where it was two years ago. And the migration is the lowest in the country. It's ranked dead last.

So more people are leaving California than a riding, making it a very questionable investment location. And this is reflected in builder confidence as building permits have steadily declined there in the last two years. I mean, even builders with all of their resources, all of the research that they have available to them, they're putting the pause on building more properties in California because they too know that real estate, it doesn't work without people on. Now, Florida, despite the spiking inventory, the median list price is down only 5.26%, meaning that sellers, they can't just sell their house for whatever they wanted like they used to. But they shouldn't be too sad.

You shouldn't feel too sorry for them because the median sales price, what they're actually selling for, that's up 3.3% in that same time period. Sales prices don't rise when a market is in trouble. And here's the primary reason. Migration to Florida is the second highest in the country, of which should signal to savvy investors that this is a place to really consider buying more. The builders certainly believe that's the case because that's where they're all of their money, and their attention is going, because look at this, they're pulling more permits. But still, what about the rising inventory right now? Well, if you look at what was happening just two years ago,

builder confidence was really high in Florida. They could see the future in that market. And so as reflected by the number of building permits that they were pulling, you can see it right here. So there's typically a two-year lag before those new properties hit the market. And it's these houses that were in the planning stage, that are now hitting the market. Thus the surge in inventory that we're all seeing.

But permits, you can see here, they slowed down for a moment. So we'll likely not see much more inventory, maybe a little bit, but not much more inventory in Florida until March of next year. So we've kind of got what we've got right now. And logic would tell you that we're kind of close to the bottom of the market in Florida right now. Further, Florida's economic strength is evident and its diverse economy. It's industries such as tourism, agriculture, aerospace, and technology. It all contributes to a very robust economic foundation.

For example, Orlando is not just a tourism hub. It's also a growing tech and innovation center. The state's GDP grew by 5.9% in 2021, outpacing the national average, and it's showing zero signs of slowing down in 2024. So ignoring these factors means overlooking the underlying. strengths that make Florida's real estate market so robust and so strong. The continuous influx of new residents and businesses, it sustains the demand and it supports the property values. By investing on real economic fundamentals, as opposed to YouTubers fear-mongering drama

that they're all battling for clicks, investors can make informed decisions, recognizing that Florida's real estate market, it's far from collapsing. Instead, it offers a very stable an attractive environment for long-term investment. I mean, one more could you possibly ask for from a real estate market? Florida's real estate market, it's sort of falling. It's not collapsing. Now, there are interest rates to consider, but still, all indicators suggest that they're going to be where they are for a while.

Maybe there's going to be one more reduction here before years end, and then there's the wild card that's in play, the election. But anything that would happen with these two, variables are likely, likely to be temporary. In the long time is the growing number of people needing housing in Florida and Florida doing everything that they can to create a very hospitable environment and economy so that people want to continue to come and they want to stay and they want to live. The assertion that Florida's housing market is collapsing is relative. The one market's collapse is another market's minor blitz. High inventory levels may signal

in-market correction, but historically, such corrections are followed by periods of robust growth. For instance, after the 2008 crash, Florida's real estate market, it repounded significantly, with home prices rising steadily from 2012 onwards. But let's just imagine the worst-case scenario of the 2008 crash. Let's say you purchased a Florida property at the peak of its sales price, meaning you paid more for that property than anyone would have paid the day after, which was actually in May 2006. And then you rode the market all the way down, and you just waited until today. If you did that, you'd still be up 65%.

You'd have only lost if you had sold. So this cyclical pattern, it indicates that current market conditions present a gold-ed long-term opportunity for investors, even if you mess it up and you get it totally wrong. I mean, if you're the type of person that subscribes to the idea that the market always crashes, and that's why it will crash again, you must also subscribe to the idea that it never crashes to the previous low, and then you also have to subscribe to the fact that the market always recovers,

and it always exceeds the previous high. It's bad logic to say it always goes down and only sometimes goes up. There's zero evidence of that. That would be actually a false statement if you said it. Real estate investors, they focus on long-term value rather than short-term fluctuations. You know, Warren Buffett, he said that his favorite holding time is forever and that the best investing is boring investing. And so ignoring this means missing out on building real wealth in a proven way, robbing yourself of your own cross-burst financial future, diminishing the legacy that you create. and the legacy that you leave for your kids. The savvy investor sees high inventory not as a red flag,

but as a green light signaling the chance to buy and hold for long-term gains. And these experts that continue to compare today's real estate market to the 2008 crash are really misleading you by overlooking crucial differences. You see, the 2008 financial crisis was largely driven by subprime mortgages and poor lending practices, and to a lesser degree, over bill date. Well, today, lending standards are much stricter with more rigorous credit requirements and higher down payment demands, and this creates a more stable housing market foundation. For instance, the Mortgage Bankers Association reported that the average credit score for mortgage

borrowers in 2021 was 786. That's significantly higher than the pre-2008 levels. And this shift, it indicates that current homeowners are more financially secure, of which reduces the risk, virtually eliminates the risk altogether of widespread defaults that really kind of characterize the whole 2008 crash. Furthermore, Florida's real estate market benefits from continuous infrastructure development. Projects like the bright line high-speed rail expansion and the improvements to major highways, that enhances all the connectivity and the accessibility, boosting property values and economic. boosting property values and economic activity. You see, such investments, they ensure long-term growth and stability in the region. Metaphorically speaking, investing in Florida real estate today, and I don't even live in Florida,

but it's like I can see it very clearly. It's like planting a tree in extremely fertile soil. It might not yield fruit immediately, but with time and patience, it will grow. It has to. Providing shade and sustenance for years to come. Today's market is fundamentally different from 2008 due to stronger lending standards, continuous infrastructure development, and a resilient economy. But this time around, we've got significantly more people at home buying age than we did in 2008. You know, for a market to crash, you need more houses than people.

And right now, we got the opposite. The country is playing a massive game of catch-up when it comes to building houses. By focusing on these aspects, investors can confidently navigate the current market, secure in the knowledge that they are building a stable and prosperous future. So don't be swayed by fear. Embrace the opportunities that come with today's market conditions. Subscribe and we'll grow. We'll build our wealth together. Stop spending countless hours on busy work and focus on growing your real estate business

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