REAL ESTATE ON STEROIDS
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Buying Real estate as a whole was so people could buy their dream home. Consmers were looking to plant some roots so they can stay in the home for an average of 5-7 years and then sell and make a reasonable profit. That all changed when our market was injected with steroids that caused an unlimited return on your investment. Over pricing homes is probably hurting more than helping the situation. But now you have to look at the after effects and the "vacuum" we are in now. I used the word steroids because I beleive that this is not a natural thing that is happening "it is synthetic." It can only go so high without some type of advantage.
Over the last 5 years our real estate market here in Florida we have now experienced a major change that has not only effected sellers but it has also effected Realtors. Many Realtors are who received their license are having a hard time staying in the business and if you look back at what happened and what is going on now you will see a few different reasons that I believe made an impact on this "declining market."
First thing you should look at is the obvious..property taxes. If you look at the increase of property taxes you find that it has made it virtually impossible for buyers to purchase a reasonably priced home as the "property tax formulas" are causing higher tax rates on new purchases which makes it unattractive when the buyer finds out what their future rates are going to be based on the estimates they will get when they inquire about their financing choices. The next thing that I look at is the insurance rates. There are not many companies to choose from and most rates seem to be a hardship for current homeowners who did not realize their premiums were going up and really did not get a good answer as to why. "We all need insurance" especially here in Florida but that is still not a valid point as to why the rates just keep rising.
The next in my area is the recent major hurricanes we seem to be experiencing and I think that also has scared off people from moving to areas that might have been effected by all this. The next issue is that for the last few years our market was booming to the point that many people were trying to get on the band wagon and purchase any type of real estate that would have the potential of making a profit and flipping properties too quickly instead of holding them or renting them so that they could build legitimate equity in the property. Buyers were buying anything and it made sense....why? because anyone who had two nickles they could rub together figured that why should they rent and have nothing to show when the banks were lending money and made it easy for consumers to be a part of this "great phenomenon."
What they did not realize now is that many homeowners who are in dire need to sell actually owe more than the market can command for their properties and this is causing a major increase in foreclosures. Rental inventory has a different twist now...I am starting to see more consumers interested in renting properties versus buying and I am not sure exactly why. But realistically it might be better to rent because many consumers are having problems getting financing because banks are not offering enough programs that fit the consumers needs and that is making it a bit more difficult for buyers to close on properties.
I did a recent study so that we might be able to determine what could be the best alternative. Every state has a different outlook and a different market. Here are some figures I came up with. The rental market in Broward County is as follows...8,050 available properties and in Dade county they had a total of 8,516 and Palm Beach county the total was 9,048. As of today ..in Broward County there were 16,733 single family homes on the market on the MLS. There are 23,538 condo/town-homes currently available for a total of 40,271 homes on the market. Dade County does not seem to be any better with 13,782 single family homes and 23,307 condo/town-homes for a total of 37,089. Palm Beach county figures eclipsed at 16,185 for single family homes while figures for condo/town-homes were at 18,933 for a total of 35,118. Now if we look at just the combined totals from just 3 counties you will see a "staggering figure" of 112,478 homes for buyer to look at before making a choice. If you look at all these figures you will see that the totals are very similar.
To me those figures are scary and I wonder how many more there are within the entire state. I figure that if there was not even one additional property added to the market this year it might take a minimum of 2-3 yrs for the majority of these properties to sell and we all know that each there are more properties popping up each day. I am sure that these figures are probably not as accurate as we think they are based on errors on data in the MLS system that was never updated. I think you might see more consumers renting properties. You will also see many home owners either take their properties off the market because they are just adding to the saturation or putting them up for rent.
I do not have a crystal ball and I am not exactly sure what will happen. It might get worse before it gets better.
Neal Bloom-Realtor ® Assoc.-CRS-Weston FL 
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Very nice Neal. very detailed analysis and really gives an accurate picture of what's happening in some markets right now, including mine. Hopefully by 2010 I'll be able to sell a house gain:)