You'd never even know it's a problem from what we hear from the Administration or the GE (bailout recipient) talking heads on CNBC and MSNBC (GE owned) or even from what main stream media is writing and talking about. After all, most newspapers are in dire straits, so the last thing they want to do, is write anything that would upset Obama.
Under-Employed - It's not just that unemployment is knocking on the door of 10%, it's also the fact that people are making less when they can find a job. The example in the Sun-Sentinel article was about a man earning a six figure income, who now is grateful to be earning less than $25,000 a year as a receptionist at an insurance company.
Survival - With a bleak picture growing bleaker by the day, jobs are now a matter of survival. But what happens when there are no survival jobs or when $500 a week is not enough to pay health insurance, rent and feed a family? That's when survival becomes a matter for the State and the Federal Government . . . and that means those of us with jobs pay more to help those without jobs . . . which in turn jeopardizes the survival of those on the edge.
11% or 16% or 20%+ - The official unemployment rate in Florida is at 11%, but if you calculate those that have give up looking for a job, the rate jumps to 16% . . . and if you calculate those that have fallen off the unemployment rolls, the number spikes to 20%. Those are Depression level numbers and they are getting worse.
Population Declining - For the first time since records were kept, Florida's population has declined. So my first question is . . . what are we going to do with hundreds of thousands of homes and condos that are still empty? For the past six years, Florida's economy relied on construction, housing and the mortgage game. That's over now, and worse yet, our agricultural industry is taking it on the chin with cheaper product from South of the Border.
Banks Dumping Property - For years I told clients not to buy. I told them to rent. Now I am telling them to buy, when the property is being dumped by a bank that wants out. AND when the bank is selling at below market. AND when it makes sense on cash flow or the buyer is going to live in it. However, in some markets, like Miami condos, I would not be buying until the fourth wave of flippers has been burned . . . and they decide to dump properties at 10 cents on the dollar.
Market by Market - If you are considering buying a home, condo or investment property in Florida, think about why you want it now and what your 3-5 year plans are . . . and beyond. But also pay careful attention to each market, as well as the neighboring market. And above all, look at the competition. You have some big shots in the institutional game that are throwing around OPM (other people's money) simply to make deals and pocket huge commissions. By the way, that is your money . . . pension funds money, state money and remember . . . TARP and TALF have back stopped all these gamblers . . . with your future.
Banks Will Drop Like Coconuts - When banks finally are forced to sell non-performing assets - homes, condos, commercial strips, etc., we will see hundreds of banks fail. Sheil Bair will leave the FDIC in shame and be replaced by another ObamaRamaLama Czar. And you, the taxpayer will have another $5 trillion tacked on to your $12 trillion.
Now What? - If you want a better feel for what we see in different Florida markets, and markets within markets, feel free to call me. Better yet, if you are a serious investor, institutional investor or hedgie, I suggest you get off you butt and fly down for a 2-3 day tour.
Mike's Florida Real Estate Blog - Click Here
Mike's Financial Blog and Hot Links - Click Here
Mike's Reading and Music List
Great Time to Buy Real Estate? - Yes, No, Maybe. I suggest you read this piece I wrote about how to find a Great Buy and what traps to avoid - Click Here
.
Posts
No comments:
Post a Comment