We buy rental properties in Florida
If you carefully study the numbers, you can expect only one logical conclusion – real estate prices in the United States will increase significantly, which is true not only in Florida but throughout much of the country.
You can make good money in residential real estate. Several studies show that residential real estate produces long-term returns like the stock market, with significantly lower volatility when accounting for rental payments.
Many in America fear the real estate market; the last crisis has left severe scars. People lost their homes and entire areas that were previously vibrant. Property prices have fallen significantly for the first time in many decades.
Prices fell for six years in a row, from 2006 to 2011. And this has discouraged many from even thinking about investing in real estate. Because of this intense fear, today’s opportunity is still beautiful, which is hard to believe after several years of growth. But it’s true.
Since 2011, we have seen a real boom. Recently, home prices in the United States reached historic highs.
Excellent growth. It was almost as powerful as the boom in the 2000s, which ended with a significant price drop. This fact scares investors. They think they still need to catch everything and that prices will stay the same. But believe me, they can.
Despite the massive boom in the real estate market, simple supply and demand figures indicate that prices will continue to rise significantly.
Demand for real estate is high, and supply is low. Therefore, prices must rise. It’s hard to believe, but it’s true. Despite rising prices, supply on the market still needs to be improved. The main reason is that construction companies needed to build more weren’t new houses.
The construction industry experienced incredible growth during the boom in the 2000s. But what then? After the crisis, the market had a lot of excess supply. Construction companies stopped building, and many went bankrupt. Construction volumes have fallen by 75% or more in just a few years. And, as we can see in the chart above, they still have not returned to “normal” levels.
The same thing happened in Florida but in a more dramatic way. New construction fell by 90%.
Even today, years after the market bottom, construction rates have not reached average levels. As a result, there is a need for more homes for sale on the market.
The following graph shows this from an interesting perspective. It shows the “sales life” of new homes—how long it takes to sell the current supply at the current sales rate. This parameter has dropped significantly in recent years.
At the end of 2010, selling all the available supplies took about a year. There was a tremendous amount of supply and almost no demand. Today, the situation.
The offer has ended. Construction companies need help to cope with demand. Therefore, this year’s ” sales period reached a minimum of more than ten years. Today, it would take 4.2 months to sell all available homes.
Brings us to a simple question in basic economics. What happens when demand is high and supply is low? The price is going up.
There has been a new boom in the US real estate market for several years, and prices have increased significantly. But it’s important to remember that just because prices have gone up doesn’t mean they can’t go up some more. Simple economic reality tells us that prices are likely to rise even further.
Now is the right time to buy a home in America. But if this option is not for you, we have an alternative in the stock market to take advantage of this opportunity.