Saturday June 25, 2005
Is the real-estate market in Miami a bubble? Maybe not in South Florida—an increasingly hedonistic population will continue to find most of the US too cold, and there’s only so many places they can move to. Some argue that renting is a better deal right now, but in the long term this is bound to be untrue for people who buy houses fair and square.
Interest-only mortgages, however, are becoming more and more popular. They are great if you’re planning on flipping the property in about five years, and if property values keep rising as they have, and if too many people don’t buy property with them at the same time.
Now, say all the condos being built right now are finished in a year or two and sell out just barely, saturating the market. A couple of years later, all these zero-interesters try to sell their property (and they need to, because their mortgage payments are about to rise drastically). Suddenly it’s a buyers market, and these people get screwed. Maybe.
The best sign that the housing boom is about to change in some very real way, though, is CondoFlip. Here is a guy who wants to get rich not by buying and selling real-estate, but off the people doing the buying and selling, often sight unseen. That, friends, is proof positive that a lot of clueless people are in the market, ripe for the pickin’.comments powered by Disqus