2017 Florida Housing Market

[Chris M.]

is now a good time to buy?  I have a gut feeling that I should wait until housing prices go down.

[Christopher Phillips]

@Chris M.

It's always a good time to buy. Strategy might change, but there is always an opportunity.

Take Clearwater for example. Unemployment is down. Median sales price and volume are up. Rents are up.

The longer you wait to buy, the more you can expect interest rates to rise.

Real estate tends to cycle over 18 year periods. We're bouncing off the 2007-2009 bottom. All things being equal, no reason to expect a drop anytime soon.  Obviously, there are corrections within a cycle (and scandals), but the overall trend is up.

On top of that, buy and hold strategies have a 10,20, to 30 year horizon. Holding out for $5,000 to $10,000 isn't a sound investment strategy. Assuming steady local economy, you wouldn't expect rents to suddenly go down. A $10,000 change in sales price is only $55-$60 per month difference on a traditional mortgage at today's rates. 

So, the question isn't is it a good time to buy... the question is -- what's the right strategy? 

If you run the numbers and the rental property is giving you positive cash on cash return, that's a good prospect. However, if we're at the top of the market, it might make it difficult to find cash flow positive properties until rents increase.

42% of the people in Clearwater rent. Slightly above Florida and National averages. So, one can conclude that there is a demand for places to rent. So, it just goes back to the analysis to find positive cash flow.

Same goes for flipping. Once all the bargains are cleared from the market, it might not be as easy to make profits on future flips. But it doesn't mean you don't flip. Just means you have to search harder for discounted properties. There are a lot of home owners still under water on the mortgages since the heady home buying days of 2005-2007. So, eventually, the bargains will come.

So, is it a good time to buy? It depends on your strategy and the analysis.