Back HomeIt is no secret that our local real estate markets have recently experienced dramatic and almost unrealistic increases, rebounding from the Great Recession. These extraordinary swings, have some so-called experts predicting another bust or bubble. George Percel, managing broker of Marco’s John R. Wood’s real estate office says it best. In his commentary in response to a local financial advisor’s negative real estate analysis George states that “the financial expert’s perspective of our local real estate market is uninformed and misleading.” It is another attempt to scare real estate buyers to move to the exhilaration of the gambling den of the stock, bond and hedge fund markets.
From the Realtor’s perspective the last boom cycle, which brought about the bust of 2006 was principally engineered by the financial sector and its eagerness, some would say wanton greed, to profit through diabolical schemes designed in New York and Washington. After the dot-com bust, money fled the stock and futures markets to real estate. Traders came to look at real estate as if it was a commodity. Flips were the modus operandi of the day in late 2003 -2005. Money was craving to find a new source of high yield. Thus were born new investment opportunities like REITs, bundled mortgages, and hedge funds. Constantly creating new arrangements to profit from politicians in Washington. These same people fashioned the dot-com disaster.
One big difference in today’s real estate market is that it is driven by demand. Seventy-nine percent of the 196 closed sales on Marco Island during the first two months of this year were purchased with cash, not with mortgages. There are no negative amortizing loans, no 100 percent interest only loans, and the loan originators are not paid to approve a loan to anyone who could fog a mirror, as was the case during the last absurd manipulated boom.
George Percel suggests that this financial advisor’s misguided view is driven by the fact that many of his customers are now investing in the long-term stability of real estate and not the volatility of the financial markets. Over time, real estate continues to provide a substantially higher rate of return than many Wall Street investments. Welcome back market stability. Today’s buyers are people who will be holding and enjoying the properties they purchase. Today’s real estate investor is not looking for the get-rich-quick opportunity.
People love our diamond in the everglades, Marco Island. We are no longer the secluded secret Island on the West coast of Florida. In 2014, Marco Island was named the #1 island in the United States by the world’s largest travel site, TripAdvisor. The site calls Marco Island “the jewel of Florida’s Ten Thousand
Islands” and also ranked Marco #4 in the entire world! This has given our Island worldwide attention and fame. The Europeans traditionally keep us very busy during our slower paced summer and we are expecting them to continue buying our desirable real estate in spite of the stronger dollar.
