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Follow the Money? December 17, 2007

Posted by shaferfinancial in Uncategorized.
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Crime fighters learned along time ago that when it comes to crime, you need to follow the money to locate the criminals.  In the finance world it is less clear that following the money is a good thing (think the stock market bubble of 2001).  However, taking the market as a whole, watching the money flow is instructive.  Here in Florida, the real estate market has been decreasing for about 18 months.  The latest numbers indicate year to year drops from 8%-18% depending on specific areas.  The media covered this the same as they have all news about real estate lately by using headlines screaming the “fall of the empire” so to speak.  However, what is starting to happen is that bargain hunters have come into the market in big numbers.  In fact, some large money funds have been trolling around Florida offering to take excess inventory off of builders’ hands, at a serious discount of course, but non-the-less looking to be buyers.  Other smaller concerns have started to amass inventory buying at discount.

What this means is that we are probably toward the end of the down real estate cycle.  I refuse to join the bandwagon in predicting the date of the end of this down cycle, but I think it is clear that we going to see the cycle end relatively soon. 

If you are comtemplating buying an investment property, now is the time to start looking.  Remember to keep in mind “cash flow” from any investment.  This is particularly important in real estate.

If you have been good boy’s and girl’s and have kept a good credit score (above 700) financing is readily available for you.

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