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clearwaterdowntownlikeapizza Great Homes Realty Clearwater Florida newsletterreal estate is like a pizza

and other considerations during a tropical winter day at Clearwater Beach.

By Paola Lombardi

I have to admit it: being a real estate agent in Florida is pretty good, seriously. It is not like being an agent in some remote area, where I would have to find another job.

It is already November. In Clearwater is a wonderful warm tropical day. Fort Harrison Boulevard is peaceful. You know what? I feel like going to the beach. I pick up a good (I thought) magazine and I read that

1) the bubble has burst!
2) real estate is not “hot” any longer
3) the bubble has burst!

I look around the white beach and look at all these new, luxury condos under construction. Didn’t they read the news? I rush home over the new 64 million dollar bridge, I glance at downtown and  its  new landmark SuperPower building, I hear the rolling machinery working on the 9 million dollar facelift of Cleveland Avenue paid by the City. More high-rises will be coming up here as well… isn’t Clearwater real estate really hot?  Did I miss something?  Or can it be that the media are trying to scare people away from real estate investment and back into the stock market? 

Sadly, my crystal ball is in for repairs, so I cannot tell the future – but after getting home and pondering over all this and a good espresso, I feel like making an official statement: real estate is still pretty good in a lot of places.  And a bubble is a bubble. I can even tell you why. 

housing bubble Great Homes Realty Clearwater Florida newsletter

To start, the stock market term “bubble” is used by Wall Street analysts when describing industry crashes. Look at the history, real estate has never experienced anything like a stock market crash. Yes, we always hear about people who made their fortunes investing in the stock market, and we  also hear about other investors who lost their shirts playing the same game. But we hardly ever hear about real-estate investors who go bankrupt, and that’s because it doesn’t happen often. 

When you buy a stock in a company there is no much you can do to make it go up or down. What about real estate? You can be much more causative in real estate. And that’s the beauty of it. You cannot really affect the market at large, but you can do something to the property yourself to make it more marketable; you can contribute to the beautification of a street, an area, or a block.

Most of your real estate investment success can be predicted: real estate is directly connected with the life of a city.  If there are jobs and people are living and moving to that city, they will need a place to live. Look for those cities. If there are attractive lifestyles, city improvements, natural attractions like beaches and warm weather, tourism destinations, major ports, international airports, baby boomers, good hospitals, great universities, thousands of people migrating every day and still affordable prices (hint hint: Tampa Bay), than the market will hold steady and grow. Look for those cities. Real estate, like any other endeavor, has to be approached intelligently.  Retail home prices don’t go into free fall although they may be artificially high. 

So what is all this “bubble trouble”?

Two reasons for the scare (besides the national media reporting it breathlessly):

  1. many real estate markets are going through a correction cycle. 
  2. Mortgage lending has been reckless, creating a housing boom driven by easy credit and not accumulated savings. 

The simple truth is the real estate is cyclical. If you understand this, you cannot lose. You might have to hold a property longer at one point of the cycle, or flip it faster for huge profit at another point. That’s all there is to it. Be financially ready to hold and wait, if necessary. You only lose if you put yourself in a position that you cannot just hold and wait. This is exactly what happened to thousands of investors and home buyers. They purchased homes using exotic mortgages such as adjustable rate and negative amortization mortgages. And they ignored the cyclical nature of real estate. Many more became conditioned to believe that houses were really ATMs machines. Borrowing against home equity to pay for new cars, boats, flat-screen TVs, vacations, home remodels, you name it. Now they cannot afford the jump to the new monthly payment. Add higher insurance rates – add higher property taxes. And now there are some really desperate sellers.

real estate bubble Great Homes Realty Clearwater Florida newsletterThis is the reality of real estate. Luckily behind every dark cloud there is still the sunshine.  In fact like never before the current market offers plenty of opportunity for the educated investor and homebuyer to buy now and get a super deal, before the “cycle” goes around one more time and prices start climbing again.

Soon some sellers will realize they should hold and wait, and many developers will delay projects till the current inventory is absorbed. With over 8000 baby boomers retiring each day and moving to south warmer climates, and new companies bringing hundreds of new jobs every month, the Florida market, particularly Tampa Bay, is poised for success, ready for another era of rapid growth. And there are many others good markets among the 50 states. But you’ll have to search. Or, even better, use a really good agent.

Yes, my beach magazine could have been right if only it didn’t panic: prices have corrected to a more realist level and will do so for a while, with homes appreciating slowly than they did 12 months ago. But remember: it is a Buyer’s market, not a stock market. If we are in an area full of strong fundamentals like we are, buy and hold still, don’t go into panic selling! And soon you will profit from your patience. Now is not a good time to sell, but it is a great time to buy.

After all, Real Estate is like a pizza, even when is bad it’s good!


Copyright (c) 2006-2013. All rights reserved. Reproduction of this article in full or in part is prohibited without the express consent of the author.

Paola Lombardi Real Estate Broker Great Homes Realty Clearwater Florida

Paola Lombardi is the owner/broker of Great Homes Realty, Inc.
Her career includes over three years in politics and 15 years as an accredited journalist.
She can be reached HERE or visit

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