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Originally Posted by Packer Fan
Interesting question and nobody knows. A few notes.
1. I have "skin in the game" as I have a house in Fernandina that is strickly a rental in addition to my retirement home. I get calls weekly from Realtors, and the numbers are quite attractive. The fact I am not selling is partially due to what I will state below, but partially because I don't need the money right now, and will in 5 years. Plan on living in it for 2 years before I sell it. I hate taxes.
2. This runup in prices was caused by low interest rates, high demand, and low supply. Basic econ 101. It is NOT a villages phenomenon but is going on everywhere.
3. The Villages issue is compounded by the fact 10,000 baby boomers a day are retiring, but offset by the fact the developer builds a LOT of houses.
4. Low interest rates will rise, slowing buying, but not so much in the villages, since over half the houses are cash transactions.
5. High Demand will not change - Millenials are forming families at a VERY high rate, and in TV, retirements will continue strong for the next 12-15 years or so.
6. Low Supply may change in TV if the developer ramps up, but with low availability of people this may not change much. In the rest of the country, builders are VERY wary of building. They are still at below 70% of pre 2008 levels. They also can't find workers. My opinion is the build rate won't go up much.
Throw in the fact that lenders are NOT making anywhere near the bad loans they made in the housing crisis.
So my prediction is as follows - prices will level off to more normal increases. I predict 5-7% a year in The Villages, 2-3% everywhere else. There will be no crash. Those prognosticating that are basing it on a once in a lifetime crash in 2008. We might see a one year lull in prices where there is no inflation in TV in maybe 2023. Thats the most that will happen. I am keeping that extra house because it rents really well(because many rental owners have sold), and if it goes up even 2-3%, it beats cash and bonds......
TV real estate is also a good diversifier from Stocks and Bonds.
You asked, there it is.
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Good post! I came here from California, where housing swings can be heart stopping. It is usually all about timing and not letting yourself get into a spot where you are forced to sell.
For work, I used to drive from Sacramento to Phoenix from time to time and on one drive, after the 2008 crash, drove through what looked like a wierd Nevada ghost town. Unpaved streets lined with brand new, 3-4,000 sq ft homes. All empty, many with the windows broken out. 5 years later I made the same detour and all those homes had been torn down and signs were up advertising a new housing development - crazy!
One thing I've noticed here in central Fl. The run-up seems to have been much faster and higher in TV than in the surrounding area. We now see designer homes pushing up past 1 million! TV may slow down a bit to let the other areas catch up, but I doubt it will stop or go down