Almost 20% of Florida Homes Remain Vacant

23 Mar
Real Estate is always a great investment

According to a CNN report, nearly 20% of Florida homes are vacant. That’s a scary thought. In 2006, it wasn’t unusual for a person in his late 20’s/early 30’s to own a primary residence, a rental property, and a flipping property. With the mortgage interest deduction on primary and secondary homes, annual growth in the 10-15% rate, and banks practically giving money away (just so they could collect transaction fees), people were in a buying frenzy. When you have a large State like Florida, which still has a considerable amount of room for growth, the construction companies saw an opportunity to build while the buyers continued to view housing as a guaranteed investment.

 If we allowed market forces to rule, shady business practices and poor investing practices would have cancelled each other out. Business efficiency and personal responsibility would have limited the bubble and still resulted in great investment opportunities. However, Floridians and personal responsibility don’t exactly go hand in hand. I can’t really blame them… many were able to cash out or use home equity loans as a credit card for cars, boats, and other luxury items. On top of that, the Federal government kept on insisting that people making less than $40k/yr should be able to get loans on $400,000 homes. Local government kept on approving housing developments and mega condos to increase the supply for retirees, flippers, and foreign investors. The State, county, and local governments were relying on additional property tax revenue to fund roads, schools, and other pet projects.

Government intervention and policies to get poorer communities of color into homes backfired. This short-sighted politically correct approach was not the right thing to do. How can you take a segment of the population that has shown little ability to operate without being a ward of the government to purchase a home they can’t afford AND continue to pay the bills (while continuing to subsidize the cost AND providing other government assistance like medicare and medicaid)? Granted, it is Florida after all. The faux libertarians control the debate and had a certain interest in supporting their corrupt politicians (both Democrat and Republican). It is certainly a vice to be an anti-business liberal, but just as bad, the faux pro-business Floridians did whatever they could to manipulate the Real Estate market. To this day, County commissions in Florida can still be convinced to approve developments and sink millions (tax dollars) into infrastructure upgrades. Worst of all, they bought into the myth that unlimited demand would allow local governments to reap the benefit of an unlimited supply of  homes (and their property taxes). We know where that leads… Local budget deficit – State bailout – State budget deficit – Federal bailout – Federal deficit – Total Collapse…

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One Response to “Almost 20% of Florida Homes Remain Vacant”

  1. Home April 7, 2011 at 09:30 #

    It is a readable and valuable article. It has been very helpful in understanding of diverse things. I’m sure many people will agree with me.

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