Florida Real Estate Exploding For 15+ More Years?Written by Chris Anderson, PhD
YEEHAW!!!!!! The south will rise again!! Can't you just imagine Dukes of Hazard boys sitting on hood of their car (the General Lee) grinning in front of a For Sale sign in their yard? Well, they should be smiling with prices in south, and especially in Florida. But will this Florida real estate trend continue? That is $100,000 question.
We just recently taught a class at Learning Annex in NYC about investing in Florida real estate. As I was preparing for this class, I was just constantly shocked by some of facts that I was gathering…. and I live in Florida and have done so most of my life. So question becomes "is this just an over blown Florida real estate bubble or is this something that is likely to last?"
Let me give you an example of just how wild Florida real estate has become. Recently, somebody just made a purchase of LARGEST track of land that his been purchased in Florida since 1965. Back in 1965, some crazy dude named Walt Disney purchased 30,000 acres in a relatively unknown place (at time) called Orlando. At time, locales who sold their land went laughing all way to bank about this guy.
This recent Florida real estate purchase, however, was 28,000 acres at a price of $30,000/Acre. No big deal, right? Wrong!!! This land was purchased around YEEHAW Junction, Florida! Ever heard of it? Most people have not. Yeehaw Junction is off of Florida Turnpike in Osceola County. This is one of those places that you could drive through 10 times and still not have noticed it.
If you are like most people, then you would have to assume that big groups are buying these large tracts of land with intent of rapidly developing them and selling them during this crazy real estate market. Nothing could be further from truth. What these groups know is that that population of Florida is expected to increase by 35,000 people, per month, for next 30 years. So month, after month, after month, you have people pouring into state. So if you are one big Florida real estate groups with tons of money in your pockets these days, what would you do? Buy land in cash and sit on it for years --- also referred to as "land banking."
BAD NEWS - WHY THE FINANCIAL NEWS MEDIA CAN COST YOU MONEY!Written by Dr. Scott Brown, Ph.D.
The communication innovations we have around us today like internet, financial newspapers, and special interest television channels focused on investing like CNBC are a high speed pipeline of nonsensical chatter. All these sources of information mean that there is no shortage of media people trying to answer our questions about stock market and specific stocks. You have to remember that news media are constantly competing to survive against other stuff you can watch. If they don’t always sound like they know exactly what is going on then you won’t watch their presentations. If you don’t tune into their show then their ratings go down. If their ratings go down they get fired and their show gets cancelled.
This means that financial journalists are in business of finding great stories and sounding like authorities no matter what. The stock market is a great place for them to dig up news ‘scoops’ to feed to public. They don’t really check their facts very well and sometimes not at all. This means that if some insider wants to feed you a line of bull manure then all they have to do is maintain good connections with financial journalists, sponsor an investment show, or outright buy an investing TV channel like Jack Welsh CEO of GE did when he set up CNBC. What a great way for inside executives to control flow of news information to public then to actually own one of only financial news channels…but not so great for you! These journalists also kick up fire by bringing in so-called ‘experts’ to talk about each side of some topic that real experts would not consider important. This just makes it all more confusing for public to understand what is important when buying or selling a stock. Shows on CNBC like ‘Closing Bell’, ‘Kudlow & Company’, and ‘Mad Money’ do nothing but confuse and misdirect attention of most individual investors in public. Even worse this means that financial news media allows overpriced stocks to be recommended through analysts in inside web that inside executives are dumping on public because they are trying to get out. This actually happened at top of bull market in 1999. For a great historical description of what happened read Maggie Mahar’s book entitled “Bull.”