SHELLY said:An interesting article from Sunday's NY Times. For all those who used to remember what a "home" really used to be (and now what it has become): The Way We Live Now
The pendulum will swing back Shelly. It has to. With the shortage of construction materials and the astronomical cost of building a home, paired with the increase in interest rates to historically reasonable levels (making it more expensive to borrow against the equity) it is going to be too expensive for middle to upper-middle income people to remodel their kitchens or baths or especially build custom homes. I don't think the next cycle is going to look good for remodelers and home builders, just like it is going to be hard for fly-by-night realtors (and I don't mean the true pros) across the country to make a living.
We spent 1996 to 2003 buying, living in and remodeling several older homes, and did very well by taking advantage of tax laws, serving as our own general contractors and learning to make some of our own improvements. When we sold our last "investment" home in 2003 and bought this one (with a 5.5 fixed rate mortgage, thank you) I told my husband that we better plan on sticking where we are because the housing gravy train is over. Yet the value on our current home has continued to rise to a ridiculous level. I just don't see how it's sustainable. The market in Tampa seems to be in balance but the major gains are definitely over. I would not be surprised to see a 10 percent or so correction.
I'm looking forward to the day when nobody wants to buy and fix up older homes, because that's when we'll start doing it again. Meantime, we turned our attentions to 30-A, because three years ago the fundamentals were amazing. They continue to amaze me. I do believe the correction that is occuring is justified and will take awhile to level out, but I have lived in Florida almost all my life, in areas that have been far more overrun, and the beauty of the area -- and believe it or not, the restrictions on development -- is almost unmatched. We love Sanibel/Captiva too but there is no way we could afford it when we bought along 30-A. And unless you own gulf front along the narrow strip of Captiva, is just not as beautiful.
Combine that with the higher elevations, and 30-A absolutely comes out a winner. My dad the architect, who used to do a lot of work near the beach around here, drilled it into my head from a very early age that we must be respectful of hurricanes when building. Imagine my surprise when, on my first visit to 30-A, I learned that most places were not required to have flood insurance because of the high elevation. Sold! Of COURSE we bought flood insurance, but I'd rather be 30 feet up than five. And while I know many locals are upset with all the development along 30-A, it sure as heck doesn't compare to the raping of the beaches that has happened along other coastal areas in Florida. 30-A is paradise, plain and simple.