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Wow. But it gets worst, or (better or better for buyers). In some cases the home continued to lose value. In fact the value of a home can be so low that it actually be below the “replacement” value. NOW the value of some homes is LESS that you can build them for ! There are two related issues. Over time zoning regulations (hurricanes and similar) and permitting fees have gone up.  This is besides the cost of inflation.  This rases the new replacement cost.

In addition the older homes were built in some of the best locations. By the gulf, by gulf access rivers on some of the best golf courses or simply they are in the best places in the area. Many newer locations are just not as desirable.

So what does this all mean? Once we return to “normal” there will be new realities. The developments that are going to be build will be higher in price and lower in value than the old double upside down homes. (stronger building codes, higher permitting fees, etc.) Really it just enforces the idea that with real estate it is location, location and location. This coupled with being a contrarian. When everyone is selling you should be buying.

I just helped one of my clients buy a two year old (never lived in) condo for 54 % off the price a flipper paid. This price is so low you cannot possibly build this condo for this price... what a value.

Can I help you find one?