The slow down in the real estate market in Hernando County Florida has left a lot of homes listed on the Hernando County MLS.  Many of these homes are new and on the market due to novice investors and homeowners trying to make a killing in the real estate market, like those fortunate few who made the decision to buy or sell in the booming housing market of 2005 and early 2006.  The homes currently listed will sell or be withdrawn from the market by the owner and with the down turn of new single-family home permits issued in the last quarter of 2006 and early 2007, the market should return to the yearly normal for housing starts and existing homes sales in 2007.  “Normal” would mean any year except 2005.

Now is a real buyers market.  Experienced real estate investors are now returning to the market since the prices and the market are stabilizing and good deals are plentiful.  These investors are replacing the novice investors who in the recent past, were in for short-term quick and easy profit taking.  These novice investors were lured into the market with the promise of making thousands on a new home by the homes completion date with very little out of pocket expense.  It worked in the beginning for savvy investors who were lucky enough to be in on the ground floor and whose investment properties were completed in 2005, but by the time most small investors, the firemen, the teachers, the policemen, you know, the regular people who had saved a little money to invest and learned of the boom in the county, it was too late.  Many invested in properties sight unseen, some from pictures on websites sponsored by builders, some even ventured out to look at the property in which they were investing, but most were not local residents and thus relied on the builder to look out for their interests.  Many of these small investors were able to just walk away before closing, losing only their down payment.   But some builders were able to execute ironclad contracts forcing closings on homes that the purchaser could not afford, and due to the down turn in to market they could not sell the home for the amount of their purchase price.  Their only recourse is to continue to pay the mortgage on the home in hopes that by waiting they will be able to get the price they need just to break even or they can sell short and lose money that most of these investors can ill afford.  An upturn in the market is forecast for the second half of 2007 and those who can hang on until then should be able to recover at least their purchase price.

These situations should make it clear that real estate investing, as with any other type of investing, must be thoroughly investigated and investors, whether savvy pros or novices must know the risks as well as the benefits before they sign on the dotted line.  If profits are expected to be large, then the risks are probably equally as large.  All real estate investors should remember the mantra LOCATION, LOCATION, LOCATION!!!   Also remember that city and county services, such as paved roads, city water, police and fire protection, schools, parks and many other services affect the market value of real estate.  It is important to know how these services apply to the property in which you are investing.