Florida Homes and Properties

Archive for March, 2008

It’s three years since Florida’s property market imploded. Foreclosures, surplus inventory and bankrupt developers may have turned the Sunshine State somewhat gloomy, but every cloud has a silver lining. There are incredible deals to be had, and some say the market is beginning to bottom out. Or at least, fall at a more demure pace. Deal-hunters may do well to start their search. Brits and Europeans, who sought holiday homes elsewhere while Florida was in free fall, are now showing renewed interest in their old favourite.

Patricia Tan, international sales director at Prudential Palms Realty in Sarasota, says Brits are beginning to wake up to the bargains on offer. “Many areas in Florida are offering property at between 40% and 60% discount from the prices they sold at the top of the market in 2005. Sterling is also comparatively strong against the dollar, and quite weak against the Euro, making US properties look more favourable to British buyers than European ones.”

Statistics recently released by the Florida Association of Realtors show sales recovering this year. Statewide, the median sale price for an apartment is now ?65,000 – a 32% decrease from 2008 alone. Yet sales of existing homes have increased every month for the last 12 months; foreclosure filings are dropping and existing-home prices have been stabilising.

Florida is a huge state, though, and it’s hard to generalise. In the Cape Coral-Fort Myers stretch of the Gulf Coast, where the median home price has settled just below ?54,400, existing home sales are up a massive 104%. Here, one out of every 88 homes is in a state of foreclosure.

Meanwhile just up the coast, Sarasota is boasting the lowest inventory level in five years and was featured on the Today Show (October 6) as “best priced market in the nation” due to a 30% price fall in the last year, followed by current signs of recovery in price. “Luxury two-bed apartments in a golf and country club are now being offered by a national builder at less than ?90,700,” says Tan of her local market. “Or those who want a detached villa should look at Lakewood Ranch area in Bradenton. A four-bedroom home with pool that sold at around ?423,200 is now under contract for ?181,300.”

In Orlando, property sales are up 49% this year on 2008. Mickey Mouse country has been dealt a huge blow by effect of recession on tourism, resulting in rising unemployment, and 50% of those sales were ‘distressed’. “Most properties for sale right now are almost back to prices of two or three years ago – around half [their pre-crash] price or more,” says Orlando-based realtor Janette Thorne. “So buying in the right location with a good loan to value will offer a good investment to most families.”

Thorne, a Brit who runs Homes of America Realty with her broker husband, Howard, recommends the small communities of Windermere and Dr Phillips as ideal for retirees or families looking for more than just a holiday home. Surrounded by the Butler chain of lakes, they offer beautiful scenery with the attractions of the City of Orlando nearby and beaches less than an hour’s drive. “Windermere is so pretty,” says Thorne. “It’s like going back in time with a small cobblestone street lined with boutiques and caf?s. People tend to think of Orlando as the Disney area and yes it is, but there’s so much more to explore.”

On the Atlantic side in colourful Miami, sales are gathering momentum but there is still plenty of choice. Here, Patricia Tan warns: “There have been problems with buyers purchasing what seems like a really good deal in an apartment building only to find that a huge percentage of the units are in some stage of foreclosure, or other residents are not paying their monthly fees.”

With so many foreclosed properties around, you might think finding that deal of a lifetime would be easy. But repossessed homes often come with hidden baggage. So find an expert agent and legal advisor you can trust, run a title search, and ensure the contract includes contingencies for financing and inspections.

John McLoughlin, a realtor and home inspector with British American Property Solutions notes on their site: “It’s extremely important to understand why and how the property has become a foreclosure in the first place. Make sure you take action with a home inspection to prevent buying someone else’s liability.” Other factors to watch for, he says, include utilities. Many foreclosed homes will have had services cut off due to debt before viewing. This makes it impossible to tell whether water and energy supplies function at all. Then there are pie-in-the-sky promises of high rental returns by unscrupulous agents.

To ensure decent rental returns, know how competitive the local market is. Greater Orlando, at the highly competitive end of the scale, has a glut of empty rental properties at present, despite its tourist draws. In contrast, some Florida beach areas that have limited rental supply can offer better returns. These may also benefit from long-term lets to Canadian and American sun seekers – so called ’snow birds’ – in the winter months.

“Purchase in an area where there’s demand for holiday rentals but supply is restricted by county ordnances,” says Tan. “Or you could look at apartment complexes in the Fort Myers area, where properties are being sold at a fraction of their 2005 prices and there’s still good demand from tenants. My favourite at the moment is a development called MUSA where apartments are priced at up to 70% off their high and are being sold with tenants in place.” Fort Myers is home to Florida’s fastest growing university, creating jobs and therefore tenants. MUSA is also located close to a hospital and other medical facilities whose staff require ongoing housing.

For a long-term investment, the white-sand beaches of the Emerald Coast, Northwest Florida are worth investigating. Florida’s ‘Panhandle’ (named for the shape) should benefit from tourism and a boost to the economy when the new Panama City-Bay County International Airport opens in 2010, in West Bay. In October, the major US domestic airline Southwest announced plans to serve the airport, starting with eight daily flights to four US cities in May 2010. This was a coup for prime landowners in the area, real estate company St Joe, who have reportedly dug deep to secure the airline’s entry. Up until now, most visitors to this hard-to-access region of Florida have come by road.

Wherever you choose to search, deals are abundant. As the New York Times trumpeted earlier this year: in Florida you can now get a condo for less than the price of a new car. That may be so, but no reason to throw caution out the window. If the subprime mess has taught us anything, it’s that fools rush in. So take your time and shop around.