In the early years of Florida’s real estate boom, buyers went crazy to see empty homes and lots for sale. Speculators bought apartments under construction, but after 2005 the frenzy died down. Price undercutting, falling sales, and property auctions were as rampant as mortgage defaults and foreclosures.
While the nearby beaches, amusement parks, casinos, and nightclubs help make lucrative sales when it comes to real estate purchases, today’s buyers are more cautious. Also for bargain hunters, the time is right to cash in on a property and eventually retire it once the market heats up. Discounting is prominent when sellers are desperate to get the property off their hands. Massive price cuts in an attempt to attract buyers.
Southwest Florida is witnessing a steady increase in property prices on or near golf courses or even closer to the coast. Conservative architecture, on the other hand, is coming under pressure, and prices elsewhere are falling fast. Brokers involved in selling existing properties compete with those selling new ones and the situation becomes more difficult for the former who have to compete with the improvements and generous incentives of the latter.
While smaller cities in the state of Florida are faring better than underdeveloped cities, they are sparing the brunt of the housing crisis. Florida Keys is an area that is experiencing restrictions on new construction due to a shortage of available land. Naturally, investment in residential real estate has also fallen in response. However, there are proper brokers willing to bet that buyers will have the spending power to invest in a spacious second home between Miami and the Florida Keys.
In the soft market, conditions are such that it is not known what type of properties will be seized and which will remain unsold. Property auctions, while allowing sellers to make some profit on their investment, are highly unpredictable. If the real estate property is at the lower end of the investment hotspot, there is a chance it will sell, as a buyer can either rent it out or build on it. Speculating on a larger property has its risks without knowing where the market may turn.
Seeing this, a question that resonates in many minds is how long will this recession continue? Top notch, most sought after real estate is lining up and by the end of 2008 the number will increase. Although the purchasing power of the wealthy has not been affected, there is a limit to the number of residences in which even millionaires will want to invest in Florida. So where are the buyers?
Some of the key problems with Florida real estate investing stem from high property taxes and skyrocketing home insurance premiums after hurricanes. In the event these are resolved, the Florida real estate market is poised to witness a second boom. Those of us who have been watching the trends very closely, especially in Florida, agree that it is only a matter of time.
