Florida has seen some hard times, with falling property prices and foreclosures. But now it’s at the bottom of the market cycle, is it time to take a second look at the Sunshine State, asks Roderick Easdale
Florida has long been popular as a second-home destination, but with the collapse in house prices, many people’s American Dream looked to be turning into a nightmare. So, should potential housebuyers stay clear of the Sunshine State, or does the current turbulence in the financial and housing markets offer the careful investor a good medium- and long-term opportunity?
James Wyatt of UK-based international agents Barton Wyatt International is in no doubt. “During the last few years, UK buyers have been buying property in ever more unusual places. But these kind of destinations don't tick all the boxes for many - the language might be impossible to master, local traditions are a bit weird, the currency is inherently unstable and so on. So UK buyers looking to buy a retirement or holiday home will go back to basics in the next few years. Spain, France, Italy, Portugal and Florida will all regain the ground they have lost.
“In particular, Florida is set to recover first from its housing woes. The market there started sliding quickly in autumn 2006, so they have a head-start on our market. It follows that Florida is likely to recover before the UK (and anyone else for that matter). There are already signs that the property market is near or at the bottom of the cycle with some tremendous bargains to be had.”
He is not the only one feeling bullish. Figures released recently by the Florida Association of Realtors show that while across the state sales increased 4%, in Miami sales volume rebounded by 39%. Miami estate agent Frank Kowalski explains what is going on: “With Miami prices down 37%, many consumers recognise they are seeing the bottom of the market and are eager to secure the home of their dreams at a price of days gone by.”
David Giles, Director of Property Deals Florida, understands the current attraction of the Miami to property hunters: “A large number of high-quality condos are nearing completion in some of the most chic areas of Miami and, due to a plunging property market, are available for anything up to 40 or 50% below off-plan prices quoted two or three years ago. Miami has, like many cities, undergone several boom-and-bust cycles and now is a very good time to buy.
“Developers simply cannot get finance as the credit crunch continues, so current stock needs to shift and be absorbed into the market. Once this process is over, perhaps in a window of up to two years, recovery and inevitable price rises will prevail once more. If you have finances in place and can act quickly, there are some real bargains out there - and at extremely high quality with exceptional facilities to boot. Miami is a vibrant, cosmopolitan waterfront city and certainly has staying power for the long-term, so if you can get in now, sit tight and ride out a tough time, you'll have a pot of gold for the future."
Another part of the state that has been attracting investor’s attention is Jacksonsville. But here the main attraction is not so much in the potential profits to be made in the rebound from plummeting prices, but the fact that prices in the city have held up more robustly than elsewhere, suggesting this particular market has greater underlying strength than most. When figures from the Florida Association of Realtors revealed median prices for existing properties the year to November 2008 falling by 37% in Miami and 27% across the States, in Jacksonville it was ‘only’ 16%.
At 841 square miles, Jacksonville is the largest city in the continental United States. Its sheer size makes it attractive for buying newly built properties, argues local estate agent Donna Sadowski of Mercedes Homes: “Its size provides for an abundance of new-home communities in just about any setting Florida has to offer. Whether you want to be close to the action Downtown, or live in a rural setting with an easy commute to the office, Jacksonville has the community for you.”
Read the full article in our March 2008 edition.
