Real estate investing in Florida

Florida is set to be one of the bargain hotspots of 2010 for real estate investors with some properties selling for as little as $47 a square foot, according to a new report.

As the global recession eases and the recovery begins, experts are forecasting that investor confidence will flow back into the US real estate market and national house price declines are predicted to improve by the middle of the year.

New home sales should post an increase of around 20% from the very low levels seen in 2009, according to the report from Winkworth International.

It points out that few real estate markets have suffered more than Florida where oversupply has been a major factor in driving down prices. Foreclosures and a glut of unsold condominiums have especially contributed to slowing down the Florida housing market.

Florida’s loss can be a UK buyer’s gain, according to Charles Peerless, director, Winkworth International. ‘With low prices on a wide range of top quality luxury homes and condominiums in world class developments, combined with a favorable exchange rate and low interest rates, buyers who seek sun, golf and wide ranging lifestyle attractions can now buy a home here for about half what they would have paid in 2005,’ he explained.

Sean Snaith, economics professor and forecaster for the University of Central Florida in Orlando, agrees. ‘For international buyers, 2010 will be a great time to buy in Florida. The imbalance of supply and demand puts the buyer in the driving seat. Large inventory, pricing power and the continuing weakness of the dollar when compared to other currencies mean awesome deals in the housing sector,’ he said.

‘All this means that there has seldom been a better time to get into the Florida property market. According to most local experts, prices have nowhere to go but up and a home in Florida bought at today’s bargain prices should prove to be a laudable investment five years from now,’ added Peerless.

New home construction in Florida suffered more than expected. In the second quarter of 2009 housing starts fell to an annual rate of 35,352, an 88% decline in starts from peak to trough.

There are some pockets of Florida that have been affected more substantially by the downturn than others which now offer excellent opportunities to investors in high quality new developments, Peerless points out. In Orlando, buyers can pay $140 per square foot down from $250 in 2006 and in Sarasota prices that were $350 per square foot are now as low as $47.

He added that this region of Florida enjoys relatively uncongested areas, is sophisticated, less crowded than the east coast. Sarasota was recently highlighted on NBC as the top place in the whole of the US to buy a home and is known for its fine restaurants, beaches, theaters, arts, shops and lifestyle. Prices are at 2002/2003 levels and there has been little or no new construction in the area for four years, so high quality inventory is being snapped up.

The report predicts that central Florida with attractions like Universal Studios and Disney World should experience a quicker comeback than most other areas in Florida. While south Florida is described as the place to buy a condominium. There are sales being made well below construction cost. The major reason for the decline in the Miami condo market is the difficulty in getting finance which tends to be more available on houses. As such, condos offer an excellent opportunity for cash buyers, the report says.

Prices are discounted in North West Florida and are around 2005 levels. ‘Buyers get so much more for their money in Florida than in Europe. Spacious high specification properties, spectacular golf communities, high future capital growth predicted, excellent transportation and, of course, the ever popular Florida lifestyle including sunshine, beaches, golf, cruises, theme parks, shopping and dining,’ it concludes.

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Public opinion on matters of national importance

An public opinion poll that needs to be paid attention to. 

Sixty-one percent of Americans polled would rather see taxes for the wealthy increased as a first step to tackling the deficit, the poll showed.

The next most popular way — chosen by 20 percent — was to cut defense spending.

Four percent would cut the Medicare government health insurance program for the elderly, and 3 percent would cut the Social Security retirement program, the poll showed.

Asked which part of the world they would fix first, the largest proportion of respondents — 36 percent — chose Washington, compared with 23 percent who picked the Middle East and 14 percent who chose Haiti.

The poll included a random sample of 1,067 adults across the United States from November 29 to December.

We welcome you sharing your own conclusion on the impact on the economy, fiscal policy and your personal finance.

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List of top export/import product groups

The real estate bubble of 2001-2006 – Causes and effects –

Reason # 1 : U.S. trade imbalance

United States Exports and Imports
Top 12 Export Product Groups 1996
In Millions of US Dollars
1. Electrical machinery, apparatus and appliances $70,287
2. Road vehicles 51,703
3. Office machines and automatic data processing machines 45,751
4. Transport equipment 34,356
5. Miscellaneous manufactured articles 30,694
6. General industrial machinery and equipment 27,370
7. Machinery specialized for particular industries 26,628
8. Power generating machinery and equipment 23,169
9. Professional scientific and control instruments and apparatus 21,441
10. Telecommunication and sound record and reproduce apparatus and equipment 21,414
11. Cereals and cereal preparations 18,153
12. Organic chemicals 15,012

Top 12 Import Product Groups 1996
In Millions of US Dollars

1. Road vehicles $103,664
2. Electrical machinery, apparatus and appliances, 75,525
3. Office machines and automatic data processing machines 66,500
4. Petroleum, petroleum products and related materials 65,242
5. Articles of apparel and clothing accessories 41,559
6. Miscellaneous manufactured articles 38,844
7. Telecommunication and sound record and reproduce apparatus and equipment 34,167
8. General industrial machinery and equipment 25,286
9. Power generating machinery and equipment 22,499
10. Special transactions and commodities not classified by kind 20,532
11. Machinery specialized for particular industries 18,509
12. Nonmetallic mineral manufactures 15,650

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2001-2007 Real estate bubble causes

During the 1st decade of the 21st century there was a phenomenal growth of international trade. China, as an example, accumulated a surplus of trillions of dollars. They invested most of it in treasury bonds thus lowering and keeping the cost of money at extraordinary low rates. This in turn make home mortgage very accessible leading to a real estate bubble.

More to come…

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Real estate investment opportunities in California

Top buying opportunities in California :
1. Modesto, California
Unemployment Rate: 17.3%
Foreclosure Rate: 4.59%
2. Merced, California
Unemployment Rate: 18.1%
Foreclosure Rate: 4.47%
3. Riverside-San Bernardino-Ontario, California
Unemployment Rate: 14.4%
Foreclosure Rate: 4.37%
4. Stockton, California
Unemployment Rate: 16.5%
Foreclosure Rate: 4.37%
5. Vallejo-Fairfield, California
Unemployment Rate: 12.2%
Foreclosure Rate: 3.91%
6. Bakersfield, California
Unemployment Rate: 15.7%
Foreclosure Rate: 3.67%

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Real estate investment options

Besides buying single family properties and managing them yourselves there is an alternative option that requires less effort and still bring diversification and sizable ROI. REIT is a trouble free vehicle that provides returns that average double digit returns over the years.

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Good news for investment properties owners

The rental market will be definitely favorable for property owners in 2011.
Due to expectation of stagnant real estate values in the years ahead coupled with difficulty in obtaining investment propert loans there will be a peruny of properties available for rent. Furthermore first time home buyers will delay their buying decision until the market improves and will stay in the renters column adding further stress to the market.

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Latest real estate news

Mortgage rates are on the rise
Home foreclosure at all times high
Property values will be depressed for next 10 years

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