In the first few years of the real estate boom in Florida, buyers went crazy at the sight of empty houses and plots for sale. Speculators bought under-construction apartments but after 2005 the frenzy subsided. Price undercutting, falling sales and auctioning of properties were as rampant as defaulting on mortgage payments and foreclosures.
While beaches, amusement parks, casinos, nightclubs in their proximity do help make lucrative sales when it comes to real estate purchases, yet buyers today are exercising more caution. For bargain hunters too, the time is right to cash in on a property and cash out eventually once the market heats up. Discounting is prominent where sellers are desperate to get the property off their hands. Massive price cuts in a bid to lure buyers result.
Southwest Florida witnesses prices for properties on golf courses or in their proximity or even closer to the waterfront steadily rising. Conservative architecture on the other hand is being pressurized and prices elsewhere are tumbling fast. Brokers involved in selling existing properties are competing with those selling newer ones and the situation is getting more difficult for the former who have to compete with upgrades and generous incentives of the latter.
While smaller cities in Florida State are faring better than those cities with not much development, they are being spared the impact of the real estate bust. Florida Keys is one area which is witnessing restrictions in new construction because of a shortfall in land available. Naturally investing in residential real estate has also fallen in response. However, there are adequate brokers willing to bet that buyers will have the purchasing power to invest in a spacious second home between Miami and Florida Keys.
In the soft market, conditions are such that there is no saying what kind of properties will be lapped up and what will remain unsold. Property auctions though allowing the sellers to get some returns on their investment are highly unpredictable. If the piece of real estate is at the lower end of the investment hotspot, there is a chance it will get sold, for a buyer can either rent it out or build on it. Speculating on a bigger property has its risks with no knowing of which way the market may turn.
Seeing this, a question that echoes in many minds is how long will this downturn continue? The higher priced and top of the pick real estate properties are queuing up and by the end of 2008 the numbers will increase. Though the purchasing power of the rich has not been affected there is a limit as to the number of residences even the millionaires will want to invest in, in Florida. So where are the buyers?
Some of the key problems of real estate investing in Florida stem from the high property taxes and home insurance premiums which soar post hurricanes. In the event of these being resolved, Florida’s real estate market is all set of witness a second boom. Those of us who have been watching the trends very closely especially in Florida agree that it is just a matter of time.