Florida has often been an attractive destination because throughout the year it’s generally a warmer location than other regions of the United States. That factor alone is a major attractant for senior citizens as well as those who can’t stand being in the cold for extended periods of the year.
The state has taken a beating in the last four years since the 2008 recession kicked in. Like California, Florida saw an extreme amount of foreclosures and glutted housing inventory, which depressed properties values considerably. Only in 2013, now that the national economy is rising, is Florida also starting to realize a turnaround in its own regional condition.
Unfortunately, Florida is even more of mixed bag now than it was at the height of the real estate market in 2007. This is because the state has some of the best locations and some of the worse all mixed up next to each other. As a result, research and vetting properties in Florida is absolutely critical before putting any money down.
Who is buying homes in Florida is also important to understand as well. Traditionally, the state has a high proportion of home buyers who don’t need a home but are buying one out of convenience. This includes retirees, second-home owners, investors and foreigners looking to park their money somewhere generally stable and safe versus their own country’s options. This influences Florida home-pricing considerably because such buyers generally have more time to be choosy and can driving pricing down to a level they like, especially when there’s lots of inventory competing for those same buyer dollars.
In 2013 the main driver that is allowing the state to start increasing pricing is the fact that the abundant inventory is starting to shrink finally. Year-to-year, December sales in 2012 were 16 percent higher than that of 2011. Similarly, the number of sales in progress were 40 percent higher than 2011. More telling, the median price had risen by the end of 2012 to 180,600 versus $154,000 in the prior year.
The above said, it doesn’t mean every neighborhood in Florida is significantly improving. The improvement behavior can flip-flop between high-end homes and lower income areas. So new buyers looking to enter the state’s market should be asking some critical questions:
• How fast will the market in a particular neighborhood change? Some areas have maxed out on development, so new homes are highly unlikely to play a factor in price changes. That, in turn, means the given neighborhood will only rise or fall as its owners take care of their location. Other regions are seeing lots of fluctuation with new homes and changes. That can cause wild swings in value as a result.
• Is the location extremely popular? Like anything in high demand, when a bunch of buyers want the same thing, the price goes up. Popular locations will see heavy competition for sales, regardless of whether it’s for a detached single-family home or a condo.
• Is everyone in a neighborhood an investor versus a homeowner? It can make a huge difference on how well the neighborhood takes care of itself if people live in the homes versus just hold them for profit. Investors tend to balk when the economy goes bad, abandoning properties and letting them go bad. They also tend to bring in renters who often have no concerns about taking care of the property or behaving in a way that keeps the street looking clean and desirable. Homeowners, in comparison, visibly maintain their property on average, and repair problems quickly. They also communicate and work with each other to protect the immediate area from problems. That in turn makes a home value go up.
• Is the financing affordable? Florida has plenty of banks and lenders for home-buying, but many of them were burned during the 2008 recession and are just now recovering. Their mortgage loan rates can tend to be higher to protect the lender better from risk, recover from losses, and to weed out riskier buyers from better ones. While a person may find the perfect home, the financing may make a purchase impossible if the cost is too expensive in fees, points and interest charges.
Buyers should also take into account geographical trends in the state when choosing a property. Florida regularly sees and experiences hurricane season every year from July to November. Some years the hurricanes can result in direct hits, causing significant damage to homes and neighborhoods. Those seriously hit often tend to be on the coastline, being exposed to both wind and seawater. Further inland provides some better protection from hurricane damage, but properties can still be hit with wind damage. Because of the inherent risk, buyers should definitely consider where all the public emergency resources are in proximity to a property before buying, including hospitals, public shelters, fire departments, main transportation routes, gasoline, and supplies, such as food and water.
Finally, if a buyer is moving to a location as a senior or with a senior member in the family, proximity to senior services, medical resources, and hospitals are all key factors. Florida, fortunately, has a high population of senior citizens, so all of these resources are in plentiful abundance. However, they’re not always in the best location versus where a home is situated, so this should be planned out as well versus all the other needs of a family.