Articles From Around Florida

When commenting on Florida real estate articles, you might have noticed that the majority of articles that I write about cover southeast Florida. Today I thought I'd take a quick look at what's making the real estate news elsewhere in the state.

The Orlando Sentinel featured an article on the continuing fall in property prices in the city. The "Metro Orlando index", used to gauge house prices in the region and based on the Office of Federal Housing Enterprise Oversight, saw prices drop 3.3% for the first quarter of 2008 - the fourth quarter in a row that prices have dropped. Essentially, this percentage drop diminishes any hopes that the housing market may improve in the near future.

The article also mentions a University of Central Florida real-estate specialist, Randy I. Anderson, and his belief that the downturn in prices was a:

...historic "shuffling of the cards" that many savvy real-estate
professionals will use to their advantage by snapping up bargains while others remain fearfully on the sidelines.

Meanwhile over in west Florida, the St Petersburg Times writes that the market may finally be bottoming out after two years of gloom. Or rather, there are signs that the market may finally becoming more stable. Some places report an increase in sales when comparing April of this year to April 2007, whilst condo sales have improved. Generally, though, this improvement in sales may largely be down to low prices, or vendors realising that they really need to price realistically in order to shift their homes.

The Fort Meyers News-Press features a blog from a local realtor, who speculates on the timing of any new property purchase. He talks about something I've mentioned before on this blog - the dilemma of when to buy. Property prices are falling, and may well continue to do so, so when's the best time to buy? Denny Grimes, the author of the piece, makes the bold statement that:

...we are going to witness what may be one of the best buying opportunities over the past 20 years. For some, it will be the last great real estate buying opportunity of their lifetime.

Essentially, his article makes the important point that the best time to buy isn't when prices are at their lowest (because you can only tell that the market has reached this point after it has happened) but when sellers are in their weakest position. When this occurs, they will likely to desperate to offload their properties and vendors can call most of the shots.

- Article: Hope dims for a turnaround in Orlando-area housing, experts find (Orlando Sentinel, 23rd May 2008)
- Article: House market seems to stabilize (St Petersburg Times, 24th May 2008)
- Article: When to buy is the most important question to answer (Fort Meyers News-Press, 25th May 2008)

Article: What Can You Get For $406,000?

It's all very well talking about falling property prices here, and a vast increase in the number of properties available there...but how about giving actual examples of some of these properties? The Miami Herald yesterday ran an article about what buyers in southeast Florida could get for around the $400,000 mark.

Some rather sleek homes are featured - take a look! Also listed are each property's annual taxes, which is useful to those trying to get a rough idea on the amount of tax they might have to pay.

Article: What can you get for $406,000? (Miami Herald, 25th May 2008)
(N.B. Article is in PDF format.)

America's Best Beach

This is slightly more travel-related than property-related, but I still thought I'd comment on it. After all, you could very well own a holiday home near one of America's top beaches - just imagine how fantastic that would be!

Florida International University professor Stephen P. Leatherman, also known as "Dr Beach", has announced his top ten list of the best beaches in the United States. Three Florida beaches made the top ten, including Caladesi Island (near Tampa) which was proclaimed the best beach in the country. The relative remoteness of the beach helped it hit the top spot in the list; the island is a state park and can only be reached by ferry or private boat.

All in all, sounds lovely - I should pay a visit one day soon!

The other two Florida beaches that made the list were Siesta Beach in Sarasota and Cape Florida State Park near Miami.

As anyone who's visited the state will know, Florida has an abundance of beautiful beaches. You don't have to be located near to one of the above to enjoy the glorious sea, sand and sun.

- Caladesi Island State Park
- Professor calls Caladesi Island US's best beach

Article: Condo Crunch in S. Florida Good News For Bargain Hunters

Pay attention, foreign buyers!

Yesterday's Sun Sentinel had an article on how the drop in housing prices in south Florida is, rather understandably, proving an attraction to foreign buyers. Lured by tales that condos are now going for "25 to 60 percent less" than they were during the boom property years, many foreign buyers are heading over to the Sunshine State hoping for bargains. The article mentions in particular interest from English, German, Italian, South American and Indian buyers.

I certainly think that there's bargains to be had. If you're after making a quick buck, as it were, purchasing in Florida clearly isn't for you at the moment. However, if you're after a lovely vacation home and are prepared to accept that prices will most likely continue falling a bit further in the near future, now may well be the time to strike.

There's also plenty of supply. If you head out to Florida on a property tour, you will probably get shown twice or three times as many different properties as you may have done a few years back. Some vendors are desperate to sell; I've heard of property notices even being posted up on electricity posts in a clear "must sell" situation. All of this means buyers are in a much stronger position to negotiate better prices for themselves.

Ultimately, your own situation and financial position will dictate whether or not you can afford a holiday home in Florida. But if it's something you've been considering for a while, you might like to take the plunge sooner rather than later!

Article: Condo crunch in S. Florida good news for bargain hunters (Sun Sentinel, 18th May 2008)

Article: Collateral Foreclosure Damage For Condo Owners

The New York Times recently featured an article on how condo properties that have foreclosed affect other owners in the same development. It's something I've written about before (Article: Unpaid Fees Trouble Condos) and the NY Times article highlights the experiences of condo owners in Miami, San Diego and Chicago.

In particular, it mentions the experience of a lady, Ms Sanz, that bought a condo in a Miami high-rise four years ago. She's now being asked for fork out more per month in maintenance fees, yet still finds the building in a state of disrepair. In her case, nearly 1 out of 6 of her neighbours are facing foreclosure and struggling to make maintenance payments. A buyer taken to look at apartments in the development wants a written guarantee that he would not have to pay more in fees if he bought a unit. An interesting idea, but is it one that would really work? I understand his nervousness but if he's concerned about the building, he might be better off looking to buy elsewhere.

The NY Times also speaks of a condo development in Chicago - one that contains relatively few units. In such a situation, even if one owner gets into financial difficulties or forecloses, everyone else is affected. And in a worse case scenario in a small development, if 50-75% of units foreclose, the condo association may decide to disband entirely.

Article: Collateral Foreclosure Damage for Condo Owners (The New York Times, 15th May 2008)

Article: Median Home Prices Fall In Broward, Palm Beach Counties

The Sun Sentinel reports that median house prices in the U.S. fell for the first quarter of 2008, compared to the same time period last year - a trend reflected in Broward and Palm Beach counties in southeast Florida. The median of house prices refers to the point where half of properties were priced above, and half below.

So what where the actual statistics? Broward county saw a 15% fall to a median house price of $311,100, whilst Palm Beach county had a fall of 12% to $334,500. To put this in perspective, the whole of the U.S. saw a fall of 7.7% to a median house price of $196,300. By these figures, it appears that prices in some areas of southeast Florida are falling faster than the rest of the country!

Go check out the article and, more interestingly, check out the comments on it from local residents. Sure, there's some stupid comments, but for the most part it's quite a healthy debate!

Article: Median home prices fall in Broward, Palm Beach counties (13th May 2008, Sun Sentinel)

Article: Look At That Pig In Lipstick

No, I haven't gone mad - that really is the title of an article on south Florida property...

The Broward/Palm Beach version of the New Times, a local south Florida newspaper, gives more details on inventive approaches from realtors - and vendors themselves - to help shift property.

The article starts by mentioning a lady who's selling her rather plush home in Ocala (in northern Florida) - a house with a couple of 50-foot terraces and two acres of land that's worth $1.25 million. Or rather, she's not selling it - she's giving it away. That's right. Giving it away. This lady will give her home away to the winner of a contest that she's running, in which entrants must write a 100 to 300 word essay on a pet. Sounds crazy? Not really. All entries much be accompanied by a $200 fee, and if the contest doesn't draw 6,250 entries then the lady reserves the right to cancel the whole thing, refunding $180 to each person. And yes, $200 multiplied by 6,250 equals $1.25 million, the value of the house. If she gets more than that number of entries, it will be pure profit to her. Sounds pretty clever to me!

Real estate agents and developers are also offering extras in order to help sell their properties, from designer furniture to one year leases on cars (fancy a new Mercedes?) to spa memberships at up-market hotels. Some developers offer these extras because if they've already sold a number of units at a development, they don't want to lower the value of remaining flats. Instead of lowering prices, they offer purchasers additional benefits.

The article also mentions in particular how one agent, Zach Finn, is coping with the market downturn - he's marketing overseas, particularly in London and Paris. Finn states "the dollar is down and prices are down... Europeans are coming over to America on real estate spending sprees."

So put it this way - buy a property in Florida, and you could enjoy lots of additional goodies on the side!

Article: Look at That Pig in Lipstick (New Times, 8th May 2008)

Article: Floridians Feel Heat...

A recent Sun Sentinel article reveals that the number of foreclosure homes in the U.S. continuing to rise - double the number of homes foreclosed in the first quarter of this year than for the same quarter last year. The most affected states are California, Nevada and yes, Florida.

The article states that alleviating the foreclose problem would need people to start buying again. Many respectable buyers can't do so, however, because of the unavailability of suitable loans.

If you're raising financing from the UK or, even better, don't need to acquire a loan, you'll be in a much better position than many Florida purchasers and, as such, be a much stronger buyer.

The article also has an interesting map for Broward and Palm Beach counties showing subprime loan and foreclosure areas.

Article: Floridians feel heat as homes facing foreclosure nationwide more than double (Sun Sentinel, 29th April 2008)

Opening A US Dollars Account

Whilst setting up my various utility and maintenance accounts for my new flat in Florida, it seemed quite clear that almost all of them would only accept payment from a US bank account or payment by US dollars cheque (check). Here in the UK, it's possible to pay for some utility accounts by credit card (even paying online) or by transferring funds from your bank account. This doesn't seem possible in the U.S.

I therefore needed to set up a US bank account. Whilst I believe this would be simple enough to do if you're actually out in Florida, it's not so straightfoward how to do it from the UK!

So what's the solution? I'd advise checking with your local bank in your home country to see if they can help - they may have branches in the U.S. I bank with HSBC in the UK, and they have a pretty large presence in the U.S.

As such, my local HSBC branch were able to help me set up a US bank account. I was sent various forms that I had to fill in and then submit to my branch...and then simply wait for the account to be set up. In fact, the whole process was much simpler than I was expecting.

A few things to note, however:

• I believe you can specify a US branch - this hopefully means you can specify a branch close to your property! If not, you may a general branch (e.g. based in New York state, as mine is) which can be reached by telephone banking, 24 hours a day. If you have Internet banking, a local branch may also not be that important.
• You may have to pay a fee to your bank for setting up a US bank account.
• You will definitely have to pay to get a cheque (check) book on the US account. I didn't know this (I don't pay for this in the UK!) and waited a good few weeks for my cheque book to come through, not realising they weren't sending it to me because I didn't have any money in my account (and therefore couldn't pay for the book). Except I didn't have any money in my account because I was waiting for the cheque book to reach me first!
• The easiest account to set up is the most basic - a current account. You'll probably be able to get a debit card for this type of account, though, which might be useful!

If your home bank can't help, I'd advise to set up an account the next time you're in the U.S. Other banks in the UK may be able to set up an account for you, but are likely to have restrictions - e.g. Citibank in the UK can open up a US current account for you, but you'll either need to be an existing customer, or maintain a monthly balance of £2,000 in the account - otherwise you'll have to pay monthly fees.