Friday, 30 April 2010

Property market in Florida has reached its lowest point

That's according to a recent survey of Florida property professionals, says the Miami Herald. However, the same same survey says that the property market isn't looking like picking up any time soon. That's partly down to the fact that the state is facing tough economic conditions and also because banks aren't all that willing to give out loans.

However, one of the reasons of hope for an upturn in the property market is down to those looking to snap up some bargains - including foreign buyers. So, if you're a potential buyer from outside the US, it could be down to you to help out the property market!

Though is the property market really at rock bottom? I'd say that's very hard to call - and I'm sure there have been reports saying the same before. The market has certainly been on a downward slope for a while, so some sort of a recovery does feel due. But we can only wait and see.

Article: Survey: Florida real estate has hit bottom (29th April 2010, Miami Herald)

Monday, 26 April 2010

Demand rises for some Miami condos

Last week, the New York Times featured a piece about a slight upturn in fortunes for the condo market in Miami - specifically the ever-popular Miami Beach condos.

In particular, the Carribbean complex on Miami Beach (located on Collins Avenue, but in reality slightly north of what would actually be called Miami Beach) had buyers for all of its units - that's 103 of them - last year. Only 14 of these buyers went on to complete/close their sale, with everyone else walking away from their deal, losing their deposits in the process. As such, the developers of the building incurred heavy losses - though another company has now taken over control of the development. Now, at substantially lower prices, units are shifting and then some - only 15 condos remain unsold. Originally, units were being sold for around $1,100 per square foot, but now are going for around $600 per square foot.

Better yet, the majority of purchasers intend to live in the condos themselves, rather than being short-term investors. Such buyers are interested in prime locations such as Miami Beach (especially close to the famous South Beach) rather than other places with a surplus of condo units - such as the downtown area.

It is in this area that a new study, mentioned in the NY Times article, reveals that although 1,000 condo units sold between May and December 2009, most were to investors. Of the 22,000 units built there since 2003, an amazing 7,000 still remain unsold. (Though apparently 700 more have been sold since the study was completed.)

It's the downtown area that, despite a great deal of development and construction over the last decade or so, still is lacking something. The over-construction of these condo units hasn't helped - though some owners are now looking to rent out their properties (with some renters able to get amazing deals on brand new apartments - there's something to think about if you're interesting in renting), which has seen occupation rates in the area rise from 68% to 74%. These new residents have also drawn more retailers to the area, which is helping to establish it and make it more vibrant - and less of a ghost town.

If you're interesting in seeing what a downtown condo development looks like, take a look at the famous Icon Brickell, which is mentioned in the article. Made up of two buildings, plus a third residence/hotel, there's a whopping 1,646 units here - though only 125 units had sold by the end of 2009, with a further 199 sold this year, according to the New York Times. Some units have apparently been snapped up for less than $300 per square foot, which I can't imagine is what the developer had in mind.

The article mentions that condo prices in Miami Dade county have fallen by 51% from 2007, when the median price of a unit stood at $275,000. Though units are being snapped up, as described in the article, the concern is that once prices do start rising to any considerable extent, units owned by investors may flood the market - keeping prices low. It may be a while until the market fully recovers.

Though once again, if it is a bargain that you're may be the perfect opportunity to snap something up.

Article: In Miami, Condo Sales Rise as Prices Bottom Out (20th April 2010, The New York Times)

Sunday, 14 March 2010

Brits in Florida going through tough times

This week's Guardian featured an article on Brits who own a property in Florida - whether an actual home or merely a holiday home - and the rather serious problems that some of them are facing.

Florida is of course a major destination for Brits, whether it's to holiday in or to live; the article states that around 400,000 Brits live in the state, whilst 1.5 million visit annually. But like their American counterparts, British property owners will also have suffered with the recent property collapse in the US which has seen the value of houses and condos plummet. From 2006 to 2009, the Florida Association of Realtors states that the average price of a property in the Sunshine State has fallen by 43% - from $248,300 to $142,000.

The biggest issue is for those that took out mortgages to fund their purchases. Having once acquired loans easily from banks such as Lloyds TSB or Bank of America (back in the good - or bad - old days when they were much easier to come by and at more than favourable rates), some owners are now finding that their mortgages are far higher than the value of their property.

This is even leaving some to completely abandon their property and head back home, despite owning money. As Patricia Kawaja, founder of the Florida Association of British Businessess says "there's no extradition treaty for people unable to pay their mortgages" so it's the best option for some.

So, what's the good news? Well, for those looking to buy at the moment, low prices (and a glut of foreclosed homes) means there's plenty of bargains out there for all types of properties - one Orlando agent mentioned in the article has a 5-bedroom house on offer for just $118,000. There's understandably less demand, so any potential purchasers have less competition from other buyers.

And, once again, the new Harry Potter theme park in Orlando is mentioned as an additional draw. Sure, it may bring back more visitors but I'm still doubtful on the connection with the property market!

Article: Hard times for British expats in the Florida sun (8th March 2010, The Guardian)

Sunday, 28 February 2010

Time to swoop in the Sunshine State

Today's Sunday Times features an article on property in Florida - and how, after falling out of favour with British buyers in the last few years, many may be returning to snap up some bargains.

Low prices added with the expectation that the Pound is due to fall further against the Dollar means that the Times recommends that now may well be a perfect time to consider buying in Florida.

The article also mentions that the large number of foreclosures have seen the supply of properties rise sharply in the last couple of years. It states that such properties can be obtained for ridiculously low prices - a condo could be purchased for a mere $15,000, whilst some auctions start off at only 1 cent - but such "bargains" actually have a whole host of problems. If the property isn't suffering from a state of disrepair - not unlikely, if they have been foreclosed - then it's most likely to be in a development with problems or an undesirable neighbourhood.

(However - to be clear - I'm only talking about very cheap properties. Other, more sensibly priced houses or flats that have fallen to foreclosure may actually be very good bargains.)

The article also highlights areas potential buyers may want to look into. It states that the western side of Florida is more relaxed, with subtropical weather, whilst the eastern side - basically, it talks about Miami - is more lively. And then of course, there's always Orlando which it also mentions.

Other useful tips the article mentions that may be helpful to those looking to buy:
  • Mid-range, single-family properties (basically houses) are considered a better buy as they're more in demand, so will have a better resale value (although I would suggest this really depends on the area - I can't imagine that condos in the southeast Florida/Miami area are ever out of fashion)
  • Always search for properties in person, don't try and buy having only seen online (couldn't agree more - at the very least, you'll have fun viewing properties in the sun!)
  • A property in a gated development will be more secure, of interest if you're not there year-round
  • Obtaining a Dollar mortgage will mean you're liable to exchange rate fluctuations - your monthly payments may suddenly increase a fair amount as the $-£ exchange rate varies
  • Don't forget that - whatever the property is - you'll have to pay an annual property tax; on some properties (condos) you'll also have monthly maintenance fees which may be hefty
  • If you're planning on renting out your property to holidaymakers or others, make sure there are no restrictions (from the condo association, for example) that apply
The article also gives some examples of properties on the market right now in various parts of Florida. Overall, it's a pretty good piece that will help you if you're just starting your search for a property in Florida!

Article: Florida: a mix of different personalities (28th February, The Sunday Times)

Saturday, 27 February 2010

The wrong kind of foreclosure

Now, here's a weird one. Having a property go into foreclosure - when the owners have paid for it in cash.

That's exactly what happened to a Massachusetts couple who own a house in Florida, bought using their life savings as an investment and for their future retirement. Earlier this month, the St Petersburg Times reported on the rather-harrowing struggle they faced in trying to rectify the situation and take back what's rightly theirs.

The couple bought a 3-bedroom house in Spring Hill (on the western side of Florida, north of Tampa) for $139,000 in 2005. They had been renting the property out when their tenant called them last summer, notifying them that representatives from the Bank of America were there to change the locks. The owner, Charlie Cardoso, spoke to the Bank of America - telling them they had the wrong house - and believed the problem had been fixed, thinking no more of the matter.

But that wasn't the end. After a few more interactions at the house from people hired by the Bank of America, a lock box (basically, a strong padlock installed on a door handle to prevent anyone from entering without a specific code or key) was placed on their front door this January. By this time, their tenant had understandably moved out, unnerved by the whole situation.

The problem has arisen because a house on the same street - 10 doors down - is legitimately undergoing foreclosure by the Bank of America. Despite contact from Mr Cardoso and his wife, Bank of America have yet to amend the error involving their house.

The Cardosos have now filed suit against the Bank of America (and its unnamed contractors), seeking unspecified damages. The suit states that the company "company showed negligence, trespassed and caused the couple emotional distress and financial hardship", as well as charging it with defamation and libel - for affecting their standing among the local community, not to mention associating them with foreclosure.

It seems crazy that such a situation has arisen but the same article states that because of the high number of foreclosures that are taking place these days, it less rare than one might think. Nevertheless, you do have to feel very sorry for the Cardosos, who are having to go through all the stress and upset of a foreclosure - even though it's all in error.

Article: Bank of America forecloses on house that couple had paid cash for (12th February 2010, St Petersburg Times)

Wednesday, 10 February 2010

New Orlando theme park to attract more British buyers?

Today's London paper The Evening Standard featured a short article on something that might attract some British buyers back to the Sunshine State - the new Harry Potter theme park in Orlando.

I think it's a slightly tenuous link, to be honest - I don't doubt that many millions of visitors each year are drawn to the theme parks of Orlando, but I don't believe it's something to really draw in that many property buyers. Unless, of course, someone's buying with the intention of letting out the property to holidaymakers - but the article never makes any mention of this.

The piece does, however, point out some useful facts. For those that are interested in Orlando and all the delights it has to offer, it states that Sarasota and Tampa, about 2 hours away on the Gulf Coast may be suitable locations to buy in. It also states that the west coast of Florida is less crowded than the east - though I suppose that's not for everyone! Nevertheless, the point is that if buying in either of these locations you'll be close to something (or perhaps even right on, if you're lucky) that Orlando doesn't have - the sea. For me, being on the coast and near beaches wins over Orlando and its theme parks every time.

The Standard article also states that prices are "back up to 2003 levels" which, well, doesn't really mean much. It makes no mention of when prices were at their highest (before the crash, so think 2006) so the fact that property prices are now back to where they were in 2003 isn't all that exciting, nor especially a reason to get a move on and buy before they spiral out of control.

However, it does rightly say that the oversupply of properties is one reason to consider purchasing now - with such strong supply, buyers will be able to take their pick from a selection of good quality stock. As they say, this "puts buyers in the driving seat". It claims vast number of properties on the market caused prices in Florida to fall by between 25-50% (that's quite a huge range, no?) in the last 18 months, and the oversupply will take another year to lessen and disappear, according to one agent in Orlando. Prices have certainly dropped sharply, so this coupled with supply greatly outstripping demand certainly is a reason to consider buying now.

Unfortunately, I couldn't find the article online, but I have essentially covered the main points here!

Note: for those interested in the new theme park, it's called the Wizarding World of Harry Potter and it's opening at Universal Orlando sometime this spring.

Wednesday, 27 January 2010

How some condo associations in southeast Florida are surviving - and thriving

I've written in the past about the problems that many condo associations in southeast Florida are facing in the current tough economic climate. With general costs of upkeep (grounds, pool, lifts and so on) increasing, and some condo owners either failing to make their monthly maintenance payments (not to mention those units that may have fallen to foreclosure not being paid for at all), it is no surprise that some are struggling to budget accordingly.

However, the Sun Sentinel recently featured an article that showed that it doesn't always have to be doom and gloom for these associations - in fact, in one particular case, it's just the opposite. The condo association for the Melrose Point at Monarch Lakes development in Miramar (northeast of Miami; east of Hollywood) has managed to cut its cost by $30,000 by either re-negotiating current service contracts, or cutting unnecessary ones completely. They've also done their best to regulate maintenance payments, putting those owners that have fallen behind on payment plans.

The association is now (admittedly, self-nominated) for the Florida Communities of Excellence Awards, for which about 200 associations have been put forward. And they even appear to have a snazzy website (Melrose Point at Monarch Lakes Condominium Association) on which there's a private, residents' only section, as well as a page on which maintenance payments can be made online. How useful is that?

Article: Community associations find ways to thrive (26th January 2010, Sun Sentinel)