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.