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)