Florida is the number one destination in the USA with British tourists and second homebuyers. More than one million of us head to the state's sandy beaches, keys and world-class attractions annually. Should you buy there?
By Gordon Miller
Walt Disney World, Sea World and Universal Studios are just a few of the major theme parks that draw us to Florida's shores. The very same attractions have compelled more than an estimated 50,000 Britons to buy a piece of Florida real estate either as a holiday home or an investment property to let on the open market to fellow Britons or the tens of million Americans, Japanese and Europeans who visit Florida annually. The state's overall appeal makes it the third most popular destination with British overseas property buyers, according to the industry body, the Association of Property Professionals (AIPP).
Throughout the mid-years of the decade, house prices virtually doubled across Florida; 30 per cent annual house price appreciation was recorded in most of the major counties, including Miami and Orlando, where the major tourist attractions are located. But after the rise came the fall. House prices have crashed as quickly as they rose, losing half their value on average since 2007 when the credit crunch first wrought its havoc in the USA and then worldwide.
As an indication of the scale of the property market crash, Florida's median sales price for existing homes was $141,300 in March 2009; a year ago, it was $201,700 a 30 per cent decrease, according to Florida Association of Realtors. In April, the Orlando Regional Realtor Association examined 'distress sales' in detail and found that 49 per cent of the homes sold by its members last month were either owned by banks already, or had been sold under financial pressure of some kind.
Foreclosures (properties where the owners have simply walked away from the debt) have reached unprecedented levels. The result is a market in freefall but one where bargains are to be had for those with cash in their pocket or access to finance. Lee Weaver Director of Sales at British Homes Group, which has specialised in Florida for the past 10 years, and which has compiled a database of foreclosure and repossession properties, said, 'Real Estate Owned (a term for properties that have been repossessed - and therefore are "owned" - by the bank) prices can be as low as 70 per cent off those asked during the height of the bubble. Almost all sales are for cash and close quickly, usually within 30 to 60 days.'
In the short-term there is little sign of the downturn ending soon - house prices are still falling albeit less markedly - although on the upside the number of property sales has increased year-on year in recent months.
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