I lost count of how many people I spoke to in December who said, “Thank goodness 2009 is over.” As we enter 2010, I think most of us can agree. Lawrence Yun, the chief economist of the National Association of Realtors, stated that 2009 was the year of recovery and 2010 will be the year of growth. Florida’s existing home sales have risen for the past 15 months according to the latest housing data released by Florida Realtors. Condominiums which were overall slow to sell in 2009 increased 111% in November compared to November 2008. The statewide existing condominium median sales price was $104,400 in Florida versus a national median sales price of $172, 900*. Some of this activity was due to the first-time home buyer tax credit, more financing options slowly becoming available, the rebounding stock market, and yes, the arrival of winter and cold temperatures outside of Florida. National research notes that housing afford ability is at its peak and the highest on record.
So what triggered the recovery? Mainly the lower end of the existing home market. Investors came back to Florida intrigued by the bargains and distressed sales which drove down prices nationally by 13% for the year. Some markets were and are continuing to see price increases, though, due to multiple offers on these properties. Interest rates for a 30-year fixed rate mortgage which averaged 4.88% in the 4th quarter were a significant drop from 2008. At an all-time low, buying power for has never been better for those looking for their place in the sun.
The commercial market will continue to be troubled in 2010. Current commercial owners are having difficulty refinancing their existing debt and experts are expecting little improvement until 2011-2012. Multifamily properties will still benefit (albeit marginally) from the residential market factors but all other commercial sectors are expected to see increasing vacancies and negative rent growth. What can those looking to invest in America and Florida expect for 2010?* The positives:
- The new-home market is expected to improve.
- The recession will be behind us and we should see modest economic growth.
- If home values show consistent stabilization or even a modest increase in the third and fourth quarters, home sales could return to normal healthy levels.
While unemployment and the possibility of more distressed properties entering the market (particularly luxury properties) are relatively still unknown, the mood of the experts and real estate agents remain positive for 2010. So if you are thinking of making an investment in Florida, what should you do next? Get educated and do lots of research! Understand the areas in Florida that interest you especially their economic indicators and demographics that can have an impact on your investment. Establish relationships with “experts” who can help you find, make and manage your investment:
- An international banker or currency expert who can help you plan your foreign exchange needs.
- An accountant who understands the international tax implications of owning property outside your home country.
- A property manager who can look after your investment whether it is occupied by you part time, or by paying tenants.
A good way to start your education is on the internet, but there is no substitute for face-to-face meetings with your team of experts. Those planning a summer investment in Florida would do well to attend spring seminars or property shows, such as a Toronto seminar I have planned for May 2010 or if you are in U.K., you may visit our stand at A Place In The Sun overseas property Show in Earls Court in March 2010.
*According to the National Association of Realtors
Article Written by:Carla Rayman Director of International Business Development +1 941 487 5181 – Office +1 941 487 5106 – Direct 0845 338 5260 UK (phone number) Skype: carlarayman CarlaRayman@PrudentialPalmsRealty.com Prudential Palms Realty – International Division 130 North Tamiami Trail Sarasota, FL 34236 Patricia Tan International Sales Director +1 941 487 5181 – Office +1 941 487 5107 – Direct PatriciaTan@PrudentialPalmsRealty.com Prudential Palms Realty – International Division 130 North Tamiami Trail Sarasota, FL 34236