Past few winters, I’ve scouted property in Florida, thinking of living there at least half the year, and I’ve spent time in Fort Myers, Tampa, Sarasota, and Miami, looking at houses and condos. The places I’ve seen look pretty comfortable, the real estate market seems to be steadily affordable, and mortgage rates are very low. I’m tempted, but I’m also wondering–what’s the catch?
Is this anything other than a buyer’s market? Are there buyers recently who have discovered that the cheap real estate they’ve bought has plunged further in value? Have people bought into condos only to find that the building has gone bellyup, or that their maintenance has skyrocketed to compensate for all the units that have been foreclosed on? Have entire neighborhoods turned into ghost towns?
I’m looking and I see very little but opportunity, especially for someone looking to retire eventually (3-5 years) to a warm climate, but I wonder what I’m not seeing (and certainly not hearing about from the real estate agents taking me around to look at properties.)
All of this. It’s not as bad in Tampa Bay and Miami because the economies here have weathered the recession (and the housing collapse) better, but it’s been worse in SW Florida (Like Ft Myers and Sarasota).
At least, that’s my impression based on living here all but three years of my life. I have no cites, but local news certainly gives that feeling.
This accords with my impression as well. Although I am biased, having grown up in Palm Beach County. South Florida might be a good choice; West Palm Beach and Delray seem to be doing well (neither is a boomtown, but they haven’t been hit as hard as the more far-flung areas like PSL or Palm Bay (I know that neither of these are considered South Florida)). Boca or Fort Lauderdale/Broward County are also fine communities.
I live in FL and I would hazard a guess that condos on the beach are as empty as they are going to get, so fees are probably pretty stable. Prices are really low right now.
The only catch I can think of is the matter of acquiring homeowners’ insurance. There is only one private company – State Farm – that writes HO policies in this state, and I don’t even know if they still write new policies or if they have pulled back to only servicing that which they’ve underwritten already. Your only option is the high-risk State insurance, for which the rates are ridiculous. Be sure to get the extra flood rider and the hurricane rider, as neither are covered in a standard HO policy in this state.
As for home values, I look up and down the street and see no abandoned homes. There is one empty house, but my neighbor owns it and she keeps it up so her kids and grandkids have a place to stay when they come to visit her. She’s got her own guest house down the street! In North Florida, at least, the market seems somewhat stable. I wouldn’t try to start a business, like opening a new restaurant, or anything, but to buy a house and live here part time? No sweat. Consider the Panhandle: you get more for your money, insurance and taxes are a smidge lower than South Florida, and the beaches are just as lovely.
I moved to this state in 1991. At that time, I was told that roughly 1,000 people move into Florida every year. AFAIK, that figure has not changed. There must not be much of a catch, 'cause if there is, I’m not seeing one.
According to the Census (PDF) from 2000-2004, it was approx 190,000 net migration to Florida from other states every year. The 2010 version of this report doesn’t appear to be available yet, but AFAICT it hasn’t fallen too far.
I’ll take cockroaches over what happened when I was sleeping in a converted utility room for a year or so (in Sarasota). The 6" dryer outlet pipe was still there, hanging out in midspace…wait, actually it was hanging out about 3 inches from ground level on the outside. Frogs couldn’t resist it. During the night. Did I mention I also slept on the floor?
Eh? That’s not true. Private carriers currently offering existing-construction homeowners’ policies in Florida include Tower Hill, GEICO, Security First, American Home, Sunshine State, Fidelity, Florida Peninsula, St. Johns, Southern Fidelity, Liberty Mutual, Auto Club, United P & C, Universal P & C…
Best I could suggest would be finding a really good real estate agent. Anyone who’s been in the business a while in that area should have a good feel for trends and changing neighborhoods.
The Chinese drywall issue is a relatively recent one, and it looks like the matter is somewhat nebulous. The Florida Dept. of Health has some info here (scroll down the page a bit to the section on drywall). It looks like the issue didn’t crop up until 2006 or so.
I haven’t really had any problems with the Palmetto bugs. Maybe one or two per year actually get into the house, and a few more than that get in the garage. No big deal, really.
Homeowner’s insurance is very location dependent (last I checked). After the 2004 hurricane season the majors just started pulling out of certain regions. We live on the East coast, near Cocoa Beach, and State Farm drew a line about a mile inland from the Indian River and just pulled out of the area between that line and the coast. We’re with the state program now, and while insurance is expensive, it doesn’t seem that much more expensive than when we were with State Farm.
There is a lot of cheap real estate down here. If I were buying I would be careful of a few things:
[ul]
[li]How long has the property been vacant (if it is)? If it’s been vacant for a while, it may or may not have been well maintained. Might need a little more work after move-in than you would expect.[/li][li]Is it a foreclosure or short sale? My in-laws have been looking at properties down here, and the buying process for these kinds of homes just seems much, much more complicated than a standard sale. I’m sure a good agent can clue you in to the details.[/li][li]What’s the history of the neighborhood during the last few years’ storms? Is the ground (relatively) high enough that wind damage is the only concern, or is the property low enough or near enough a body of water that flooding is a real concern?[/ul][/li]
They’ve been calling the stretch of the east coast between Jacksonville and West Palm Beach the “Repo Riviera” for a couple of ears now. It’s even a bit worse in my neck of the woods since Kennedy Space Center has laid off so many people. There are some very, very low home prices around here.
Interesting. When State Farm was threatening to pull out of Florida, I started making calls and scrambling to find HO insurance. There are at least three in your list above who told me “Sorry, we’re not writing any new policies in Florida.”
I gave up after about a half-dozen phone calls so I did not call every single one you listed.
IIRC, everyone briefly put a moratorium on new policies after T.S. Fay. State Farm even told my wife they didn’t insure homes in our area 6 weeks after they wrote us a policy. You can read about it here.
Eventually, the DFS told all the insurers that if they stopped writing homeowners’ policies they’d have to stop writing other ones too and all was well.