Florida Real Estate Properties used to be the most sought properties in the United Stated. Wonderful climate, the second longest coastline in the United States and numerous tourist attractions made Florida one of the major destinations of holiday trips as well as a favorite place for spending one’s retirement. These factors resulted in a steep increase of the real estate sales rate, as more and more people decided to buy properties in the Sun State – either as summer house or places to spend the coming retirement years.
During the last few years, Florida’s popularity drove the real estate properties’ prices to unprecedented heights. This was backed up also by the constantly growing population. Despite the fact that Florida is one of the “balanced” states with the net immigration only a few per cent points higher than emigration, the state’s population is growing very quickly – from roughly 13 million in 1990 to 16 million in 2000 and about 18 million in 2006.
Florida Real Estate Properties: Prices and Trends
What was the Florida real estate market’s greatest strength – the tendency of people throughout the United States to buy second homes there – caused its real estate market to suffer heavy losses during the nationwide real estate industry slowdown. Second homes were among the first properties buyers decided to forget about and there were not enough first-time home buyers to fill out the breach.
As the result the sales rate of Florida real estate properties slumped statewide, in some counties it dropped even as much as 34% between January, 2006 and January, 2007. The prices, however, remained on roughly the same level as before the market slowdown – though there are a few reports indicating that the major (15-20%) price reduction is on its way as we speak. While more and more buyers withdraw, at least temporarily, from the purchases, sellers still intend to try to sell their houses at premium prices. These two factors create the classic from of the buyer’s market.
This trend has been further strengthened by the taxation debate in a few leading Florida counties. Many potential buyers of Florida real estate properties are now holding on the transaction waiting for the decisions concerning the real estate tax cuts before making the foreclosure.
The bottom line
As the market signals are mixed and unclear, the situation on Florida real estate market is currently extremely hard to assess. Most experts however, expect that the Florida real estate market is now hitting the bottom and the properties’ sales rate will begin to increase starting in 2008.
Despite the current problems, most investors and construction companies point that Florida still remains an excellent retirement location. As the generation of baby boomers inevitably enters the retirement age, the Florida real estate properties will be more and more often sold. While many buyers are now postponing the purchases due to high property prices, they have never resigned from Florida as the place to move to for the retirement. As the result, even the smallest price drop may trigger an increase in the Florida real estate properties’ sales rate and end the slowdown. If such thing happens, it will put the whole Florida economy back on its track in a few months, as the construction industry and the consumer goods sector will power up to meet the real estate industry and buyers’ needs.