Wednesday, January 30, 2013
Sick of the cold? Maybe you should buy a place in Florida, where temperatures are warm and the housing market is heating up.
The cold snap gripping much of the country is surely prodding many to dream of owning a second home someplace warm, or of moving there for good. Data show that Florida's housing market might be in a sweet spot. Prices remain low, as Florida was among the states hit hardest by the collapse of the housing bubble, but prices are on the rise, so a purchase now would appear less risky than it would have a year ago.
But Florida also offers some object lessons. Its volatile housing market demonstrates the importance of thinking clearly about the pros and cons of buying a home when you don't have to. Placing the wrong bet can be very, very dangerous.
A large portion of Florida's housing market is driven by people who don't really need to buy, such as retirees who could stay where they are in other parts of the country and second-home buyers who could wait if conditions aren't right. That makes them more fickle than people who must move for a job or growing family. As a result, Florida home prices tend to swing to extremes.
Now things are getting better. The number of housing sales that closed in December was nearly 16% higher than a year earlier, according to Florida Realtors, a trade group. And the number of pending sales, or those with signed contracts that have not yet closed, was up nearly 40%. The median sales price remained affordable, at $154,000, up about 14% from a year earlier. Nationally, the median sales price was $180,600 in November, a 10% increase from a year earlier.
Median sales prices need to be taken with a grain of salt. They don't necessarily mean the average house value has grown 14% in Florida, because sometimes it's the pricier homes that move more briskly, other times it's the cheaper ones. A year ago, sales included more foreclosed homes going for fire-sale prices.
Because of the market's volatility, anyone considering buying a retirement or second home in Florida should pay special attention to some key questions.
First, how easily can the balance of supply and demand change? On many of the barrier islands off the East Coast, for instance, there's not much room for further development, so it's unlikely a flood of new homes will depress prices in these areas. But in many areas just a few miles away on the mainland there's plenty of undeveloped land. As prices rise, developers tend to break ground on single-family homes and condos, and that new supply slows the price gains or reverses them.
In areas popular for retirement and second homes, condominiums are very popular, and condo fees can be very high. In fact, you could pay more in condo fees than you would on your new mortgage. In an economic downturn, growing numbers of condo owners stop paying their fees. The association may respond by skimping on maintenance or jacking up fees.
So potential buyers eyeing the warm winter temperatures in Florida should be especially attentive to the basic lessons of the recent housing crisis: A home is a home, not an investment. And the best way to minimize your risks is to resist the temptation to buy the most expensive home you can afford, and to plan to own it long enough to ride out the downturns.
Wednesday, January 16, 2013
Tuesday, January 15, 2013
Saturday, January 12, 2013
Strong Canadian dollar, U.S. real estate prices push Canadian snowbirds to South Florida
Canadian tourists have been flocking to Dairy Belle in Dania Beach all winter. It's a popular destination for visitors from the north. (Michael Laughlin, Sun Sentinel / January 10, 2013)
By Miriam Valverde, Sun Sentinel
8:25 a.m. EST, January 12, 2013
If he could, he surely would. Jacques Belair, a Montreal native, would live the rest of his life in South Florida.
"This is paradise,'' he said without hesitation from his Deerfield Beach condominium.
He's certainly not alone in making the trek south from Canada for the winter. As the February peak period for snowbird arrivals nears, South Florida is getting a bigger-than-usual boost from visitors leaving the cold behind, bank and tourism executives said.
More Canadians are heading south because of a "perfect storm.'' Canadian baby boomers can find great real estate deals in Florida and the strong Canadian dollar buys more in the U.S. than it could in recent years, said Alain Forget, RBC Bank's head of sales and business development. They're buying homes, enjoying the beach, having nice meals.
Simply put, they love being here.
"They want the lifestyle, they are on vacation, so they go around and shop around," said Forget. "They find everything they can buy here is so cheap."
Canadians are the No. 1 international visitors to Florida and the largest foreign buyers of second homes in the state, according to Florida government data. The latest available year-end data shows 3.3 million Canadians visited the state in 2011, up 7 percent from 2010. They spent about $4 billion, up nearly 14 percent from the year before, said Visit Florida, the state's tourism marketing agency.
Belair chooses to spent at least six months in his homeland and only November through April at his Deerfield Beach condominium so he can keep his Canadian health-care benefits. The 65-year-old tennis aficionado recently spent thousands of dollars upgrading his condo to "mint condition," he said..
All told, snowbirds from Canada and elsewhere spend more than $2 billion in Broward and Palm Beach counties each year, according to the county visitors bureaus.
In Broward, about 500,000 snowbirds visited last year, spending about $1 billion. This winter season, their spending should rise about 2 percent, said Jessica Savage, spokeswoman for Greater Fort Lauderdale Convention & Visitors Bureau.
In Palm Beach County, snowbirds spend about $1.4 billion per year, the visitors bureau said.
That money helps business owners like Sam Kantzavelos. His Fort Lauderdale restaurant, Greek Islands Taverna on Los Olas Boulevard, sees about a 30 percent rise in sales during winter months when snowbirds are in town. He sees a lot of Canadians this winter.
"It's affordable for them to come down," Kantzavelos said. "We lost more Europeans (this winter because of financial problems in Europe) but we got more Canadians."
In Dania Beach, owners of the Dairy Belle Ice Cream restaurant are investing about $3 million to expand facilities to serve such French-Canadian favorites as poutine, which features cheese curds and brown gravy on top of french fries. They've seen business rise about 20 percent annually in recent years, said co-owner Francois Grenier, and they see many Canadian tourists every day.
"We expect this season is going to be the biggest and most impressive that we've ever seen. It's just crazy busy," said Grenier, whose business got a boost from recent TV coverage in Canada.
Real estate businesses also are benefiting. Many Canadians are buying second homes inDelray Beach, Boca Raton and Highland Beach, according to Senada Adzem, director of the Douglas Elliman real estate company in Florida. She sells mainly multimillion-dollar properties, often to customers buying near the homes of their Canadian friends and family.
"They just fall in love with our weather and lifestyle," Adzem said.
Many more Canadians are buying less expensive condos. Belair said the French Alliance club of French speakers in his condo community, mainly people from Quebec, saw its membership rise about 16 percent last year. A key lure: warm weather.
"I'm just enjoying life here," said Belair. "Try surviving in minus 20 degrees."
Wednesday, January 9, 2013
Upturn in Florida real estate gets thumbs up from J.P. Morgan strategistA gradually improving economy, boosted by low interest rates and little risk of inflation, is on the horizon for 2013, saidStuart Schweitzer, J.P. Morgan Private Bank vice chairman and global markets strategist.
Thursday, January 3, 2013
Wednesday, January 2, 2013
Tuesday, January 1, 2013
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