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The upside of Florida real estate: 15 market positives
Jacksonville Ranch Club—05/06/2009—Let's take a look at some of the opportunities and positive indicators for the future of Florida's real estate market.
1. Great prices. Statewide, home prices have fallen 20 percent in the past year. FAR statistics show the existing-home median sales price was $185,400 in the third quarter of 2008, compared with $233,200 in third quarter 2007. By the way, those numbers are still significantly higher than in the early years of the decade: in 2003, the third-quarter sales price was $163,700, which reflects an increase of about 13.3 percent over the five-year period. (The median is a typical market price where half the homes sold for more, half for less.)
2. The time is right. Home sales volumes are rising again - a clear signal that today's "buyers market" may be changing soon. In third quarter 2008, statewide sales of existing single-family homes were up 5 percent compared to the same period last year, according to FAR statistics.
3. High inventory levels. Conditions are ideal for buyers to find their dream home. Inventory is plentiful in all price ranges. But as sales volumes increase, inventory levels are likely to shrink - another strong argument for buying soon.
4. Low mortgage rates. Mortgage rates are still at the lowest levels since the 1960s. That's important because lower rates multiply a buyer's financial power. Even one-half of one percentage point difference means a buyer could save more than $1,000 per year on a median-priced home. Buyers get more home for the money, which is a perfect scenario for families looking to upsize.
5. Incentives to buy. Federal, state and local housing programs can help buyers make that big purchase. The U.S. Housing and Economic Recovery Act of 2008 includes a $7,500 tax credit for first-time buyers on a home purchased between April 9, 2008 and July 1, 2009. Last October, Florida approved $571 million in tax-exempt bonds for loans to first-time buyers with low and moderate incomes. Florida programs can also help moderate income buyers cover downpayment and closing costs. Talk to a local mortgage lender about these and other incentive programs.
6. A long-term growth state. Long-term economic and demographic trends continue to favor Florida. By 2010 it has been forecast that Florida will be the third most populated state in the country. Florida's population is expected to increase about 75 percent by 2030. Florida has been one of the 10 fastest-growing states in the U.S. for each of the past seven decades, and often it has been in the top four, according to census data. Population growth will continue to provide a foundation for other economic growth such as new jobs and growing incomes. All of which is good for real estate.
7. A migration magnet. The University of Central Florida's Institute for Economic Competitiveness projects that 81,000 people will move to Florida in 2009 and 120,000 in 2010. Based on a 2.2-person household size, that means Florida will see increased demand for roughly 37,000 homes and condominiums in 2009 and 55,000 the following year. That's a lot of new buyers coming into the market.
8. A favored retirement destination. Over the long term, Florida stands to benefit from the migration of the aging Baby Boomer generation, roughly 80 million strong. Demographic studies show that the Sunshine State's mild climate and outdoor amenities continue to make it an attractive retirement destination.
9. A diverse economy. While the national economic downturn has definitely affected the banking and finance sector, other pillars of Florida's economy remain strong. Healthcare, tourism, education and government are stable components of the state's business environment, and the life sciences sector is fast becoming an important driving force in South and Central Florida. According to Enterprise Florida Inc., the Sunshine State is ranked as one of the best states in the nation to be an entrepreneur.
10. Positive investment outlook. Every quarter, the University of Florida's Bergstrom Center for Real Estate Studies conducts a survey of industry executives, market research economists, real estate scholars and other experts. In the third quarter 2008 survey, the investment outlook for various types of Florida properties remains steady. "People who have responded to our surveys have not lost their faith in Florida as a place to be and a place to invest," said Dr. Wayne Archer, director. "We have 40 pages of comments from our respondents, and although the dominant theme is the disruption of financing, perhaps the second theme, as one person put it, is people being on the sidelines with full pads and helmets just waiting to jump back in."
11. Homeownership has value. Realtors believe - and research supports that belief - that homeownership provides a variety of benefits, tangible and intangible, to the community as well as the individual homeowner. Studies show that home equity is still the largest single source of household wealth, both for the individual homeowner and for homeowners as a group. Home value is the most important single aspect for homeowners.
12. Greater well-being. Owning a home leads to increased personal well-being. Research shows that people who own their own homes tend to show higher levels of personal esteem and life satisfaction, which in turn helps to make homeowners and their children more productive members of society.
13. Good for kids. Studies show that children raised in homes owned by their families are more likely to stay in school and more likely to graduate high school. They're also shown to have a higher lifetime annual income.
14. Good for communities. People who own homes have a strong financial stake in what happens to their community and tend to become more involved in community and civic affairs. Studies show that homeowners also interact with their neighbors to gain wider influence over their neighborhoods and communities. Homeowners join up to 41 percent more civic and/or nonprofessional organizations than renters, such as the PTA or Scouts; vote in local elections 15 percent more often; enhance their neighborhoods with gardens 12 percent more often; attend church about 10 percent more often; and have a 3 percent greater chance of being interested in public affairs.
15. An unsurpassed lifestyle. Finally, let's not forget the things that brought people to Florida in the first place, and will continue to attract them - beautiful beaches, fabulous weather and a friendly business climate, with no state income tax. It's no wonder that Florida's combination of temperate climate, outstanding recreational amenities and economic opportunity has consistently put us at the top of Harris Poll's "most desirable places to live" survey.
Posted by Dave Lowe
Two4One.com
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