Reasons Why Florida's Housing Market Will Continue to Prosper

No matter how much the drive-by media wants to spin the current housing slow down, one thing those of us who live in Florida know for sure, people will continue to flock to the Sunshine State no matter how much doom and gloom the pundits currently espouse. And, it doesn't take a rocket scientist to understand why. A simple look at the numbers mixed with a little common sense is all anyone needs to see the forest for the trees.

First and foremost, if you read a newspaper or watch cable television, you'd have no choice but to think that absolutely no one is buying houses anymore, especially in Florida. And, while it is a fact that the sales numbers are down from the boom in 2005-2006, the reality is sales are still occurring at a pretty respectable pace. Just look at the most recent sales statistics. For the 3rd Quarter of 2007 almost 32,000 existing single family homes and 10,000 existing condos sold statewide. Are these numbers down from last year? Of course they are. Both are off by about 30%. But the fact remains that 40,000 properties changed hands and that 2007 is on pace to be the 5th best year for housing on record.

Next let's take a look at what is going on with inventories and prices. Perhaps the most glaring cause of the record numbers of 2005-6 was investors buying to make a quick buck and builders responding to what most everyone else knew was a short term event. The result was when the buying switch was turned off, the number of properties available went through the roof. When you add in the people who put their homes on the market during Season, and at utterly ridiculous prices hoping some schlep will buy their property at their unrealistic asking prices, we appear to have much more inventory than we really do. Thankfully, most builders drastically reduced their asking prices and actually moved a lot of their new home supplies. In addition, many investors either took the hit and lost their investments to foreclosure, lowered their asking prices and sold their homes at a loss, or joined in the recent rental boom holding their properties for longer term investments until the market changes again. The unrealistic sellers either are still living in la la land or don't really have to sell and that just skews the numbers for those who are actually trying to sell their properties.

For those buyers looking to purchase in Florida, prices are down substantially and with a little help and effort on their part, many extremely good deals are there for the taking. The 3rd Quarter statewide median existing home price was $232,100 and the existing condo median price was $196,300. Both values were down year over year by 6% & 4%, respectively, but these prices still represent an average 64% increase in value for those who have owned their properties for 5 years or more. Not a bad return on their investment by any account. If you look at historical yearly real estate averages, a 3 to 5% return on your investment is normal and here in Florida, long term property owners have actually more than doubled those averages. Of course, no one can predict that this will hold true for the next 5 years, but if you look at what the positives are for owning property here in Florida, the chances are better than average you'll do better here than in many other places around the country.

Here's why. With its wonderful year round weather, the Sunshine State is a magnet for retirees. With 76 million baby boomers on the verge of retiring in the near future, how many do you think will look to Florida with a gleam in their eye? The Census Bureau estimates that if just 5% choose to spend their golden years here, the population would increase by 3.8 million new residents. Current numbers tend to support this conclusion. From 2000 to 2006, annual net population growth averaged 350,000. While state forecasts for 2008 are for an increase of only 325,000, the Census Bureau data reveals that Florida will rank third in terms of population by 2010 and boast 28.6 million residents by 2030. Considering these forecasted numbers, how can you not see that Florida properties will continue to be in demand?

So, you have to ask yourself, is now a good time to consider buying your dream retirement or vacation home in the Sunshine state? We'd say you have to be crazy not to answer "Yes," and that you'll be sorry if you sit around and wait for the bottom to drop out of the market. The likelihood of that happening is slim based on a review of the numbers. Buyer's markets work just like Seller's markets. If you get too greedy in either case, you'll be sorry you didn't act when you had the chance.

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