An attraction of unprecedented generosity
Gary Kenny, an employee of Coldwell Banker, has been involved in real estate in Orlando, one of the most popular cities in Florida, for more than a decade and notes that selling houses in this region has always been quite easy. Today, his team has been reduced from 40 to 25 people, and Gary Kenny himself confirms that the average monthly sales volume has halved. But despite numerous gloomy forecasts regarding the impact of the economic crisis in America on real estate sales, he remains optimistic: "Real estate is still selling well, and if anywhere you can keep the market at the right level, it's in Florida, because this is a win-win option for those who are looking for a place with maximum sunny days and an amazing standard of living."
One of the properties, whose value was recently reduced from $230,000 to $224,900, is ideal for investing in Florida real estate. This lakeside home in Davenport is just 10 minutes away. from Disney World and close to championship golf courses. A heated swimming pool is located on the territory of this fully furnished three-bedroom villa with vaulted ceilings. This year, the house is booked by tenants for 34 weeks, that is, by 65%, which makes it a very profitable object from the point of view of renting.
In the secondary housing market, you can find offers at really low prices, however, new housing is very attractive – although, according to Gary Kenny, this applies more to apartments than to houses: "You will not find such profitable offers for individual houses, because companies simply stopped building them due to the crisis. Developers engaged in the construction of apartment complexes cannot stop work: once they have started the construction of the building, they must finish it." Looking closely at today's offers, you can see that developers do not mind giving in to the buyer in price. Thus, discounts are provided for legal fees, administration and financing, in addition, developers often consider even counter-offers.
Some buyers continue to wait, hoping for a further decline in the American market, but Gary Kenny calls this a dangerous game. "The only way to know that the market has reached its lowest point is to mark its beginning growth, but then it will be too late."
The surviving market
The opportunity to profitably purchase real estate is a good bait to head to Florida in search of, however, buyers who need credit will face the fact that it has now become quite difficult to get it in the United States. Mortgage lending has been "significantly limited," according to many agents, and banks require larger down payments before issuing a loan. Real estate should always be considered as a long-term investment, and most resellers believe that the recession that has engulfed America is unlikely to subside before the end of 2008.
However, in the United States, not all regions have been equally affected by the economic downturn. According to Charles Pearles, Winkworth's international manager, the crisis has affected Orlando to a much lesser extent than other regions: "The situation in the American market has not been the best for the last 18 months. The only exceptions were New York, Las Vegas and Orlando: in 2006, real estate prices in Orlando increased by 6.2%, and in the first half of 2007 - by another 2%."
According to Charles Pearles, there is now a powerful surge of interest in Orlando: "Six months ago I had to go there urgently – and I couldn't find a hotel where I could stay," he says. – The local conference market is very strong, the city claims to be the number one conference center in the United States. Orlando is not only a Disney theme park; 52 million people visit this city every year, whereas, for example, New York receives 2 million guests."
The Winkworth Agency offers for sale the Heritage Keys project, located near Orlando, in the city of Kissimmee. The project is supported by the USSSA National Sports Association; the complex will house a fitness room, a swimming pool and a clubhouse. You can purchase three- or four-bedroom villas in Heritage Keys for prices starting at $280,000.
Buying is better than selling
Of course, Florida is not just Orlando. Russian buyers have always liked the spacious beaches of Miami, and Europeans love Fort Lauderdale, as well as the exquisite and prestigious town of Naples on the west coast. Sellers sometimes have to lower prices here, but mainly because they were too high. Buyers may be cautious, but thanks to the low dollar exchange rate, now is a great time to buy, in which 100% of the cost is paid immediately.
Charles Pearles urges buyers to consider the current situation as favorable in order to purchase real estate in the best areas. So, South Beach in Miami today offers a lot of interesting new projects - it's really a wonderful area, and its popularity will only grow."
Stuart Lowe of Assetz recommends that those who plan to purchase several properties start acting today and advises investors to keep an eye on the market, continuing to make counter offers to feel the perfect moment to buy. "It is possible that the cost of houses in the United States will still fall, however, fluctuations in exchange rates can easily provide an additional discount of 10% from today's prices," he adds.
Mark O'Sullivan, a representative of Currencies Direct, agrees that the current situation in the United States opens up excellent opportunities for buyers from other countries. However, he warns anyone who is going to invest in Florida real estate, still do it with a long-term view. "Be realistic. This is by no means a speculative market, and you will not be able to easily "dump" real estate, receiving an additional income of 15% of its value. However, if you want to buy a great vacation home or a rental property, then feel free to go there – and you will certainly find many great offers," he says.
Many foreigners attend real estate auctions, which sell properties whose foreclosure rights have been lost by private owners or investment companies. The starting prices at such auctions are significantly lower than the market prices. "The cost depends on how stressed sellers are and how quickly they need to get out of a difficult situation," adds O'Sullivan. He advises clients to buy dollars now and hold them, waiting for the appearance of a really interesting object.
When buying, you should also think about how quickly you can resell the property. Florida's land reserve is huge, and the entire state is dotted with thousands of identical homes. To increase the chances of selling, it is worth being interested in unusual objects, but this will not necessarily help, because in the current situation, it is enough for only one seller to lower the price so that others follow his example. "Imagine you're trying to sell your property for $300,000, but if your desperate neighbor puts up his house for $200,000, you lose all chance," says Mark O'Sullivan.
Carol Chant, an employee of Dream Homes Orlando, is one of those who seeks to sell their real estate in Florida, but she decided not to lower the price, although she had already received a counteroffer for the purchase. Last year, a stunning five–bedroom villa in Calabay Parc with an outdoor shower, spa and pool surrounded by a wooden terrace was estimated at $460,000, and today it is only $369,950. The villa has become too big for Carol Chant, whose children have already grown up; the house is conveniently located at the end of the road, near the woods, in Davenport, a new shopping center is being built next to it. "This will be a great deal for someone, as buyers will be able to purchase a house at the same price they would have paid four or five years ago. We may accept a counteroffer, but it has to be reasonable," says Carol Chant.