Real Estate: Investing Today? Florida's Recovering Real Estate Sector
The combination of continuing unemployment and tighter lend- ing restrictions has drastically shrunk home values in Florida. The annual threat of hurricanes add another blow to the strug- gling real estate market. However, instead of the seemingly nev- er-ending doom and gloom, real estate agents are stating that home sales significantly increased in 2010.
Does this mean it's now safe to buy a home in Southwest Forida?!
There is no direct answer to this question because it involves indi- vidual situations. It depends on your present and future financial ca- pability to make monthly mortgage payments, the type of house that you are buying, current market value and loan terms. If you're able to qualify for financing with attractive interest rates and don't fore- see any negative financial change in the near future, then the answer to this question is 'yes'. Many locations in Florida now have condos, townhouses, and waterfront houses at very attractive prices. If you're interested in investing in SWFL real estate, most locations have homes that are being sold well below market value.
Is this news too good to be true? How is it possible to buy real estate in Florida so far below market value, when it was not possible a few years ago? Although it might seem suspicious to be able to purchase a house in Florida for less than $100,000, this is the trend in most counties in the state. The real estate sector in SWFL is blooming with properties listed at far below the stated value, and some banks are putting forth irresistible financing options for the buyer.
To fully understand why this change has taken place, it’s necessary to remember where Florida's real estate market has been. In years past, people easily acquired real estate with the flexible lending options available at the time. The recent recession and global financial crises forced many families to fall behind on their mortgage payments. After a few defaulted payments, banks seize the property and put it up for auction. If the house is not sold at auction, the bank retains owner- ship, giving rise to numerous 'bank owned properties' on the market. Short sales and foreclosures resulting from the the financial crises are other common ways that people lose their homes.
As this scenerio continues to increase and lenders attempt to recoup their losses from defaulted mortgage payments and lost clients, many properties have become available at lower market values. Although a number of properties continue to be sold at market value, it's much less than those sold at lower values, but at least. Now is the time to take advantage of the many deals currently on the market!
If this pace continues, SWFL will eventually regain its past real estate pattern and home prices will increase. In fact, as foreclosure invento- ries continue to drop and home prices rise, the gap will close between existing home sales and new construction costs. Since there haven't been significant numbers of new homes built over the last three years, we should also expect to start seeing the return of new construction.
PULSE MAGAZINE ---------- 34
BUSINESS CORNER
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