Cooling Florida market still hot with Brits?

Heightened wariness of the hurricane season provoked by Hurricane Katrina’s devastating effects the other year, along with the continued rise of property prices throughout America are causing Brits to think twice when it comes to investing in a second home in Florida.

New home sales have dropped in the Sunshine State by over 21 per cent in the past 12 months since the beginning of the year sales in Florida have dropped from 796,000 between January and August 2005 to 682,000 in the same period of 2006.

Nevertheless, prices of property in Florida have continued to rise. In the past three years alone the average price of a medium-sized family home in Orlando has risen from $145,100 to its current price of $271,700 - an annual growth rate of 17 per cent. In fact, since January 2006 prices in Orlando have risen by an average of $11,000 (Source: National Association of Realtors).

Florida is a major second home destination for Brits for as long as Mickey Mouse has had an interest in Minnie, and increasing prices won’t change this overnight. The pull of the state’s major theme park attractions and the picturesque beaches of the Gulf Coast has continued to woo thousands of British visitors every year, not to mention those who come to stay for good. Brits tend to look for second homes in specialised resorts where they can spend up to six months of the year in and rent out when they are not using these.

Despite the fact that increasing costs are beginning to price some people out of the market, holiday home developments aimed at Brits have continued to spring up all over Florida throughout 2006 and, according to Suzanne Morill from property agents World of Florida, this is something that might just play into the Brits hands. Morill says that even though it seems that Florida is on a slow down compared to 18 months ago, there is no doubt that it still represents good value for money, particularly if one is looking for a long-term investment. There are currently plenty of good deals as a result of the slower market. Although these have flattened out somewhat compared to recent years, given time prices throughout Florida will undoubtedly continue to rise.

Indeed, builders in Florida have hinted that they will be cutting prices in the region to stimulate demand and it might just be the change that is needed to tempt Brits back across the Atlantic with their wallets in tow.

Already a number of developers are offering incentives as an enticement to overseas property investors. In the Cane Island resort near Orlando, DR Horton is offering up to $20,000 off selected condominiums within the compound and $3,500 in closing cost contributions.

Another option for investors looking to attract regular rental yield is the condo hotel. These are self-contained apartments within a large hotel, suitable for vacationing families. FCH Realty has a number of condo hotels available in the New Reunion and Champions gate area of Orlando. The condos are fully approved for short-term rental and are situated just a few minutes drive from the Disney World resort. The retail price starts at around $334,000 but some condos are being pre-released at a price of $249,849.

Posted on: Florida

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Cooling Florida market still hot with Brits?

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