Shifts in Florida Real Estate Trends

For the past few years Florida real estate pricesprices and uncomfortably dense populations.
have been reaching record highs, creating aPredominantly residential areas like Hernando
market where investors could buy low and sellCounty are gaining momentum by boasting
high almost overnight. But now, as supply hasreasonable prices with room for appreciation.
finally surpassed demand, real estate values arePreconstruction investment in Hernando has
declining and investor interest is dwindling. In June,proven profitable and safer than investing in
2006, home sales were down 30% statewideexisting real estate during the Florida market's
while condo sales decreased 35%. In Naples,state of price and appeal descent. Whereas
Florida - the area with the highest real estateinvesting in a declining market is usually very risky,
prices in the country with the averagepreconstruction investing provides a cushion
single-family house priced at over $450,000-realagainst such hazards.
estate sales dropped a whopping 48% whileWhen investing in preconstruction real estate, the
prices fell 8%. New luxury condominium resortdown payment-which is much lower than that of
complexes had been popping up all over the state,a traditional investment-is kept secure in escrow
but condo sales dropped 31% in both Miami anduntil the development is finished, keeping the
Ft. Lauderdale while Tampa was hit even worseinvestor's money safe even if the development
with a 47% decline.fails. Since preconstruction projects are not
Major urban areas like Orlando, Miami, Tampa, andadvertised, these early phase properties are also
Ft. Lauderdale are becoming overcrowded andimpervious to competition-incited price increases.
unaffordable to most potential buyers, so investorPreconstruction purchasing also allows investors to
interest is shifting to less developed regions in theflip their properties for significant profit when the
state that have not fallen victim to exorbitantprices increase at the completion of construction.