March 7th, 2010

Florida Home Prices are Affordable for Many…But Don’t Get Your Hopes Up.  New reports indicate that the price of a home in Florida could be $250,000 or less.  Some 66% of the resale townhome and condo inventory in Palm Springs, Miami-Dade, and Broward Counties are at or below this threshold.

Even though $250,000 is a lot of money, it’s still much more affordable than the previous home prices experienced in these areas.  With the lower cost of living, realtors and those trying to sell property could see inventory starting to move…but then again, market conditions are still far from optimal.

Those desiring a single family detached property will still have to pay a little bit of  a premium. Only 40% of the inventory is at or below $250,000.

Before getting excited about the prospect of an affordable piece of Florida real estate, it’s important to note that 75% of the single family homes under $250,000 are short sales, and 2/3 of all short sales ultimately fail.  Only 2,500 properties available on the market under the price range are available for shoppers.

Still sounds like a great situation, but those shopping that need a mortgage on their properties may discover quickly that investors are snatching up these deals using cash.  Sellers are more attracted to a cash sale than a sale to someone else that needs a mortgage.

What about foreclosures? Many of South Florida’s foreclosures are in shambles after months of no air conditioning.  A bank will not lend money against a property in bad condition. Inexperienced buyers with only a small amount to put down are not in the position to fix what needs to be done to a house.

Those that need to purchase a home in South Florida will need to be patient. Investors will likely snap up the super-low priced units, fix them up, then resell them at market rates. First time buyers will typically have to purchase a home at market prices.  Still yet, the home prices in Florida are much lower than they were a few years ago.

Source:

Florida Association of Realtors