Richard Webb
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eMail webb@4Brevard.com
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Let’s take a look at some of the opportunities and indicators for the future of Florida’s real estate market. |
- Long-term economic and demographic trends continue to favor Florida.
We are now the third most populated state in the country. Florida’s
population is expected to increase about 75 percent by 2030. Florida
demonstrates a long history of strong growth. It has been one of the
10 fastest-growing states in the U.S. for each of the past seven
decades, and often it has been in the top four, according to census
data. Population growth will continue to provide a foundation for
other economic growth such as new jobs and growing incomes. All
of which is good for real estate.
- People continue to move here. even during a recession.
- The new governor and legislature are demonstrating a commitment to
keeping jobs as their first priority. Our only competition is Texas.
- Let’s take a look at the weather. Brevard has never hosted a
hurricane. Not once. If you think the hurricanes other areas
experienced are going to have long-term effects on the Florida real
estate market, consider this tidbit from Fortune Magazine.
It recently reported, “Economists and geographers who have studied
how natural disasters affect real estate values have generally found
there to be no lasting impact.” Example #1: When
Hurricane Hugo hit Charleston, S. C., home values were actually higher
one year later. Example #2: That same year, 1989, a huge
earthquake made big news in San Francisco, and the same thing happened—house
prices went up. Its like nature's urban renewal. The rebuilding, paid
by insurance, rejuvenates neighborhoods and raises prices.
- Grant Thrall, a professor of what’s called Economic Geography,
explains this phenomenon this way—residents move away and home
prices fall only when natural disasters start becoming regular
occurrences in an area, not when they happen periodically. And
when the hurricane seasons of 2004 and 2005 faded in our minds, the
fact is, historically it was a fluke. Eight storms hit the
Florida mainland in those two years. But if you look back at the
50 years prior, only six Category 3 or higher storms hit the Florida
mainland in half a century. NONE hit Brevard, we only got side winds.
- Businessman-Governor. Rick Scott, state lawmakers and business
groups are committed to finding real solutions to make property
insurance more affordable in Florida, as well as much-needed property
tax reform. Florida Realtors will continue working closely with
lawmakers to help resolve these complicated issues and keep the state’s
economy moving forward. For example, 2007 Florida Association of
Realtors President Nancy Riley served on the governor’s property tax
reform commission, and 2005 FAR President Frank Kowalski served on the
governor’s insurance reform commission.
- Interests rates currently are extremely low, on a par with interest
rates in the 1960s. And due to the Fed’s rate manipulation, we’re
still seeing lower rates on mortgage loans, including jumbo loans. The
Fed’s action effectively increases the number of homebuyers able to
make a purchase, which should increase demand, and also help support
home prices. Home prices continue to stabilize, inventory is plentiful
and homebuyers have lots of options.
- Studies show that home equity is still the largest single source of
household wealth, both for the individual homeowner and for homeowners
as a group. Home value is the most important single aspect for
homeowners.
- Homeownership has value: Economists believe… and research supports
that belief … that homeownership provides a variety of benefits,
tangible and intangible, to the community as well as the individual
homeowner.
- Owning a home leads to increased personal well-being. Research shows
that people who own their own homes tend to show higher levels of
personal esteem and life satisfaction, which in turn helps to make
homeowners and their children more productive members of society.
- Studies show that children raised in homes owned by their families
are more likely to stay in school and more likely to graduate high
school. They’re also shown to have a higher lifetime annual income.
- People who own homes have a strong financial stake in what happens
to their community and tend to become more involved in community and
civic affairs. Studies show that homeowners also interact with their
neighbors to gain wider influence over their neighborhoods and
communities.
- Homeowners join up to 41 percent more civic and/or nonprofessional
organizations than renters, such as the PTA or Scouts; vote in local
elections 15 percent more often; enhance their neighborhoods with
gardens 12 percent more often; attend church about 10 percent more
often; and have a 3 percent greater chance of being interested in
public affairs.
- We know buying a home is a very personal investment – an
investment in a family’s future. Although research shows it is the
largest single investment most families make and helps to provide
security for the future, owning a home isn't just a financial
investment. Ownership is about having a place to call home: a place
where families build a future and become part of a community.
- Florida is a great place to live and work. According to Enterprise
Florida Inc., the Sunshine State has one of the nation's strongest
tourism industries; it is fourth in the nation in high-tech jobs; is
the third largest exporter of high-tech goods and services; and is
ranked as one of the best states in the nation to be an entrepreneur.
- Orlando-based economist Dr. Hank Fishkind said in several media
reports he believes that “the worst of the housing crisis has
probably been mitigated by the actions of the Fed. Recovery will take
a while, but it has begun.
- And let’s not forget the things that brought people to Florida in
the first place, and will continue to attract them – beautiful
beaches, fabulous weather and a friendly business climate, with no
state income tax. It’s no wonder that Florida’s combination
of temperate climate, outstanding recreational amenities and economic
opportunity has consistently put us at the top of Harris Poll’s “most
desirable places to live” survey.
More Ideas: Why It's a Great Time To Buy Real Estate in Florida!
Why It's a Great Time To Buy Real Estate in Florida!
Inventory: Our graphs indicate inventory is in historically short supply – which, of course, is a major great reason to buy now before prices rise further.
Favorable interest rates/reduced prices: Do the math. Lower rates multiply your’ financial power, especially now when rates are near a 40-year low. Even one/half of one percentage point difference means a buyer could save more than $1,000 per year on an low-priced home. Buyers get more home for the money, which is a perfect scenario for families.
Ownership trumps renting: While renting may make sense for someone who expects to move in the next year or two, ownership continues to be a wise, long-term investment. Consider these financial benefits: Deductions on your annual income tax return, locked-in payment with a fixed rate mortgage, home price appreciation if you plan to live there for a few years, and a low monthly mortgage payment comparable to rent payments. House values in the past decade have risen 88 percent on a national average, according to National Association of Realtor® research.
Attractive, secure financing options: Having good credit and secured down-payment capital are the most sure-fire ways to get the best mortgage deal. Fixed rates are more affordable, and many federally funded programs are available for first-time homeowners, teachers and police officers.
Help for first-time homebuyers
Financial value to foreign buyers: International buyers benefit from the weaker U.S. dollar, multiplying their purchasing power. Buyers also appreciate the relatively low costs of Florida property compared with similar homes in their countries. According the “2010 NAR Profile of International Home Buying Activity,” for 4 years Florida leads all the other states, accounting for 20 to 26 percent of all international purchases.
Location/lifestyle: With the extensive inventories in urban and suburban locales, buyers can live closer to work, schools and rapid transit lines. First-time homebuyers also have many affordable options in the townhome and condo markets. And let’s not forget Florida’s climate, world-class beaches, vibrant economy and diverse population.
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Richard Webb, Top Producer
Coldwell Banker Paradise, and Paradise / Ed Schlitt Realtors
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