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The Florida Real Estate Market: On The Bubble Or Buyer's Dream?

Aug 17, 2007
It's hard to miss all of the recent media coverage regarding the US housing market. Analysts have predicted a cooling off period after nearly five years of soaring prices, bidding wars, and a housing market that became a seller's playground. According to the latest numbers, these predictions are proving to be accurate.

At present, the number of unsold homes throughout the US has risen to a record high. Mortgage rates are currently at an average of 6.6% for a 30-year fixed loan, the highest rates in nearly four years, and the average sale price of a home has dropped to $238,000 nation wide.

The Florida real estate market has not been immune to these changes. Like most other areas of the country, a flood of homes on the market in Florida and dropping sale prices have created a different kind of market. While this current cooling trend may be worrisome those with a house currently on the market, it is great news for the Florida home buyer.

Taking Advantage of a Buyer's Market

For the Florida home buyer, the real estate market of the past five years has been a roller coaster ride of indecision and worry over sharply rising housing costs. Buyers were forced to make immediate offers on prospective homes, often ending up engaged in a bidding war with other buyers. Time to shop for the perfect home was extremely limited, while sellers were reaping record profits in the boom market.

Today things have changed a bit in the Florida housing market. Homes are sitting on the market for a much longer period of time, leaving sellers with the opportunity to comparison shop and find the home that is truly right for them. With the flood of existing homes on the market and new home builders looking to incentive programs and price reductions as means of attracting new buyers, there has rarely been a better time for the Florida Home Buyer.

Creative Financing for the Florida Home Buyer

Seller financing, which saw the greatest level of popularity during the 1980's, is a returning trend in today's housing market. Unlike the 1980's, sellers are not offering financing of this type to counteract sky-high interest rates, now the purpose of seller financing is to shield sellers from capital gains taxes in an era of record home sale profits.

Despite a cooling market, sellers are still gaining huge returns on their initial investment once they sell their home, and offering to carry all or part of the financing is a way to spread out gains and avoid hefty tax rates. This finance option is beneficial to buyers because sellers will often finance at slightly lower interest rates, and buyers do not have to worry about costly appraisals, application fees, and mortgage points.

Trends in Florida Home Buying

Purchase of existing homes with intent to remodel remains a popular option for Florida home buyers. Newly constructed home sales also remain robust, especially high quality custom homes that are built above hurricane code.

According to the latest predictions from the National Weather Service, the 2006 Atlantic hurricane season is expected to bring up to sixteen named storms, and as many as six major hurricanes. These numbers are slightly lower than the 2004-05 seasons that brought devastating storms such as Katrina, Rita and Dennis, the fact remains that even if only one major hurricane impacts the US coastline, it is a bad season for the residents of that area.

This is why homes built of solid concrete with additional roof truss straps and impact resistant windows remain so popular with Florida home buyers. And in the current market conditions, these homes are more affordable than ever.

Many custom Florida home builders are presently offering reduced sale prices and additional amenities, features and incentives to attract new buyers in a cooling market. Depending on the time of year and amount of homes a builder must sell, it is possible for the Florida home buyer to find fantastic deals on these high quality homes.

Good News for Florida Home Sellers

The outlook for Floridians looking to sell their homes is not all bad. Sellers are still reaping record profits from their homes, and home sales were actually up in the month of April. It may take longer to sell a home, but there are still buyers out there who are eager to invest in the Florida real estate market.

Florida realtors are also beginning to tap a robust international market. Buyers in Europe, Asia, South America and other countries are eager to invest in industrial, commercial and residential properties throughout Florida. New marketing strategies include international conferences where Florida realtors can present their listings and investment opportunities to these buyers.
About the Author
Concrete Florida Homes survive hurricanes - Tom Beaty a real estate broker and
home builders in Palm Coast, Flagler and Volusia County. Visit: Florida real estate or Florida home
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