Guide to Buying Property in Florida
Property for Sale in Florida
The Florida market continues to experience strong demand from domestic and international investors with the supply of US residential property slowly catching up with demand. A weakened Dollar continues to deliver a favourable exchange rate with Sterling, and is forecast to remain above $1.83 until the end of 2007 (Source: RBS Interest & Exchange Rate Forecast, November 2006). In addition, historically low long-term interest rates are creating good conditions for external investors to capitalise on the potential gains available from investing in US real estate.
Capital growth in the Florida real estate market reached 15.11% for the 12 months to 30th September 2006, positioning Florida as the 6th fastest state in the US for capital growth in the last reporting quarter and well ahead of the US average of 7.75% for the year.
Both the Office of Federal Housing Oversight (OFHEO) and the Florida Association of Realtors (FAR) report that the Florida property market has grown by in excess of 100% over the past five years - a truly exceptional performance for any property market. In addition, over the last 12 months (to Sept 30th 2006) the Orlando-Kissimmee market grew by 18%, one of the best performing markets in the whole of Florida.
From experience in other property markets, a period of strong growth will normally be followed by a slight softening / stabilization in the market as double figure growth can’t be sustained indefinitely.
However, given the dynamics and drivers of the Orlando marketplace it is anticipated that the Orlando area will continue to outperform other areas of Florida during 2007.
A recent report from the Florida Association of Realtors (NAR) reports:
“Home sales are projected to ease modestly but should stay within a relatively narrow range over the balance of the year - signs that the market is stabilizing, according to NAR housing industry analysts. Still, NAR expects 2006 to be the third strongest sales year on record. Analysts note that the housing market continues to provide a strong foundation to the economy even as the market adjusts, while slower appreciation assists in preserving long-term affordability.”
Whilst the rate of market growth will slow over the coming months, there still remains a significant opportunity for property investors to achieve good capital growth over a medium to long-term time horizon. Indeed, the recent article published in the Sunday Times (13th August 2006) even closes on this point by saying “with the US dollar at current levels, this may be an opportunity for anyone who wants to hold the asset for the longer term.”
Within Central Florida there remains a fundamental limit to the supply of prime (developable) real estate within a 15/20-minute radius of the Disney complex. Planning timeframes are such that it can take 2¬5 years to achieve the necessary zoning, planning and permits to convert agricultural land into a developable real estate.
Data from Visit Florida indicates that Florida received over 85m visitors during 2005, and is projected to undergo further strong growth in future years. In addition, recent research shows that 68% of British visitors to Florida visit Orlando, the home of Disney World and many other major attractions making this Florida’s most popular destination. For this reason, Orlando is an important investment area for Instant Access Properties. Increasing numbers of tourists means increasing levels of demand for rental property within the Orlando area which in turn will continue to drive capital appreciation.