Snow­birds bring­ing cash to Florida

Cana­di­ans snap­ping up bar­gains

Calgary Herald - Calgary Herald New Condos - - Recreation & Investment Properties - PETER KENT­NER

Cana­dian buy­ers con­tinue to snap up Florida real es­tate, says a re­cent sur­vey of for­eign buy­ers pro­duced by the National As­so­ci­a­tion of Real­tors on be­half of the Florida Real­tors as­so­ci­a­tion.

The sur­vey tracked for­eign buy­ers for a 12-month pe­riod from mid-2010 to mid-2011.

“For that pe­riod, one in four Florida homes was pur­chased by a for­eigner, and the largest sin­gle coun­try rep­re­sented was Canada,” says John Tuc­cillo, chief econ­o­mist for Florida Real­tors. “Cana­dian sales rep­re­sented 10 per cent of all home sales in the state dur­ing that pe­riod.”

Cana­dian buy­ers were look­ing for bar­gains with the me­dian price of homes pur­chased at a lit­tle over $151,000 US.

More than 90 per cent of those deals were com­pleted strictly with cash.

Al­most two-thirds of Cana­dian buy­ers tar­geted homes in f ive lo­ca­tions — Tampa St. Peters­burgClear­wa­ter, Mi­ami-fort Laud­erdale Mi­ami Beach, Or­lando Kis­sim­mee, Naples-marco Is­land, and Cape Coral-fort My­ers — all in the south­ern half of the state that was hit par­tic­u­larly hard by the hous­ing down­turn.

The price of a typ­i­cal south Florida condo has fallen by 45 per cent since 2005, says Tuc­cillo.

“There’s still strong de­mand at both ends of the price spec­trum,” he says. “We’re see­ing a lot of ac­tiv­ity on the part of in­vestors with a long-term view in the lower half of the mar­ket. The de­mand for higher-priced prop­er­ties has also held up rea­son­ably well.”

Cana­di­ans rep­re­sent about 30 per cent of buy­ers in Naples, a pop­u­lar Gulf Coast desti­na­tion.

“We’re smaller than Mi­ami and the beach is very ac­ces­si­ble,” says Tom Doyle, a real­tor with Sun Realty in Naples. “There’s no re­tail area block­ing

MVisit our web­site un­der the head­ing, ‘Rec Prop­er­ties,’ for more photo gal­leries and sto­ries. off the wa­ter­front — you can’t get a tat­too on Naples Beach.”

Doyle says Cana­di­ans typ­i­cally snap up two-bed­room con­do­mini­ums built in the late 1980s and early ‘90s near the beach at an av­er­age of $150,000.

Right on the beach, though, “it’s a sell­ers mar­ket, with homes go­ing for up to $22 mil­lion,” says Doyle.

Naples hous­ing prices are sta­bi­liz­ing as de­mand rises, he says.

“Our in­ven­tory is half what it used to be and any­thing worth­while gets snapped up, most of it in cash trans­ac­tions. You can’t buy any­thing at the price it sold for last year.”

The Fort Laud­erdale su­per-lux­ury mar­ket is also re­bound­ing, says Kelly Drum, part­ner in that city’s fam­ily-owned Drum Realty.

“The mar­ket was a lit­tle flat, but it’s com­ing back with prop­er­ties in the $4 mil­lion to $20 mil­lion range in our list­ings,” he says.

Drum notes that prop­erty own­ers in the Fort Laud­erdale lux­ury mar­ket are un­der lit­tle pres­sure to sell.

“These are typ­i­cally peo­ple who have an in­ter­est in sim­ply putting their money some­place else,” says Drum. “Prop­er­ties that might have at­tracted $15 mil­lion in 2006 and 2007 may only sell for $10 mil­lion to­day, so the chal­lenge is get­ting the own­ers to list the prop­erty to re­flect the re­al­ity of to­day’s mar­kets.”

In June of 2010, Drum sold a prop­erty to a Toronto buyer for $7.64 mil­lion.

“It was a spec­tac­u­lar prop­erty with water on three sides — like its own pri­vate is­land,” he says. “The gen­tle­man pur­chased it just for the land and tore down a 15,000-square­foot house to build a new 18,000-square-foot home.”

Ac­cord­ing to U.S. real es­tate in­for­ma­tion spe­cial­ist Tru­lia, the me­dian price of all prop­er­ties sold in the Fort Laud­erdale mar­ket was $160,000 dur­ing the quar­ter end­ing in Septem­ber.

That’s up al­most 12 per cent over the same time last year, but down slightly since the pre­vi­ous three months.

Drum doesn’t deal in dis­tressed real es­tate but notes that fore­clo­sure sales are still com­mon in the lower-end mar­ket.

“If I was a Cana­dian buyer, I’d come down with cash,” says Drum.

“A cash buyer compet- ing with a mort­gage con­tin­gency buyer could still walk away with a prop­erty at a dis­count, even if that buyer was will­ing to pay list. Cash com­mands very at­trac­tive deals in this mar­ket.”

Although ge­o­graph­i­cally part of south Florida, Key West is a mar­ket all to it­self. Ex­pect to in­vest hours in travel time from the main­land, ei­ther by car, air or ferry.

In Key West, all real es­tate is in the high end,” says Cory Held, a real­tor with Pre­ferred Prop­er­ties/ Coastal Realty in Key West.

Stately lux­ury homes rang­ing to about $10 mil­lion grace the com­mu­nity’s Old Town, while ren­o­vated homes rang­ing from $500,000 to $2 mil­lion are found in New Town.

The com­mu­nity re­mains un­der a Rate of Growth Or­di­nance that sees few new prop­er­ties en­ter­ing the mar­ket and lim­it­ing sup­ply.

“High-end prop­er­ties used to move much more quickly,” says Held. “Now prop­er­ties sell­ing at $2-mil­lion may re­main on the mar­ket for a year or two — bear­ing in mind that might be a small house on a small prop­erty in Key West.”

Two years ago, Held sold a 5,400-square-foot home “that looked like Tara” with pool, two guest houses and beach ac­cess for $1.76-mil­lion. It had pre­vi­ously sold for $5.4 mil­lion.

By com­par­i­son, a sim­i­larly ap­pointed 3,440-square-foot home, with two guest houses, four bed­rooms, four and a half baths, pool and li­brary has been of­fered at $2,999,999.

“I’m cur­rently work­ing with a cou­ple out of Toronto who own a condo unit here and they’re look­ing at buy­ing some­thing else,” says Held.

“I’m en­cour­ag­ing them to hold onto it as an in­come prop­erty and to buy an additional prop­erty. I’d ad­vise any Cana­di­ans en­ter­ing this mar­ket to come with a cer­tif ica­tion of funds and to buy lit­er­ally as high as you can af­ford.

“Key West re­mains very de­sir­able and prices will def initely bounce back.”

There are bar­gains to be found through­out Florida, although it might mean look­ing be­yond your ideal lo­ca­tion.

Tuc­cillo’s ad­vice to Cana­dian buy­ers: “Look for a lower-priced home in a good lo­ca­tion that’s ac­ces­si­ble to water and golf cour­ses. If you can’t af­ford a lo­ca­tion like Naples, move a lit­tle north to the Fort My­ers-cape Coral area to f ind bar­gains.”

Peter Kent­ner for Postmedia News

As the flat, high-end mar­ket be­gins to bounce back, real­tor Kelly Drum of Fort Laud­erdale is sell­ing again. ‘If I was a Cana­dian buyer, I’d come down with cash,’ he says.

Cal­gary Her­ald Ar­chive

A pre-fore­clo­sure sign on a home in Florida in 2009 near the be­gin­ning of the re­ces­sion.

Cal­gary Her­ald Ar­chive

Florida’s beaches, warm weather and good hous­ing prices are among the rea­sons Cana­di­ans are buy­ing in the state.

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