Shifts In Florida Real Estate Trends

For the past few years Florida real estate pricesresidential areas like Hernando County are gaining
have been reaching record highs, creating a marketmomentum by boasting reasonable prices with room
where investors could buy low and sell high almostfor appreciation. Preconstruction investment in
overnight. But now, as supply has finally surpassedHernando has proven profitable and safer than
demand, real estate values are declining and investorinvesting in existing real estate during the Florida
interest is dwindling. In June, 2006, home sales weremarket's state of price and appeal descent. Whereas
down 30% statewide while condo sales decreasedinvesting in a declining market is usually very risky,
35%. In Naples, Florida - the area with the highestpreconstruction investing provides a cushion against
real estate prices in the country with the averagesuch hazards.
single-family house priced at over $450,000-realWhen investing in preconstruction real estate, the
estate sales dropped a whopping 48% while pricesdown payment-which is much lower than that of a
fell 8%. New luxury condominium resort complexestraditional investment-is kept secure in escrow until
had been popping up all over the state, but condothe development is finished, keeping the investor's
sales dropped 31% in both Miami and Ft. Lauderdalemoney safe even if the development fails. Since
while Tampa was hit even worse with a 47% decline.preconstruction projects are not advertised, these
Major urban areas like Orlando, Miami, Tampa, and Ft.early phase properties are also impervious to
Lauderdale are becoming overcrowded andcompetition-incited price increases. Preconstruction
unaffordable to most potential buyers, so investorpurchasing also allows investors to flip their properties
interest is shifting to less developed regions in thefor significant profit when the prices increase at the
state that have not fallen victim to exorbitant pricescompletion of construction.
and uncomfortably dense populations. Predominantly