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