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December 2010

 
    December 2010

        Happy Holidays

            & New Year

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May your blessings be many and your golf strokes few in 2011.  Best wishes for a happy and healthy new year.


 

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Rediscovering Florida:  Warm winters and ridiculously low property prices may put shine back in the Sunshine State

      My grandparents moved permanently from the Bronx, NY, to a small home in Miami in the 1950s. Fifty-five years later, I have vague memories of that house, which had a canal running along the back edge of the small property.  (I caught my first fish there, an eel.)  My late parents spent three months of each winter in the 1970s and ‘80s in a condo they had purchased in Lauderdale Lakes.  So too did virtually all my friends’ parents from New Jersey, where I grew up.  The attraction of “Flahda” has always been its warm winter days, its ocean and beaches, although my parents never spent a single day on the sand in the 20 years they wintered in the Sunshine State (they preferred lolling around the pool with friends in their condo complex).
      For half a century, Florida grew like crazy -– emphasis on “crazy” since many besotted town planners mismanaged the explosive growth.  In the years from 2000 to 2006 alone, the state’s population grew by almost 400,000 annually, according to a University of Florida study.  Yet a host of factors caused a reversal of fortune for the state, culminating in a net population decrease in 2008, the first in more than 60 years.  The threats of hurricanes, increases in property taxes, insurance rate increases in the wake of Katrina and other storms, congested roadways, and an infrastructure that could not keep up with the population explosion all were factors in Florida hitting the skids.  What goes up must come down, and price charts for Florida real estate, especially Miami condos, for the last decade look like an inverted ‘V’ -– quick up and quick down.  
     Retiring northerners still covet warm winters, but in recent years, the comparably lower costs of real estate and taxes in Georgia and the Carolinas have caught the eye of snowbirds and permanent retirees.  A few cold days on Hilton Head or the occasional dusting of snow in Asheville are more than made up by a lower cost of living and fewer threats.  The “halfbacks” leaving Florida, those who originally fled New York and other northern cities and now are relocating halfway back, have been targeting North Carolina especially.  During my visit to Asheville a couple of summers ago, it seemed as if every other vehicle had a Florida license plate on it.  And real estate agents from Norfolk to Jacksonville tell me customers from Florida are as numerous as those from New England.

The Case for Florida

Real estate price drops of as much as 80% off peak are too much to ignore.

     Over-speculation kills housing markets eventually.  Speculation in land and condos in Florida was as intense over the last decade as it was in Arizona and Las Vegas, the other poster children for real estate crashes.  No golf community was more symptomatic of the fever of speculation than The Conservatory at Hammock Beach, the former Bobby Ginn developed property whose lots originally sold for as much as $500,000.  After the Ginn company loan defaults, lenders dumped some of the properties for what was owed in taxes – in some cases, the low five figures.  The property owners association at the Conservatory recently made the reasoned decision to downscale plans for the community and its homes; houses in the $300s will now rise where million dollar homes had originally been planned.  Plans for the Fred Couples designed golf course have been shelved in favor of more modest amenties.
     Over more than a half century, the arc of the pendulum of Florida’s fortunes swung so far to the positive end that a swing the other way was inevitable.  No one could have anticipated just how wildly, and quickly, the pendulum would swing back, but overbuilding, over-speculation and a drop in real estate prices in Miami, Naples and elsewhere of as much as 80% signaled the end of Florida’s boom.  Yet although the threat of hurricanes and oil spills may scare some people away, memories tend to fade in the face of deeply discounted water-view properties.  Prices in Florida today are simply too low to ignore, and those looking for bargain properties in a warm weather climate are already looking to Florida again.  The “re-migration” will only intensify as the economy improves.
      Florida’s fortunes may be boosted for other reasons too.  Its economy could suffer a big shot in the arm once the nation sorts out an immigration policy.  According to some 2010 census data recently released, Hispanic youth accounted for all of the U.S. population growth since 2000 in the under-20 age group.  Hispanics now make up nearly 25% of that population, up from 17% just 10 years ago.  As I write this, the U.S. Congress has voted not to consider the so-called Dream Act, which would grant a path to citizenship for college age (and younger) currently illegal immigrants, as well as for those who serve in our armed forces.  Long a magnet for Cuban, Caribbean and Latino American Hispanic immigrants, Florida’s economy would benefit as much as any other state from an ending to the uncertain status of tens of thousands of its youngest citizens if and when the Congress settles the issue.

Golf, golf and more golf

Florida boasts more than 1,000 golf courses, more per square mile than any other southern state.

     Even with the closure of many hard-pressed golf courses over the last couple of years, Florida still offers more golf than any other state, and by a wide margin.  At the beginning of 2010, according to research conducted by the Golf Channel, Florida’s 1,044 courses outpaced the much larger California (940), New York (833) and Michigan (824).  Florida ranked 7th in the survey in terms of courses per square mile, trailing half a dozen northern states in that category.  (Florida has .016 golf courses per square mile, which means you don’t have to drive far to find a one.)  But in January, would you rather play in Florida or Rhode Island, #1 on the per-square-mile rankings?  And because the growing season in most parts of Florida is virtually year round, conditions are certainly better than in the rest of the country.
     Florida’s supporters also make a comparative case by citing that other southeastern states could, like the Sunshine State, fall victim to their own attractiveness.  For example, many Floridians fleeing the state complain about traffic problems on their clogged highways; but anyone trading Naples for, say, Bluffton, SC, may be surprised to wait, as I did earlier this year, for more than five minutes to make a simple left turn onto Highway 278, just off Hilton Head Island.  And as more and more northerners and Floridians flock to the mountains of North Carolina, traffic is already building there.  One wonders how road engineers will figure out how to expand the two-lanes built into the sides of mountains and what western Carolina environmentalists -– a passionate and vociferous bunch -– will have to say about new roads being cut through unspoiled land. (Rockslides are common in some of the area’s golf communities.)
     The latest unemployment figures and the recently passed tax bill the U.S. Congress passed may spur a faster turnaround in the nation’s overall economy.  This will encourage baby boomers with the optimism and confidence to come off the sidelines, sell their primary homes, and follow their deferred dreams to retire in the southern U.S.  A drop in unemployment numbers and a little more investment by corporations will inspire the employed with enough confidence to consider the purchase of a vacation home.  Florida has always had warm winter weather going for it, but now it has added bargain basement real estate prices to its list of charms.  Although the state still faces its share of issues, the sun will shine again on the Sunshine State and on those retirees and second-home bargain hunters who do their research and scarf up the best Florida properties.

 

 

 

 

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