To be sure, real state news from the Sunshine State has been anything but sunny of late. Some Florida markets are among the top in the nation for foreclosures. A recent Trulia report shows Jacksonville leading the way in price cuts on homes listed for sale. And the state is now facing its first population decline since 1946.
Based on statistics like these—constantly repeated in the national media—it’s easy to believe that Florida real estate is on sale for fifty cents on the dollar. Problem is, it’s just not true.
If you sell real estate in Florida like I do, I’m sure you’ve had an experience like mine. An old acquaintance from up north, or a lead from your web site, sends an email asking about oceanfront property. Inevitably, they’re looking for 1,500 to 2,000 square feet, 2 or 3 bedrooms, and in the range of $50,000 to $75,000.
This is the Florida real estate “perception bubble” at work. And I’m getting pretty good at bursting it.
Yes, I know. There are properties available in Florida that fit this description. But does the roof leak? Are there any assessments on the horizon? Is it a complex that’s less than half occupied where income from association fees doesn’t even cover trash removal? Is there mold in the units? Before you know it, that $50,000 condo is a $150,000 or $200,000 albatross. Bubble burst.
Worst of all, it may be this “fire-sale” mentality that’s driving prices in Florida down even more. In other states, buyers and sellers are starting to feel the bottom, and the gap between asking price and actual sales price is beginning to close. Much less so in Florida. Just look at the price reductions in the Jacksonville market.
Regardless of what the media states, Florida is still a great place to live. People are buying and selling property. But perhaps the media and buyers need to get back in touch with the concept of “caveat emptor”. Because if something sounds to good to be true–like a $50,000 oceanfront condo with no strings attached–you can be pretty sure it is too good to be true.