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Mary Theresa Bitti, Postmedia News,
May 28, 2011.
"The buyer got a great deal. It sold previously for $4-million. That was a 25% discount," says Ms. Prenner, who is seeing more and more Canadians closing deals in her stomping grounds, a popular spot for families with children. "Canadians have been looking for a long time and now they are buying -and, like 70% of high-end buyers, they are paying cash. They are here because they know now is the time to be here."
They are not alone. Southeast Florida, which stretches from Miami through Fort Lauderdale north to West Palm Beach, is calling investors from all over the world. "People from South and Central America, England, Ireland, France all want that little slice of Florida," says Jim Heidisch, president of the Realtor Association of Greater Fort Lauderdale.
Miami, Fort Lauderdale and West Palm Beach all have major cultural centres, museums, golf, beaches. The Metro Zoo is recognized nationally and Fort Lauderdale's Science Centre is a draw for young children. As a result, the demographics range from the young, urban, sophisticated CSI types to families and established retirees.
And the prices are attracting everyone. On a median-price basis, single-family homes in Fort Lauderdale and West Palm Beach are down from 30% to 40% from the peak in 2006, and off 50% for new builds. "In effect, prices are back to where they were in the mid to late 1990s," says Michael Bloom, a real estate broker in Boca Raton and Palm Beach County, a haven for golf lovers and empty nesters who are either retired or thinking about retirement.
While the whole Southeast Florida real estate market was heavily speculated during the boom, those areas that got the most overbuilt, the fringe suburbs farthest away from jobs, neighbourhoods such as Port St. Lucie in St. Lucie County, are where the price corrections have been the greatest.
The condo market in Miami Dade County was also a real magnet for speculators, who could put down a 10% or 20% deposit in 2003 and flip units at a premium once the building was completed two to three years later. "Those who bought early enough could make huge cash-on-cash returns," says Brad Hunter, chief economist and national director of consulting for Metrostudy, a market research provider to the housing and retail industries in the U.S.
"The demand generated from 2002 to 2005 caused a huge overbuilding of condos. But those who bought in 2005 had nobody to flip to in 2007/2008. From peak to trough, prices have fallen on average 50% plus, and that decline has turned on a lot of individual speculators, who are saying now is the time to buy."
According to Florida Trend magazine, sales of condos are up 55% in Miami Dade County over the past year, while prices are down 18%. "With little or no new construction happening, demand will become scarce and prices will start moving up," says Gary Coates of PMA Brethour in Boca Raton.
It's already happening. "I've had a lot of people
paying above appraised value because they know they can't find anything
as good for the same money," Ms. Prenner says. "Then prices
start to stabilize and eventually turn around."
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