Palm Beach Real Estate Presales, Pre-Construction Florida Condominiums, Waterfront Properties

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Sub-Prime Mortgages & the US Subprime Lending Crisis




 

 

Florida Real Estate
With more waterfront districts then any other state in this country, it is no wonder why Florida has been leading the country in terms of new pre-construction real estate development projects. These include luxury waterfront West Palm Beach presales and beachfront condo towers in Sunrise and Englewood, residences, homes, townhomes and master-planned communities in places like, preconstruction Palm Beach, Sunrise, Fort Lauderdale, Englewood and more. You can click on the 'Florida Properties' links to your left for more information.

Hot Real Estate Buys for Canadians in Florida!
Canadians may not want to touch the US real estate market until they’re sure the worst in the subprime debacle is over. But don’t shun it just yet because Florida has some winning prospects right now! This is a great advertisement investment article by Suzanne S for Canada’s leading real estate property magazine. The US real estate market might make many home buyers and property investors shudder due tot eh sub-prime mortgage crisis, which the country is striving to ov ercome. However, a closer look reveals that there are still opportunities in real estate investing for keen investors not afraid of risk. Untapped areas in Florida State real estate could prove fruitful if you play your cards right. It’s hard to predict just where the bottom is when dealing with a mortgage meltdown such as this we are encounterting at the moment. A real estate investor could buy now and then regret it later if porices continue to drop in Florida property market. On the flip side, a home buyer could purchase now and then sit back, relax and watch as the investment property appreciates through long term. This is where the risk factor comes into effect when you deal with the Florida property market situation. Overall, Florida’s real estate market has experienced about 50% price depreciation and currently sits at pre-contruction costs, says Gary Michaels, Manager of the Resort Realty, Pensacola, Florida. Consumer confidence in Florida real estate is very gloomy. “Over the next few months, it will probably stay at these very low levels, but is not likely to go much lower,” says Chris McCarty, director of UF’s survey Research Center at the Bureau of Economics and Business Research, Gainesville, Florida. That said, there is some good news when it comes to investing in the Florida property market. Oil prices have slightly declined in the Florida State due to lower demand. Also, there is a tax credit now available that encourages first time Florida home buyers to get into the lagging real estate market.

More about the perfect time to purchase a new Florida real estate investment right now
According to Lawrence Yun, chief economist at the National Assocaition of Realtors (NAR), Chicago, about 2.5 milion first time Florida home buyers are expected to take advantage of the US $7,500 tax credit between now and the middle of 2009. So what does all this mean for a Canadian real estate investor in Florida’s property market? It suggests you might want to get in now, as the economy and prices are forecast to rise. “Prices have fallen sharply and quickly in very distressed real estate markets in Florida State, but most or all of the price declines may have already occurred in these areas since home buyers have now returned to those markets,” Yun said. Also, it’s key to evaluate the real estate Florida market with a long term scope, Richard Gaylord, NAR president and broker at Re/Max Real Estate Specialists, in Long Beach California, says, “Many homebuyers with long term expectations are getting exceptional value in the current Florida market. Once the inventory is drawn down, price pressure will return because the cost of construction are rising – so today’s home buyers are very well positioned to build wealth over time.” Certain areas in Florida real estate market are performing better than others, and are likely to give Canadian investors the most bang for their buck. Cities along the Florida northwest real estate communities have some winning opportunities since they are vacation hot spots that can maximize rental returns. These areas in Florida real estate market are more accessible for tourists from surrounding states such as Louisiana, Mississippi, Alabama and Georgia since they can drive there. Southern regions of the Florida property market have had a more difficult time bouncing back from the downturn because they’re further for visitors to commute, and many real estate markets in Florida south have yet to experience the conditions found along the Gulf Coast. “All of south Florida real estate relies on permanent residents and vacationers to fly down to Florida,” says Michaels. “Obviously in a down economy not as many people are travelling and they are opting for a closer vacation experience.

Considerations for Canadians Investing in Florida Real Estate
While the Canadian dollar and plummeting US housing market might make US rental real estate properties an appealing notion, make sure you know all the details before jumping into an investment in Florida property. Although it’s possible for Canadians to purchase inexpensive Florida properties in the US, stricter lending guidelines are making it increasingly difficult. Canadian home buyers are best served by having at least 35% down payment, as many US lenders are often offering only 65% LTV. While the original price tag for the Florida real estate investment might be cheap, foreign residents are frequently dinged when tax season rolls around. In florida State, for example, there is no state income tax and as a result higher property taxes are abound in any property that you invest in Florida. Permanent Florida residents are also given exclusive tax breaks, including an automatic US $50,000 reduction on the assessed value of the principle residence for people aged over 65 (US $25,000 for all other residents) and annual property tax increases in the Florida real estate property market are capped at 3% or the rate of inflation, whichever is lower. On the flip side, non-Florida residents purchasing investment property or homes to live in have been known to pay property taxes that are three times greater than those of permanent residents living nearby. Michael MacKenzie, research and communications officer at the Canadian Snowbird Association said he knows of non-Florida residents paying $9,000 in annual property taxes while their Florida resident neighour is paying just $3000. He added that he same disparity didn’t apply in other US states and highlighted Arizona as one state that is now marketing this very fact to Canadian property investors. However, there may be relef in sight for non residents with investment property in the Florida real estate market, in terms of the amount of property tax that can be increased each year. According to Mackenzie, the rate of increase of Florida property tax may be capped at 5% in November this year. Importantly, all of these factors must be added tot eh cost of maintaing a distance investment property in Florida real estate – as well as employing the services of a property management company, which can be around 30% of your gross rental income.