According to the Florida Association of Realtors®, now is a great time to buy in Florida, and to prove it, they offer arguments against the naysayers in this article.![]()
![]()
![]()
Below is my take on these arguments as they apply to the Orlando and the Central Florida area.
“Nobody is buying houses anymore.”
Despite all the gloom and doom, last year was the fifth-best year for house sales in U.S. history, according to Lawrence Yun, senior economist with the National Association of Realtors® (NAR). Yun also expects to see slightly higher sales levels over the next several months. And while sales in Miami and Tampa have been under stress, Orlando sees a brighter future due to job growth.
“Why buy now when home prices will only go lower.”
Evidenced by a modest 5% drop in prices statewide last year, sellers are not panicking.
In fact, “In Florida, residential prices shoot up quickly and then stabilize,” says economist Hank Fishkind, Ph.D. of Fishkind & Associates, Inc., located in Orlando. “Even when there is excess supply, prices don’t tend to come down.”
“Better to stay safe and rent instead.”
For someone who plans to stay in their house for more than two years, homeownership makes more sense financially in terms of tax benefits and appreciation.
“A home is not a sound investment.”
It’s the best investment going. Based on the median price of homes sold in the Orlando area, values have risen on average nearly 9% every year since 1999. Some years are better than others, but overall, the average annual gain has been healthy. That doesn’t take into account the leverage factor. Nine percent appreciation against a house’s value translates into 90% against a 10% down payment. And what does that mean? That the average appreciation more than covers the costs associated with current interest rates.
“Mortgage money is drying up.”
Lenders are being more prudent to whom they lend and under what conditions, but if buyers are qualified, lenders will welcome them in the door.
“Mortgage fraud is widespread, making lenders more cautious.”
Even while underwriting has been normalizing to former standards, mortgage lenders continue to approve loans to qualified buyers.
“Home prices in Florida aren’t affordable anymore.”
Now that we’ve seen a correction of sky-high prices, it’s easier to get into the home of your dreams than it was just two years ago.
“People are moving out of Florida, not in.”
While growth has slowed, Florida is expected to add 265,000 new residents this year, according to Fishkind. While this is down from the screaming levels of 2006, Florida’s population is expected to rise by 288,000 in 2009 and 332,000 in 2010. In addition, Orlando is increasingly attractive to international buyers.
“First-time buyers are being priced out of the market.”
For the first time in a long time, housing has again become affordable for first-time buyers. Not only are banks supportive, but county and Federal programs are stepping in to fill the subprime gap, making homeownership attainable for the first-time homebuyer.
“Retiring Baby Boomers have no retirement savings, so they’ll be forced to cash in on their homes, which will force prices down.”
Now that they won’t be tied to a specific location for job prospects, Boomers are more likely to move to areas where housing is more affordable. And that area is Florida, and more specifically, Orlando.
“Inventories of unsold homes will only get worse.”
Inventories have stabilized. In the Orlando area, inventory has hovered around the 26,000 mark, high to be sure, but level since June of last year. Only homeowners who need to sell are trying to sell. The rest are biding their time, waiting for more certain times and more predictable outcomes.
