Central Florida Real Estate Update
By Allen Jackson
The worst is over:
The Central Florida real estate market was probably hit much harder than most. Because it is an international destination the demand for homes during the real estate boom was quite incredible. But what goes up must come down and that is exactly what has happened. Prices have stabilized at about 50% below the highs. Although that sounds like bad news, it is only if you are a seller. Buyers have been handed a bonanza that you only see once in a lifetime.
Inventory tells the real story:
Inventory of homes for sale is the key indicator of a markets stability and health. Looking at the charts below you can see that the inventory in Central Florida has dropped 11,000 homes from the peak in 2008
Now that the inventory has stabilized so have the prices. But if you look closely you will notice that inventory is beginning to drop further. Fewer homes will mean higher prices in the future.
The rest of the economy:
As everyone knows, Central Florida is the number one tourist destination in the world. Disney, Universal Studios, Sea World and the many smaller attractions have turned what were once only orange groves and grazing cattle into a family vacation mecca. Of course tourism was hit with the recession. At the worst, it was off 13%. But as things have improved, tourism has outpaced the rest of the economy. At present we are nearly back to our 50 million visitors per year.
Vacation Home Industry:
Vacation homes are not uncommon around the United States. The difference in a few areas including Central Florida is that the vacation home can become an investment home as well. If you own a vacation/investment home in Central Florida you can use it as often and as much as you wish, but when not in use by yourself you can rent it out to vacationers for short periods of time. This can present a very lucrative situation for investors with some types of properties obtaining a 90% occupancy rate. The cost of a vacation home can range from $100,000 to $300,000 and condo’s going for even less. Below is a summary of the gross expected return from various homes per year.
7 Bedrooms - $60,000
6 Bedrooms - $50,000
5 Bedrooms - $40,000
4 Bedrooms - $23,000
3 bedrooms - $18,000
As you can see, the income generated by these homes can be quite significant. For many people the return and low cost of entry into the market at this time makes it a great alternative to paying rent on their vacations. If this type of vacation/investment sounds interesting to you. Please contact me, Allen Jackson at 407-399-8330 or email me at firstname.lastname@example.org