The nation's economy has impacted Florida real estate, and it's important for some investors and personal buyers to know where to find the cheapest homes in Florida. Florida remains the second highest state in recorded foreclosures, following California. The Sunshine State has approximately 125,000 foreclosures. That number, down from July by 13%, is still high. Miami leads the state with 622 foreclosures, while Orlando has 441. Jacksonville has 406, with two other locations in the Miami urbanized area, Ft. Lauderdale and Pompano Beach, posting 315 and 261. Three of these locations, Miami, Ft. Lauderdale, and Pompano Beach are in South Florida, and while affordable homes can be found throughout the state, nowhere are they hotter than there.
South Florida is ranked first in the state's foreclosure ranking and also holds the highest foreclosure record for all US metropolitan areas. South Florida saw more foreclosures during the first half of 2010 than any other metropolitan area. It eclipsed the larger markets of Los Angeles, Chicago, New York, while outpacing hotbed locations like Phoenix, Las Vegas, and Detroit. It accounted for nearly 6% of foreclosures filed nationally from January through June. South Florida had a whopping 94,466 foreclosures out of the nation's 1.65 million. Therefore, buyers selecting from available inventory statewide will find more of the cheapest homes in the Southeast region, along the Atlantic Coast from Palm Beach to Kendall.
South Florida is officially defined as the Miami-Ft. Lauderdale-Pompano Beach area. It encompasses the three most populous counties in the state: Miami-Dade, Broward, and Palm Beach. Miami is the largest city in the tri-county area, followed by Hialeah. Both have population densities of more than 10,000 people per square mile.
The population of South Florida centers on a land strip between the Atlantic Ocean and the Everglades. An area of contiguous urban development, about 110 miles long, 20 miles at the widest, it has created a densely populated area with three distinctive divisions:
South Florida’s combined urban population accounts for five million people. That population, and the attendant density, have contributed to the high foreclosure statistics.
Many reasons exist to explain why South Florida real estate has dipped so low, however the following are the main reasons most can agree on:
In addition, another wild card has influenced foreclosures. Homeowners, who had adequate mortgage payment funds but didn’t see the point as values fell, contributed to strategic defaults. Since experts do not see prices returning to boom-time levels in the near future, some agree with them in principle.
Those experienced in real estate do not think the situation will recede any time soon and predict that a high level of defaults will continue. Experts suggest the South Florida area will probably remain at the top of the national ranking, or at least in the top 3 metropolitan areas, through the end of 2011.
Florida metropolitan areas accounted for nine of twenty national markets with the highest foreclosure rates during the first half of 2010. While South Florida ranked first, the Orlando region occupied the tenth spot. Orlando, in the East Central part of the state, posted 37,352 foreclosures for the half-year period. These figures make it another prime region for real estate shopping. Well known for Disney World, Orlando's metropolitan area includes Oviedo, Kissimmee, Lake Mary, and Winter Park, with the Orlando-Kissimmee metropolitan statistical area ranked Florida's third largest.
The second most populated metropolitan hub is the Tampa area. It includes the city of Tampa, nearby St. Petersburg, and Clearwater, on the Gulf side of the state. Retirees have flocked to the Tampa Bay region for years. Many reduced-price homes exist there now as ill health and financial difficulties follow the aging.
South of Tampa's metropolitan area but considered part of the Tampa Bay region, is another key population center, the state's 5th largest: Sarasota-Bradenton-Venice Beach. It is surpassed by 4th ranked Jacksonville, in the state's far northeast corner. These five metropolitan areas, along with Cape Coral, further south along the Gulf, and Palm Bay on the East Coast, fall within the 100 largest metropolitan areas in the nation.
The seven largest Florida metropolitan areas account for 73% of the state's total population and are good sources for locating the cheapest homes. The more homes in a region, the more likely buyers will find foreclosures, short sales, and motivated sellers who have lowered prices.
House hunters interested in Florida should become familiar with its geography. The state's diversity, because of its large size, also derives from its location between the Atlantic Ocean, on the east side, and the Gulf of Mexico to the west. Florida offers beach living and water sports, plenty of sunshine, mild winters, and humid summers that sometimes lead to turbulent storms. With so many populous regions and a great deal of houses for sale, buyers should evaluate what each metropolitan area and overall region offers for residents in terms of schools, shopping, jobs, recreation, culture, neighborhood safety, and fire and police protection.
Listed below are the ten largest metropolitan population areas in Florida, in descending order, followed by their statewide geographical region. The two areas ranking highest in metropolitan foreclosures in the state and USA are noted:
Buyers have different reasons to shop for Florida homes. Some are interested in investments and have plans to rent or flip. Others are looking for a house to live in and raise a family. Varying needs and budgets account for many search criteria. However, with no personal income tax, a 6% sales tax rate, and low property taxes, Florida offers pluses.
Styles of homes vary in Florida from traditional two-story models with brick exteriors, floating staircases and hardwood floors, in the Northwest region, to an array of high rise condominiums in the Southeast region along the Atlantic, and in the Tampa Bay region.
While foreclosures and short sales almost always offer the best prices, they can take a long time to reach the settlement table. Some buyers choose instead to focus on homes listed by motivated sellers who often reduce prices to obtain quick sales. These homes may also be in better condition than the short sale and foreclosure offerings that sellers might neglect before leaving.
Here are examples of real estate deals now in the Miami/South Florida area, #1 in foreclosures:
Condo purchases under $150,000 abound. For $120,000, a buyer can obtain 1110 square feet in a gated waterfront community, just minutes from the beach with 2 bedrooms, 2 baths. Purchase as a winter escape or rental investment while the price is hot.
Houses in Miami Beach that are in good condition sell first. Such a house, a short sale with a remodeled kitchen, 2 bedrooms, 1 bath and 1055 square feet is listed at $99,000. A buyer looking for a starter home would get a favorable deal.
A larger home in Miami, another short sale, is a steal at $124,900 because of its excellent condition. 1460 square feet of living space, 3 bedrooms and 2.5 baths, 2 levels and a garage add to the family appeal.
A good illustration of a foreclosure home in the same area is a $74,980 residence with 3 bedrooms and 2 baths. 1090 square feet on a large lot, with fireplace, screened porch and fenced yard are part of the package, but as with many foreclosures, it needs some work and the buyer should not be in a hurry for settlement.
In Pompano Beach, part of the same metropolitan region, houses are about $213 per square foot. One can buy a large 3-bedroom, 2-bath home that has been reduced almost 24% for $457,000. A lagoon, private dock, updated pool, modern kitchen, and A+ schools in an upscale community make this one of the cheapest homes of its kind in the area.
For condo lovers, Pompano Beach has luxurious, almost-new, high-rises for $300,000 plus. A half block from the beach, all possible amenities, and 1362 square feet, make this a retiree's dream.
A short sale, reduced by 57.5% in the same beach town, offers the buyer 3 bedrooms, 2 baths, 1010 square feet. The owner updated the interior, but the exterior needs care. Price: $119,000.
A buyer wanting something small for vacationing in Pompano Beach might find an $80,000 short sale appealing. With 3 bedrooms and a large yard, remodeled interior, and quiet, convenient neighborhood, it typifies some of the cheapest homes in the area.
West Palm Beach is yet another South Florida locale that has wide appeal and numerous foreclosures. A 2-bedroom town-home, reduced by 60.3%, has a low price tag of $63,500 and needs minor outdoor enhancement. Not a short sale, a quick settlement is possible.
A small villa with 11130 square feet, 3 bedrooms, 2 baths, is listed as a $49,000 short sale. It contrasts with a 2-story West Palm Beach residence having over 2000 square feet, 4 bedrooms, and a gated community, being short-sold for $200,000. Both are good deals for different buyer needs.
Buyers can find deals similar to the ones in the Miami/Southeast region anywhere in the state. If one's job dictates location, there will still be many choices. Furthermore, if employment is not a factor, searching the internet or using real estate services in desired regions should net wide results. House hunters should remember that the areas with the greatest number of foreclosures are good starting points. Foreclosure information should not be the only consideration, though. In Florida's current economic climate, however, it is a useful barometer for measuring the highs and lows of the housing market.