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Florida bargains on offer

Tuesday, August 04, 2009

If you want a bargain, buy a holiday home in Florida - estate agents say prices are 50 per cent to 60 per cent down on their highs of four years ago...

The downturn in the US has been longer and deeper than in Europe. An analysis of prices for Guardian Money by the British Homes Group - a large estate agency specialising in discounted holiday homes and based in the Florida town of Kissimmee - says that in its part of the sunshine state, 19,000 homes are for sale at an average of 51per cent of 2005 values.

British and other European buyers are beginning to increase in numbers, buoyed by the improved pound-dollar exchange rate in recent weeks.

"Some prices will change here and there, but movement is expected to be minimal. What will start to disappear very quickly is the choice of properties," says Lee Weaver of British Homes Group. The price falls are not restricted to holiday home areas. The scale of the downturn across the US has been, as the locals would say, truly awesome.

The country's leading house index, the S&P/Case-Shiller All-National, shows that prices rose by an average of 80per cent between 2000 and 2006. In the past three years they have plummeted by a third, taking them to little more than the values of a decade ago.

There are bargains to be had in every state, if you are willing to take a risk.

Foreclosure Bus Tours is one of scores of firms organising trips for investors around the streets of Florida, Texas, Arizona, California, Georgia, Maryland, Michigan and Illinois every Friday and Saturday.

Investors view selected bank-owned repossessed houses. "We get a lot of interest from the UK" says a spokesman. "It takes a lot of effort to organise a trip here so we can help with everything from accommodation to maps."

Tempting as these offers look - and in Illinois, for example, some are down 70per cent - there is just one problem: little indication that the housing market is getting better.

The Mortgage Bankers Association in the US says property sales hit $8.9bn (£5.4bn) in the first quarter of this year, against $43.4bn in the same period last year and $125.5bn in the first three months of 2007.

Harvard University's Centre for Housing Studies says about 50per cent of banks have tightened requirements this year, demanding larger deposits and imposing stricter qualifying rules. Developers were much slower to stop building than in the UK and as a result 2.1m homes are empty, so supply is likely to outstrip demand for many years. Which, back in Florida, means good news for British bargain hunters.

"The general feeling among buyers is they've waited long enough. It helps that sterling is strengthening slightly against the dollar," says Joanna Leverett of Savills, a British estate agency which works with US agents to negotiate deals for British buyers.

"One local agent, RSVP Associates, just sold a beautiful large villa reduced from $6m to $2m.

"People are recognising there are some excellent opportunities that won't last forever, and would rather buy now than miss out."

Source: www.guardian.co.uk

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