Florida
SPECIAL REPORT
SOMEWHERE IN AMERICA...
! SPECIAL REPORT
Don’t fancy Florida? There are plenty more states to consider
ARE BRITS GOING COOL ON THE SUNSHINE STATE? IT’S LONG BEEN A BIG FAVOURITE WITH BRITS, BUT HAVE RISING COSTS, FALLING VISITOR NUMBERS AND STATIC HOUSE PRICES TAKEN THE SHINE OFF FLORIDA – OR IS NOW A GREAT TIME TO BUY? WORDS CHRISTOPHER NYE PICTURES GETTY
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xpedition Everest, Disney World Florida’s newest ride, shoots screaming thrillseekers up 200 feet, then down a sheer 80-foot drop at 50mph, then backwards and forwards over ‘the Himalayas’ and into a close encounter with an animatronic yeti! Scary stuff, but for those who recently invested in Florida property, the ride would be a piece of cake. For British owners here, life has been all ups and downs over the past 18 months. The Sunshine State is looking a little overcast as the highs of the booming 2005 market have been replaced by a triple whammy of rising costs, static house prices and falling visitor numbers.
What’s gone wrong?!
Florida’s attractions have made it first choice for many British holidaymakers, with Disney World alone attracting 88 A PLACE IN THE SUN MARCH 2007
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some 1.2 million high-spending Brits each year. But the fun in Florida doesn’t end there: the arty resorts of the Gulf coast appeal to more grownup vacationers. The Florida Keys, the Everglades, the horse country of the north, the snowy-white sands of the Panhandle, the pleasures of Miami… Florida has it all, including temperatures that hover between warm and hot all year. So, the tourist boards are asking, where the bloody hell are we Brits? The year-on-year fall of 1.3 per cent in the volume of British tourists may not seem enormous, but is a serious reversal in fortunes after rises of more than 10 per cent the previous year. In particular, August saw a 4.3 per cent drop in visitor numbers from the previous August – and that’s bad news for the 15,000 holiday-home-owners from this side of the pond, many of
whom are financing those houses by renting to fellow Brits. If they don’t come, then nor does the steady income financing many UK owners’ mortgages. Combine this with the general slowdown in the US housing market, and there’s a real smell of panic in the air.
Prices are falling!
The drop in visitor numbers has been blamed on several factors – long-haul surcharges, theme park price rises of 12 per cent (making some $350 – £180 – for a day’s fun for one family), an unwelcoming attitude at passport control, the threat of terrorism, and the hurricanes of 2005. The American housing market is suffering, too. After many years of sensational rises, with Florida seeing prices soar by over 25 per cent in 2005, the latest figures from the US government show that ‘single family
homes’ rose by just over one per cent in the last quarter. Of course, that’s not an actual fall in the price of houses − theoretically your villa in Florida is still worth more than it was three months ago, and a full 15 per cent more than a year ago – but it is a significant deceleration in the rate of growth. But Florida expert Andrew Bartlett remains unconvinced by the numbers: “Official figures use a median average. But the simple fact is that villa prices are falling, significantly, especially in the central Florida area.” Bartlett says that the worst affected have been those who overstretched their finances, persuaded by agents (on commission) to buy too many houses, or property outside their budget. Much of his work now is acting as consultant to British home-owners facing repossession. Alex Evans of Overseas Property Professionals (OPP) is clear where the blame lies. “Developers have had a good run over the past five years, naming their price and getting it. Investors piled in, buying off-plan, then flipping (ie, reselling quickly to make a profit) in an inflated market. Now first-time domestic buyers have been priced out, interest rates are up and places like Panama are a lot cheaper.”
Numbers will be up There is a third group of people being turned off Florida – relocators. A good lawyer can get most would-be British emigrants a visa for the US, but many struggle with health insurance and adapting to the American way of life. On a lighter note, the latest survey from the Association of International Property Professionals (AIPP) has America ranked fourth as the most popular choice for Brits to buy overseas property, with 7.5 per cent of the market, while our own survey (published in the last issue) had the US at number ten. Certainly Suzanne Morill, whose real-estate company World of Florida has been trading for 14 years, isn’t worrying too much. “Sure, business is slower than it has been over the past two years, but we’re back to the situation of about five years ago.” She blames the knock-on effect of the 2005 hurricanes, “but since there have been no serious hurricanes in 2006 and no terrorism, and given the value of the pound "
CALIFORNIA
Though the 11-plus hours flying time is offputting, this vast state is truly sensational, from the blossoming southern deserts of Palm Springs to the wine valleys of San Francisco, the Pacific coast, the ski mountains of Lake Tahoe, and Beverly Hills. But those prices… They’ve doubled since 2000 and though they are experiencing ‘readjustment’ right now, California won’t be getting much cheaper; it’s just too popular. Prices are similar to the south of England, though homes in the most desirable areas sell for ‘a million a window’.
NEW YORK CITY
Brits love New York, with a large number of us working in the media and finance (an indication is that 67 Brits died on 9/11 – the highest number of foreign-born casualties). Although Manhattan has some of the priciest real estate in the world, hop over the East or Hudson Rivers to Staten Island or Brooklyn to live the New York lifestyle for a reasonable price. Fourbedroom homes in Staten Island go from £100,000 – and they even have a local cricket team.
ARIZONA
Alongside Florida, Arizona has been the star of the property scene in America, as the alternative destination for snowbirds from the north of the country, and retirees from California cashing in their valuable houses for a comfortable retirement. However, price inflation of 35 per cent in 2005 has not been repeated in 2006. Condo living is just as desirable as villas, golf is fantastically popular and air conditioning is an absolute must.
CONNECTICUT
Fancy a colonial-style, four-bed, detached home for just £120,000? Connecticut is one of the best opportunities for holiday homes, with year-round holiday-letting potential. The Nutmeg State is small, friendly, wealthy, close to New York City and only seven hours travelling time from UK airports. It enjoys snowy winters, hot summers and spectacular autumns. And the maze of little islands on the coast and the mighty Connecticut River make owning a waterfront property a fraction of the cost of Florida.
THE CAROLINASS
Real estate entrepreneur Kendra Todd reckons the Carolinas offer a terrific alternative to Florida. The coast will be of most interest to Brits, with brash resorts like Myrtle Beach and the cool, breezy beauty of the Outer Banks. Inland are the Appalachian Mountains, a beautiful area but decidedly ‘backwoods’ in places. Baby boomers after country homes, and retirees seeking affordable country living are heading for the Carolinas, and golf is big business. Property is economical compared to New England and Florida, making it a good investment.
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