Investors looking for Florida real estate to flip are hard-pressed to find attractive foreclosures and short sales. Realtors struggle with low inventory levels, but it’s not impossible to make buyers happy even in the Central Florida seller’s environment. According to a recent article by The Orlando Sentinel, Central Florida led the country in foreclosures just a few years ago. Now, the metro Orlando area will likely register double-digit real estate gains. Reports from Zillow.com already show that home values in Seminole, Orange, Lake and Osceola counties surging more than 5.6 percent this year. With low unemployment and better wages, potential home buyers have the home buying power. At the same time, real estate professionals struggle with lower inventory. In some cases, it’s a smart strategy to show new construction homes to buyers, negotiating deals on their behalf for incentives such as free appliances, upgrades or help with closing costs from the builder.
Overcoming the Bubble Objection
Another issue for today’s real estate professional is a real or imaginary housing bubble. Many potential buyers want to know whether the Florida real estate market indicates a housing bubble. Experts cited by the Orlando Sentinel say they don’t see a bubble in the short-term because mortgage lending requirements are still strict. Also, Orlando housing values still remain below the peak of the bubble from 10 years ago.
Helping Today’s Home Flippers
Some clients don’t want to live in a Central Florida home, but they do want to profit from any rapid housing appreciation. Realtors often locate new housing construction deals that appeal to home flippers interested in just making a few cosmetic improvements. Because the new home builder often charges significantly more for upgrades, such home flippers often buy the base model with intentions to do some of the light work themselves such as laying modern laminate flooring or adding better pendant lighting fixtures. Other investors want to turn existing homes into rental homes for profit. Some of the ideal properties for rentals include starter homes with three or four bedrooms and two bathrooms.
Explaining the Potential for Appreciation
Although housing prices seem high for first-time buyers, it’s important to give buyers a perspective. Interest rates are lower now compared to the double-digit rates of the 1980s. Most buyers feel an urgency to buy now before interest rates go up further. The Fed promises to raise rates this year. Real estate experts point out home prices in the Orlando area are currently 17 percent below the highs of the 2007 housing bubble. Zillow predicts Orlando will experience the best housing appreciation in 2017 as the fourth best market in the country.
Assisting Underwater Sellers
In some cases, homeowners that want to sell are still underwater on their mortgages, owing more than the home is worth. About 10 percent of homes are upside down, according to the Orlando Sentinel. But five years ago, almost 50 percent of homeowners were underwater. When helping such home sellers, focus on the low-interest rate, downsizing and their personal goals for moving.
Working the Central Florida territory as a Realtor or other real estate professional is exciting this year. With so many baby boomers moving to Florida from across the state and younger buyers starry-eyed about their first home, it’s rewarding to help. Analysts don’t see the housing euphoria settling down anytime in the near future as people settle in sunny Florida.
At IFREC Real Estate Schools, we assist aspiring real estate professionals with live and online classes. We provide continuing education as well as help with real estate licensing. For more information about real estate trends in Florida and how to get started with a lucrative career in real estate, please contact us today.