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The Florida Housing Market Is On Fire So is the Lakes Region of NH

We spent some time in Florida this winter and we saw new sub divisions going up everywhere on the Gold Coast.  We are located in Lake Worth and within a mile of our home we there were 3 new large developments going in.  Just south of us shell condo's and office buildings that once stood idle were finished and bussiling with activity.  A large mall in Palm Beach that was empty for years was being torn down to make way for a new super mall. As I reported early the New Hampshire market is also on the upswing. The lakes region is a very active mark


The Florida housing market is  booming. Home buyer traffic and sales are climbing rapidly throughout the  state, leading to increasing home and land prices.

In the last two weeks, I had 14  meetings and visited over 20 communities throughout the state, and here is what  I found:

  1. Land Prices are rising rapidly.     Demand for land is the strongest in Orlando, where the large number of  builders and developers in the region continue to bid up land prices. In       some submarkets, land and finished lot prices have now surpassed peak       levels. Most builders are opting to buy raw, unentitled land in Orlando       just to gain a position and market share.
  2. Home Prices are rising rapidly.     In markets like Orlando and Naples, new home prices are increasing       approximately 1%-2% per month in many communities. Lotteries are back. We       are projecting double-digit home price appreciation in many Florida       markets for 2013.
  3. The Active Adult market is back.     In       Southwest Florida, builders are reporting a 20%-25% increase in traffic       and sales over last year (which was a very good year!). Secondary and even       tertiary submarkets in Southwest Florida are experiencing stronger demand,       especially as prices rise in the "A" markets.
  4. Foreign buyers are helping the market.     Foreign buyers are not limited to the condos in Miami anymore. In Orlando,       a large influx of foreign investors-typically paying all cash-have helped       the market recover and are driving up demand and prices in the region. In       one sales office I visited recently, there were three families buying       homes at the same time-from Brazil, Germany, and China.
  5. Foreclosures are declining.     Since Florida is a judicial foreclosure state, the time it takes for a       foreclosure to occur is considerably longer. But the banks are slowly       releasing the foreclosures, and the large number of investors in the state       are buying them as quickly as possible.

We Still Have Room to Run   Despite the rise in home and land  prices, it is still affordable to buy a home in Florida thanks to very low  mortgage rates. In Orlando and Naples-two markets experiencing strong home  price appreciation-home affordability is still excellent. The chart below shows  our Burns Affordability Index, which indicates that monthly payments in Orlando  and Naples, as a percentage of median income, are the lowest they have been in  the last 32 years.

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