Magazine: SW Florida Not a Good Choice for Real Estate Investments

Published by julia | Filed under Communities, Miscellaneous, Real Estate

If you’re interested in buying real estate for the future re-sale value, better NOT look to Southwest Florida.That’s the verdict of the November 2006 issue of BUSINESS 2.0 magazine, which rated the best — and worst places to buy real estate in the country. Included in their choices of places to avoid were cities such as Sarasota, Fort Myers, and Naples. “A typical home goes for $500,000, and prices rose 25 percent last year.” The editors note. “A local economy with a thin base – retirees – can’t sustain the heat.”

It may be small consolation, but although it performed poorly in the survey, Southwest Florida did not break into the bottom 5. Those dubious honors went to these cities (from worst to “best” of the worst): Stockton, CA; Merced, CA; Reno / Sparks, NV; Fresno, CA; Vallejo / Fairfield, CA; Las Vegas, NV; Bakersfield, CA; Sacramento, CA; Washington, CA; and Tucson, AZ.

Of particular note:
Five of the bottom 10 cities were in California. Home prices went up as much as 60 percent since 2004. This was largely due to big homebuilders being squeezed out of Los Angeles by shrinking space, and arrived in the Sacramento and Fresno areas, looking for bargain-priced real estate…even though the area has quite low-paying wages.

There are Problems in Phoenix. Numbers from 2005 show that as many as a third of new home sales here went to speculators and investors, who are now competing with builders to dump their holdings.

The Jersey Shore Atlantic City, Ocean City Have Their Own Issues. Prices have escalated as Philadelphia commuters bidded for condos against second-home buyers from across the Eastern Seaboard. But the latter group usually tries to get out from under mortgage No. 2 when interest rates start climbing.

But There’s Good News in Florida. Although the state’s southwest communities did not fare well, other Florida areas — including here in Central Florida — did better. Lakeland, in fact, made the Top 10 List for best areas to buy real estate, coming in at number 4. “Few places in Florida scream out ‘buy now’ like Lakeland,” say the editors. According to the magazine, a house goes for a fifth less than the national median of $227,500, and Lakeland is just 30 minutes from Tampa, a juggernaut of 2.7 million people that’s projected to add almost 210,000 more residents over the next five years.

Other Florida cities doing well: Vero Beach at number 2, and Panama City tops the list at number 1.

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© 2008 Julia Vakulenko and Tampa4U Team