KAREN FISHER IS SUCH A DIE-HARD NEW YORKER that she never got around to buying a vacation home in the Hamptons. But when the former travel editor saw the landscaping and pool design of the Flamingo high-rise overlooking Biscayne Bay in South Beach, she was smitten. "I'm standing there and the breeze is coming off the bay onto my face, and I'm thinking, 'This is heaven,'"
says Fisher, who's now the proprietor of Designers Preview, a referral service that matches clients with designers. "It's just three hours from New York, only a little longer than a commute to the Hamptons."
Until that moment, Miami was a place Fisher visited on business; she wasn't particularly fond of the beach. But "the bay side was absolutely gorgeous. Lincoln Road is just two blocks away, and I could have brea fast, lunch and dinner at a different restaurant for four years before I'd have to start again. Plus, we have a David Barton Gym and one of the most spectacular pools I've ever seen."
Fisher's one-bedroom condo overlooks the bay and doubles as an office. Since buying in October, she's finding plenty of reasons to work away from New York. "I thought I would use it once a month, but I just got back last week and am thinking I might be going back next weekend," she says. "It's such an absolutely perfect place for a second home."
Like Fisher, H. Ronald and Rebecca Northington describe their new condo in Longboat Harbour on Sarasota's Longboat Key as a slice of heaven. The Tennessee couple bought their home last fall sight unseen. "We saw another unit that we liked but thought it was overpriced," says Rebecca. "Our realtor called and told us another one was on the market, and she sent a video." They closed Nov. 14 and moved in the next day. "The beach is five minutes from our back door; the bay is at our front door," says Rebecca. "We're very well traveled but have never experienced a place like this."
Although they paid $100,000 less than they would have during the height of Florida's real-estate craze in 2005, it wasn't the price tag that swayed the Northingtons. It was the lifestyle, one that came with multiple swimming pools, tennis courts and a beach club.
Fisher and the Northingtons represent a vibrant part of the Florida housing market: buyers seeking an active winter lifestyle. As cold weather grips the North, realtors are banking on a surge of buyers who will find the lowest home prices in a decade ? up to 40 percent less in some markets. Those who were out-priced just four years ago now find the numbers more to their liking. Realtors like Carolyn Block Ellert, the chairperson of Broward County's Master Bro-kers Forum, an organization of the top 750 residential realtors in Dade, Palm Beach and Broward counties, have just two simple words for buyers straddling the line: Buy now. "There are huge discounts," she says. "People who have been looking the past few years are going to be pleasantly surprised by the deals to be had."
Good buys are a common theme across the state, where buyers will find entry-level pricing down from the $300,000s to the $100,000s in some markets and $1 million knocked off the price tag of estates in Miami's tony Coral Gables as well as cities like Naples and Sarasota. Five of Ellert's recent buyers in Las Olas River House, a 42-story high-rise overlooking Fort Lauderdale's New River, enjoyed huge savings ? from $235,000 to $555,000 off original pre-construction prices.
After lackluster sales the past 18 months, steady reports of declining home prices nationwide and builders' dwindling confidence in future new-home starts, the real-estate market may have turned the corner in Florida. Buyers are beginning to jump back in, and sales activity rose by 5 percent in the third quarter of 2008, prompting the hope that momentum would continue through 2009's high season, the January-to-April period when most visitors and seasonal residents tradi-tionally decide to buy or upsize. Says Ellert, "Consumer confidence is building. Buyers are coming back."
By early January, interest was also up in Alys Beach in Northwest Florida. Atlanta businessman Dean Trevelino, who is selling a $2.2 million vacation home ? and building another ? says activity is on the rise. "My agent told me they had an evening tour Dec. 27, just two days after Christmas, and were slammed," he says. "Alys Beach is not discounting their pricing. I've actually raised the price of the home twice in the past six months. But I'm patient; I can afford to be."
It was a fluke that brought Trevelino to the posh community in the first place. "I had no intention of owning a vacation home on the beach," he says. "I have a place in the mountains in north Georgia, and someone stayed there who suggested swapping a week for his place in Rosemary Beach. I loved the area. One day I was going for a run and saw Alys literally rising from the ground."
HOW LOW WILL IT GO—
Alys Beach may just well be the anomaly in Florida, where prices are nearing bargain-basement levels in most areas. But how low will they go? Many buyers are biding their time, thinking there's still wiggle room. "It's the Filene's Base-ment theory. There's a perception that the bubble has burst, so let's wait to see how far prices will drop. People want great buys," says Brenda Talbert, former executive director of the Collier Building Industry Association in Naples. "And they're getting them. Our builders have done absolutely everything right to lower their inventory. They're reducing prices and making deals."
For the first time in at least a decade, new condos in some markets have dropped into the $100,000s, including small beachfront apartments in St. Johns County, according to Jacksonville-area realtor Krista Fracke. Despite lower prices, condo sales have stalled in St. Johns County and the Jacksonville area, a market that's less dependent on vacation homebuyers, says Fracke. "People who have job security are the ones buying now. Buyers looking for vacation homes are holding off."
More "huge discounts" in the condo market can be found in South Florida, particularly in Hollywood, an ocean-side city that Ellert says is coming into its own. At Radius, prices as low as $115,000 for a one-bedroom, 700-square-foot home come with a lifestyle that includes retail and restaurants on the ground floor and a host of amenities ? a screening room, pool, club room and Internet café ? right in the heart of the city. "It's been open six months, and prices are 40 percent less than they were in preconstruction 3½ years ago," Ellert says.
Great deals are in Greater Miami, where about 17,300 new condo units have been built since 2003. Savvy buyers are taking advantage of low prices and investor bailouts in condo towers, paying an average of $406,000 ? as much as 70 percent less than preconstruction prices. The condo glut and inability to obtain financing has forced some of the planned units into a holding pattern, including the Ritz-Carlton Club's three-tower complex in South Beach. Even cov-eted oceanfront homes in Fisher Island have dropped below $900 a square foot, according to Helen Jeanne Nicastri, founder and chairman of the Master Brokers Forum. Nicastri's swoon-worthy, multimillion-dollar markdowns include a $2.5 million condo in the Ritz Residences in Coconut Grove that would have sold for a million more during the height of the market. A $7.7 million apartment in the Gables Club, along the 8-mile Coral Gables Waterway, boasts 7,500 square feet and views of Biscayne Bay, the ocean and the Miami skyline. It was reduced from $8.9 million.
Prices in South Florida are so appealing that realtor Liz Caldwell, a longtime Weston devotee, recently caved in, buying a 1935 gem in Fort Lauderdale's Rio Visa community. But the deals, she says, aren't just on older homes. "In Weston, you can get a newer five-bedroom, three-bath home in the mid-$500,000 range that would have sold for $750,000 in 2004. We're back to 2002 pricing," she says. "There are also really good deals in the upper range. In Hillsboro Beach, where properties are $16 million to $18 million, I have one wealthy client willing to knock $5 million off his home."
Landmark Development Group recently slashed $700,000 off the asking prices of its furnished, single-family model homes along the Jack Nicklaus-designed Concession golf course in Sarasota. The 3,300- to 5,000-square-foot, de-signer-furnished homes are now priced from $2.3 million, or as realtor Mark P. Riley puts it: "2002 prices for 2005 to 2006 construction costs."
As of December 2008, the median price for a single-family home in the Bradenton/Sarasota area was $160,000 compared to $344,300 in December 2005. Condo prices are also down, some by half, says realtor Jan Bradley, who represented the Northingtons, pointing to a new waterfront apartment near downtown that closed for $1.2 million ? $1.4 million less than the original listing price.
In Naples, the median price for a single-family resale, which closed in on $500,000 just four years ago, is in the $200,000s, and builders have whittled prices of new homes, often throwing in luxury finishes to seal the deal. But bar-gain hunters waiting for prices to drop even more may be in for a surprise. Single-family homes and condos priced at more than $300,000 stabilized in the past year, according to the Naples Area Board of Realtors, which noted the me-dian sold price is also starting to rise from $558,000 to $566,000.
WHERE DEALS AND TRENDS COLLIDE
Those in the market want bargains ? and they're finding them. Fracke has found a handful of older beachfront condos in the low $100,000s in the Jacksonville area and recently helped a client close on a 1950s four-bedroom, two-bath house in a quiet neighborhood. "He's paying in the $200,000s; it sold for $328,000 in 2005." The best buy on the beach, she says, was a two-bedroom penthouse in a three-year-old building with a balcony overlooking the ocean. It sold for $720,000; the original buyers paid $859,000 in 2005. "People are getting prices for less than the original buyer because there are still people who want ? or have ? to sell."
Tighter bank-lending practices are part of the reason for the condo downturn. Several lenders now require 20 percent down payments. "Sales of our new condos in Jacksonville are slow because it's harder to get a loan," Fracke says. "People are buying single-family homes because there's so much inventory to choose from and the costs are lower. You don't have to pay condo fees."
Fracke has also seen increased interest in bargain hunters going the foreclosure or short-sale route. "I have one buyer who's negotiating $190,000 for a home that sold for $300,000 just a few years ago." Foreclosures and auctions do offer great savings, although legal snarls and bank issues may mean a long wait to take ownership.
Lee County, home to Fort Myers and Cape Coral, led the state in foreclosures in 2008, prompting some realtors to conduct foreclosure tours by bus. And it's not just the lower classes affected by foreclosure. Fracke and Riley say $1 million homes are now being taken over by the bank.
What's lacking in many areas of Florida right now is the construction cacophony that hit a crescendo in the early part of the decade. Only two high-rises are currently under construction in Naples, and developers in other parts of the state have scrapped plans.
But there is activity in certain pockets. Flagstone Property Group broke ground in November on its $640 million Island Gardens Miami, which will offer 98 fractional residences, shops, dining and the only megayacht harbor in North America. Located on city-owned Watson Island, the development will also include a 150-room Shangri-La Hotel. Homes are priced from $215,000 to $1.2 million, for one-eighth fractional ownership.
Trends like sustainability are also still very much alive. The town of Nocatee, a development in Northeast Florida's Ponte Vedra Beach, is the first we've heard of to offer safe rooms designed to protect owners from intruders and hurricanes. The rooms are mandated in each of Nocatee's 10,000 single-family homes and all of its public facilities. "It takes away the need for evacuations, so residents don't have to clog the roadways," says Steven Seibert, senior vice president and director of policy for the Collins Center for Public Policy, an independent Tallahassee-based think tank.
The community will have its own schools, parks and retail shops, lessening residents' dependence on cars. "The developers [the Parc Group] have made a significant environmental commitment by placing 50 percent of the property in conservation," says Seibert.
Developers are also honing in on the active boomer market, says Seibert, pointing to the rise of live-work-play communities and urban redevelopment projects that are starting to lure suburbanites to city centers. "Rick Baker, the mayor of St. Petersburg, requires new high-rises have cafés," Seibert says of the Gulf-side city. "That's helping bring people back downtown."
EXCEPTIONS TO THE RULE
While high-rise projects elsewhere go bust, including nearby Trump Towers Tampa, which is now in bankruptcy, sales are strong in two towers that are under construction in St. Petersburg. The 45-home Ovation, with units priced from $1.2 million to $4.4 million, is two-thirds sold. At 36 stories, Signature Place is St. Pete's tallest building. Both projects follow Baker's vision, offering retail on the ground level. In addition to those mandatory cafés, the city is spearheading downtown redevelopment initiatives, attracting successful retail-and-entertainment complexes, preserving the water-front for public use and even offering a midweek farmers market to entice people to head downtown on a Wednesday afternoon.
On Marco Island, where the final beachfront high-rise was completed in 2006, condo units are also retaining their value, mainly due to the most basic economics principles of supply and demand. The 100-home-plus Madeira was the last tower built ? one of the reasons Doug and Lynn Thompson bought a 12th-floor, 3,500-square-foot home there three years ago. "It really was the last opportunity on the beach," says Doug. The former Minnesotans spend seven months on Marco, enjoying amenities such as golf at a nearby club, cocktail parties and casino trips, and opting for the cooler climes of a home in Virginia during the summer. "We're very happy living here," Doug says. "I can go from my bed-room to the beach in two minutes."
Elsewhere on Marco Island, beachfront condos range from $220,000 for a single-bedroom, 600-square-foot home in an older building to the grand dame ? a 13,500-square-foot penthouse listed at $11.9 million. End-of-2008 sales were also on the rise for single-family waterfront homes, with a 27 percent gain over 2007 and prices from $540,000 for tear-downs.
OFF THE BEATEN PATH
For the same price as a starter condo in Miami or Sarasota, buyers also find larger homes, and usually larger lots, in more remote but often blissfully quiet parts of Florida. The abundance of vacation rentals in Destin and lack of va-cant, buildable land has helped owner-occupied homes retain their value, says Christine Karpinski, author of How to Rent Vacation Properties by Owner. Karpinski, who owns several rental properties in Destin, says even those she purchased during the boom are making money. "Destin hasn't had the 40 to 50 percent drops like other parts of the state," she says. "It's down 10 to 15 percent, with some 20 percent. Sales have been slower; however, we're not seeing fire sales."
Realtor Shannyn Stevenson describes a slower pace in Destin, where many Southerners vacation and own second homes. "Destin really appeals to professionals because it's a small, quiet town," she says, though the city is also home to one of the state's biggest outlet malls and all manner of retail and restaurants. Buyers will pay anywhere from $250,000 to more than $1 million depending on proximity to the Gulf of Mexico.
Your money will also go further in places like Mount Dora, a historic, lakeside Central Florida town known for its an-tiques and festivals, where a recent listing offered four bedrooms, three baths and more than 3,000 square feet for less than $240,000.
Perhaps that's because they grow things big in the country, and real estate is no exception. Just an hour's drive from Tallahassee and Gainesville, residents of north Central Florida enjoy the Southern hospitality that has made these parts famous. There's a bit of a drawl, a slower tempo, Tupelo honey and fried green tomatoes. A natural spring or river is likely around the corner, and homes are perfect for weekends as a retreat from the rat race. A recent home for sale in Chiefland, near Manatee Springs, offered three bedrooms and nine acres with two pole barns for $285,000 ? ideal for nature enthusiasts who want to explore or fish the Suwannee River and don't mind a commute to a larger city.
PUTTING IT IN PERSPECTIVE
Feeling the bay breeze on your cheek or meeting a friendly neighbor has a way of putting everything in perspective when you live, even part time, in Florida. As long as northern winters are cold and overcast, second homeowners and retirees will continue to migrate, and many, like Karen Fisher and the Northingtons, will find their time here lengthening. A Florida home will always be a good investment, says Bradley. The baby-boomer market ? those born between 1946 and 1964 ? is 78 million strong and only in the first three years of retirement. And Florida has long been a leader in retirement living. Also, although vacation- and investment-home sales declined nationwide in 2007, they continued to account for 33 percent of all existing- and new-home sales, according to the National Association of Realtors. Some estimates place the number of first-time, second-home owners in Florida as high as 1.2 million in the next five years.
Savvy investors are realizing Florida is a prime investment opportunity right now and are pulling their money from lackluster stocks into real estate. "There are great deals to be had if you want to put your money somewhere," says Bradley. "You just can't expect to sell anytime soon."
