We want to buy a home in Florida.

[Retiredcoach]

Originally Posted by CJFlorida

Your example is exactly the problem in Florida. No offense but if you can only get $1100/month rent then the sales price would be $120,000-150,000. Those are the rent multiples that have stood in Melbourne forever.

I am amazed that there are people that still think Florida real estate is coming back in a few years when all the negatives are just building now, and won't even peak for 18 months or so. After that, the real down period can begin...today's market is nothing compared to what is coming.

Again, no offense, but a house in Melbourne that rents for $1100 is worth no more than $150,000 now and will be worth even less in 12 months and even less in 24 months. In 2 years $145,000 will seem like a pipe dream. If you find someone to give you $210,000 for a house that can be rented for $1100, then you have truly found a huge sucker.....those numbers make no financial sense in any way, shape, or form. A rent multiple in Melbourne of 191 is beyond ridiculous.

Sorry to be blunt, but it gets so frustrating to see people ignore the housing bubble blogs that have been completely accurate for 5 years now.

I cannot dispute your logic in terms of housing values, but will dispute your logic with rental values. If the sales prices of homes are not affordable to the average income resident, that person with/without family must find a place to live. If there is an overwhelming number of suitable rental properties, the rents will drop to the levels that correspond to attracting the best tenants. If the supply of rental properties is limited, optimal rents can be charged regardless of the true assessed value of the properties.

That being said, what kind of tenant will be attracted to a rental property when the monthly cost teeters around 45% of his/her income monthly? Too many Florida stalwarts are counting upon the retired baby boomer with a large bankroll to purchase their overpriced/overvalued Florida homes. It just is not going to happen.... a company pension has disappeared for many and this generation has not saved as the previous one did. The cost to relocate to Florida is cost prohibitive. Florida homes are no longer appreciable assets... the Florida home value is depreciating faster than an old Chevy Cavalier. To the poster saying that he will leave it vacant before he sells at market price... Do you want to buy my Cavalier?

[skrischke]

Do not "lease-purchase", this means you agree to a PRICE TODAY at the time of contract, rent for one year, then close on it at that price, there is little chance of ANYTHING you buy today at $145K appraising for that price in a year. Instead, you shoudl consider TWO options:

#1. "Lease-Option", which allows you to rent for one year and at the end of that term you have the OPTION of buying it, and would negotiate the price at that time. Better in a declining market.

#2. Simply find a nice home to rent in a nice area, then oyu will have a year to study the market, travel the area, discover things to do adn places to go, travel times, etc...then after about 9 months, enter into a purchase agreement on a house oyu really like, and prices will be at the bottom of the market by then, I think.

Good Luck!

[Momma_bear]

Originally Posted by CJFlorida

And don't get me started about that $300,000 asking price in New Port Richey. The median income in New Port Richey is $31,000. Wow, just, wow....try half that asking price....maybe, if they get very, very lucky.

The funny thing is the OP is going to have a choice of thousands and thousands of nice houses at $145,000 in a year or two....yet most posters are acting like she is the one that is delusional.

You can't look at median incomes in places with large numbers of retirees. Many seniors have lower incomes, but plenty in assets and own their homes outright.

I agree that real estate hasn't bottomed yet, but the OP didn't say he/she wanted to wait 2 years. If they want that property now, it doesn't exist.