"Buyers hope to profit from the sub-prime shadow across the Sunshine State"
It's breakfast time in Orlando and thousands of people are clambering aboard tour buses all over the city ready for fun in the Florida sunshine. One group, however, won't be following the others to Disney World or the area's many other theme park attractions. They'll be taking a shopping trip in the company of estate agents and mortgage brokers, hoping to find a bargain among a selection of repossessed and run-down homes.
The growing popularity of the six-hour "foreclosure express" tour is one symptom of the worst housing crisis to afflict the Sunshine State in recent years, a slump set off by the sub-prime mortgage crisis that has sent repossessions soaring and prices into freefall.
The bus follows a pre-determined route through residential neighbourhoods and stops at up to a dozen empty houses already repossessed by lenders. The passengers disembark and size up the premises as they decide whether to offer an asking price often already below the open-market value.
Tickets cost $45 (£22.50), or $65 a couple, including breakfast and lunch at a fast-food restaurant, and demand is so high that another tour is planned for the middle of April. . . .
"It's really a rolling classroom with realtors, a lawyer, a property appraiser and a mortgage broker aboard with the buyers and investors. People can get a good idea of what's available." . . .
Three-bedroom houses in Kissimmee that sold for $240,000 a year ago can now be snapped up for $198,000, a 17.5% decrease. And prices in Miami, which were rising by more than 20% annually as recently as 2005, showed a 19.3% decline from a year ago, the biggest drop in the US alongside Las Vegas, according to the Standard & Poor's/Case-Shiller home price index. . . .
Now, to make their properties stand out among the glut in a stagnant market, developers are slashing prices and offering unprecedented incentives. "They're throwing in big-screen TVs, country club fees, whatever they can do to get a deal done," said Bob Hudgens, treasurer of the Florida Association of Realtors. "What we are seeing is sellers being realistic after the speculation that fuelled the incredible appreciations in 2004 and 2005. Back then people weren't in the market for the long term - it was get in, get out and make a quick buck."
Kirschner agrees that parts of the Miami housing market are already on the road to recovery, aided by overseas buyers taking advantage of the weak US dollar. "Miami is a mega-market," she said. "We have tourism, beautiful beaches, sunshine, clean air and water, great healthcare, good universities and a lot of other things that feed our market. Add to that the number of baby-boomers entering retirement and it's sure to rise." . . .
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