Investing in the US might not be high on Australian investors' list of priorities at the moment, but experts say property markets there - and Florida in particular - offer some winning prospects.
A recent report from a US marketing and consulting company estimates that nearly 2.7 million square feet of condos, townhouses and single-family homes in coastal South Florida sold in 2008 at an average discount of 43%
Condo Vultures estimates that 1,717 properties east of I-95 in Miami-Dade, Broward and Palm Beach counties traded last year for a combined price of US$775m (A$1.213bn), down from a historic high of US$1.33bn (A$2.08bn).
"Every month in 2008, an average of 143 residential properties sold at 57 cents on the dollar," says Peter Zalewski, a principal with Condo Vultures. "Given the difficulty in obtaining financing, our data and anecdotal evidence suggests that at least two-thirds of the units sold were purchased by all-cash buyers who didn't need financing to complete their transactions."
All-cash buyers who have the ability to close quickly have enjoyed success in South Florida, negotiating prices down on residential product from distressed sellers, notes Zalewski.
Canadian Real Estate (CRE), Your Mortgage and Your Investment Property magazines' sister publication, carried an extensive report on where investors can find the best bargains in South Florida in its November 2008 issue.
In its follow up article, America on Sale, featured in the December issue, CRE explored other states in the US that might represent investment opportunities. In some examples, price depreciation sat at pre-construction costs, suggesting that investors could take advantage of discounted prices.
Alberto Bertisch, realtor and licensed mortgage broker at Coral Shores Realty Inc., Fort Lauderdale - with whom Canadian Real Estate spoke in November - agrees. "There are reports stating that the real estate market in Florida is bottoming out and will start rebounding by the second quarter of 2009."
Condos and townhouses are down an average 38.5%, while single-family homes decreased in price about 40.2% by January 2009.