My relatives live in Florida and one of them is the asset manager to a big bank in Sarasota. I was talking with him about this very same thing a few months back when I visited. He did say that insurance is expensive but Florida along with Mississippi are going to see some deep discounts on insurance policies, largely due to the housing market collapse and its efforts to bring people back to buying. What I gathered from speaking with him is that it will always be Florida. He mentioned Cape Coral, FL which I looked into has one of the worse markets! I came to the conclusion, mostly on his justification that Cape Coral will be one of the first markets to rebound because you can buy foreclosures for $120k US dollars, rent for $1,000 per month, etc....He was saying to give it a solid 3-5 years, but at that time he expects those houses to be back in the upper $100's to lower $200's.
I bought a home with my auntie and we paid $118k, rented for $950 on an annual lease. The guy I purchased it thru is a very nice guy and understood the market incredibly well. He handles a lot of the foreclosures for Bank of America in that area. I trust his judgment because my relative spoke highly of him.
One thing he did say was to focus on Southwest Florida though if I wasn't clear on that. If anyone wants to speak with him, I am sure he will not mind if I gave his number. It is a U.S. number though.
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