The flood of retirees buying second homes in South Florida has slowed to a trickle.
Janie Coffey, a broker with Papillon Real Estate in Coral Gables, says there is a noticeable decrease in the number of retirees and soon-to-be retirees from up North purchasing condos or homes in typical areas of Miami. “It’s just not as strong as it was two years ago,” she said of the retiree market. “First time home buyers or investors are really looking right now. The retirees are much more cautious.”
After watching their retirement accounts shrink and considering the prospect of high property taxes, insurance rates and rising condo association fees associated with second homes, many baby boomers are keeping a close eye on home prices in the tri-county area. They’re reluctant to jump in amid uncertain times.
“I haven’t had any clients raise their hands and say, ‘I’m ready to buy property now,'” said Bonnie Hughes, a senior financial planner with the Miami-based Enrichment Group.
Most of Hughes’ clients are investing in more conservative retirement accounts or setting money aside in CDs or money market accounts insulated from the volatility of the stock market. Even doctors and lawyers are working later into their lives to keep an income stream coming. While she said very few of her clients are looking in South Florida, several retirees are checking out property in South Carolina and North Carolina and even Central Florida, where they can take advantage of lower housing costs, property insurance and taxes.
But Hughes predicts action in South Florida could intensify later this year, into next year, as housing prices drop further. “Most of our retirees have one foot in Florida. Their ultimate plan is to eventually move to Florida or have a second home here,” Hughes said. One positive indication is that a few of her colleagues have heard from clients who are searching for short-sale or foreclosure single-family homes.
Retirees looking in South Florida now are seeking good deals. Coffey has one client who is looking to spend $500,000 on a canal-front home in Hollywood or Aventura. The client, who lives in New York and is looking for a second home, is not in a rush. “They are not pouncing,” Coffey said of the typical retiree in this market. “They have the money, but they are waiting.”
Coffey tells retirees to keep a close watch on an area where they want to buy, but cautions: if they wait for the bottom to hit, they could miss out on some opportunities.