ORLANDO, Fla., Feb. 9, 2012 (GLOBE NEWSWIRE) -- Shortly after the new year, as the weather in northern climates gets blustery… at least in most years, an annual migration gets into full swing. Snowbirds begin to head south. Avatar Properties™, an active adult community builder in the Sunbelt, says these migrating snowbirds will find some pleasant surprises when it comes to home prices.
Consider this fact. In two of the most popular snowbird locations, Florida and Arizona, more than 1 million snowbirds are now looking for places to roost for the winter (800,000 in Florida; 300,000 in Arizona). Among home builders, conventional wisdom holds that a great many of these snowbirds will spend the season searching for the perfect active adult community to call home – for many, on a permanent basis.
For those on just such a search, there is some very good news at hand. Home prices in both Arizona and Florida are now at levels not seen since 2000. In Phoenix, the median home price at the end of 2011 stood at $122,000 according to the NAHB/Wells Fargo Housing Opportunity Index; in places like Orlando, the median price bottomed at $108,000 in early 2011 from a high of $248,000 in early 2007. After years of escalating home prices made these traditional retirement havens less attractive destinations for the 55+ set, the housing downturn has ushered in the return of affordability.
New York native Bruce Menzies survived two attacks on the World Trade Center during his nearly 35-year career with the Port Authority of New York and New Jersey. "When I retired in 2010 there was no question I was going to find a way to live my dream of having a place in Florida. My parents talked about it but never made the move, and I wasn't going to let that happen," said Menzies. He and his partner purchased a 2,300 square foot home in Solivita™, www.solivita.com, an active adult community near Orlando. The home was a great value, including dual master suites and a space for a golf cart in the garage.
There's no doubt among the experts that the recession and nearly five years of declining home sales and prices have kept many snowbirds sitting on their nests. For perspective, consider the fact that between 1990 and 2000, Florida and Arizona together attracted an average 53,000 new residents age 60+ annually (40,000 Florida; 13,000 Arizona). Between 2009 and 2010 a total of just 23,000 people of all ages moved to Florida! But Stan Smith of the University of Florida's Bureau of Economic and Business Research is already predicting the return of those higher numbers in just a few years.
Carl Mulac, President of Avatar Properties which is building Solivita, knows why Smith is optimistic. "Home values across Florida are now at levels last seen more than ten years ago in most major markets. Florida real estate prices dropped hard, but that in turn has created an exceptional buying opportunity," he said. At Solivita for instance, new single family homes start at less than $130,000. Mulac says that same kind of affordability can be found around Phoenix, where Avatar is building another 55+ community, CantaMia™ www.cantamia.com. In 2000, the median Phoenix resale home price was $132,000 – today it's $125,000, with signs of stabilization in the market. That affordability, combined with energy savings features on selected new homes is attractive, especially for part-time residents.
"We had been searching for four years for a warm weather winter home and when we got to CantaMia we knew we had found the right place for us. We love the heated pools, the spectacular setting, and the photovoltaic solar that helps keep the energy bills low" said Brent Kirkby, a new CantaMia resident. Brent and his wife Lorie are snowbirds from Calgary, Alberta, the energy capital of Canada. They love spending the winter in the desert with the warmer daytime temps and an instant social life with the other community residents. "We've met so many wonderful, new friends here," said Lorie.
In 2005 the Orlando Regional Realtors Association reported more than 37,000 home sales. Just three years later at the bottom of the region's housing cycle that number was cut by more than 50%. Almost 28,000 homes were sold in 2011, putting the market back on track to challenge that 2005 level in the year ahead. A similar scenario is playing out in the Phoenix metro area where 101,000 homes were sold in 2011, according to the Arizona Regional Multiple Listing Service - fast approaching the 2005 high of 104,000 homes sold. Mulac says that the jump in sales is indicative of the market's overall value. "Many baby boomers still see Florida and Arizona as their ultimate retirement destinations and the savvy ones know that the present represents that one-time opportunity to truly buy at the bottom of the market. Prices are already starting to slowly move up," he said.
Mulac says his costs to build a new home are also at levels not seen in a decade. "Since 2007 we have watched our construction costs steadily decrease. Today, a buyer can build a brand new home with us for about 35% less than they could in 2005. Materials, products and labor all dropped substantially during the last four years but they are starting to move up," he said.
In November 2011, the Bureau of Labor Statistics reported that its residential construction index was up 5.9% year-over-year. In its monthly report it found that materials such as gypsum, a key ingredient in drywall, was up 3%; plywood was up 3%; asphalt roofing and siding climbed 2.5%. With respect to gypsum, which can represent as much as 5% of a home's cost, several large producers raised prices 35% in January.
As those one million snowbirds begin their home search in the warmer climes, they may very well experience that once-in-a-lifetime opportunity sought by everyone – to buy at the bottom of the market.
Media Contact: Ken Plonski 863-427-7126 or ken_plonski@avatarholdings.com
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The following pictures are available for download:
| [Image] | At Solivita, courtyard villas are selling for less than $160,000 and are quite popular with Snowbirds because exterior maintenance is included, allowing them more time to enjoy the active adult lifestyle |