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The real estate market is coming back around after years of getting hammered, and the markets leading this recovery are the very ones that were damaged most by the collapse. Florida was one of the hardest hit states when the real estate market tanked, but now things are looking much better in the sunshine state. I'll start with the disclaimer, though, that certainly not every market in Florida is worth investing in. To help investors, I've put together a little list of the best Florida real estate markets for 2012. Keep in mind that this is not a list of the best places to live in Florida, but rather a list of what I believe to be the best places for investors to buy real estate in Florida this year. The following locations are not ranked in any particular order.

Fort Myers

As with the other real estate markets on this list, the Fort Myers area was hit especially hard when the real estate bubble exploded. Real estate prices in the area fell nearly 60% off their peak, and foreclosures were rampant. It has taken several years, but the area has finally turned the corner. Here are some market insights for Fort Myers that has lead me to my conclusion:

  • The job market is recovering. Over the past year, unemployment has fallen from 12.7 percent, to 10.2 percent, according to an article from News-Press.
  • The population is growing. From 2000 to 2010, according to US Census data, the population in Fort Myers has grown 29.2 percent.

Real estate market specific facts (according to Movoto.com):

  • Available inventory has fallen 30%
  • The percentage of distressed properties is falling
  • The median days on market has fallen by over 20 days in the past year
  • In 2011, real estate prices increased almost 21% according to Inman News

It is also much cheaper to buy a house in Fort Myers than it is to rent one. For this exercise, I went to Zillow.com, clicked on a few listings, and compared the estimated mortgage cost to the Rent Zestimate for the homes. Looking at these numbers, you are able to get a pretty good idea that buying is much cheaper than renting in Fort Myers right now. One thing to keep in mind, though, is that you will need to add on some extra padding to the mortgage number for things like, maintenance, insurance, HOA dues and so on. These are things that you wouldn’t have to pay if you rented the property. In this case, the numbers aren’t even close, but sometimes that will make the difference.

After reviewing the data for Fort Myers, we clearly see a market that was considerably oversold after its collapse. Fort Myers is already on its way to recovering as we speak, and many investors will be making a lot of money as a result.

Miami

During the housing bubble builders went nuts in Miami - especially condo developers. There was a tremendous amount of inventory created, and the demand from end users for these properties simply did not support the amount of units being built. Naturally that lead to a glut of supply, and prices fell. Well, after the bubble popped development basically ceased, and the market was finally given a chance to absorb the excess supply. Things are looking a lot rosier for Miami's real estate market now. Here are some things that Miami has going for it:

  • World renown city which attracts international as well as domestic buyers
  • Large population base - easier to find tenants
  • Inventory is falling: "from March 2011, the inventory of residential listings in Miami-Dade County has decreased 34% from 18,883 to 12,379 in March 2012," according to the Miami Association of Realtors.
  • Prices are increasing: "In March, the average sales price for single family homes in Miami-Dade County increased 21.8% from $279,608 in 2011 to $340,634 in 2012. The average sales prices for condominiums jumped 23% from $212,616 to $261,523," according to the Miami Association of Realtors.
  • HousingPredictor.com ranked Miami as the #1 real estate market in the entire country for 2012.

The Miami real estate market is back with a vengeance, and 2012 should be a great year for the Miami real estate market.

Orlando

Just like with the other two markets we already covered, the Orlando market was hit hard when the bubble collapsed. Builders overbuilt, investors over speculated, foreclosures were rampant - nothing really new there. The start of 2012 has been good to Orlando, though - with prices up nearly 13% over last year - and that trend should continue.

The real beauty of the Orlando real estate market, is that thanks to Walt Disney World - and all the various other theme parks - the area is the #1 tourist destination in the United States. For investors, that means - assuming you buy a property in a decent location - there are two potential tenant streams (vacationers and long term renters). Here are some more market facts for Orlando:

  • Inventory is down 31% according to the Orlando Association of Realtors
  • Prices are up nearly 13% according to the Orlando Association of Realtors
  • over 51 million tourists visited Orlando in 2010, up 10.5% from 2009

The Orlando real estate market has a lot to offer investors, and the market should have a great year as the economy continues to rebound.

Conclusion 

The real estate market is turning the corner - especially in Florida - and it's time for investors to get back on the bus. I know it is scary to think about investing in markets like Florida which fell so far only a few years back. Just remember, the only reason these incredible opportunities exist today is because the market severely over-corrected.  Investing at the pre-collapse pricing down in these Florida real estate markets didn't make sense - today it does. I'm so confident in the real estate markets down here in Florida, that I'm putting my money where my mouth is. My company, Hanover Companies, has already purchased five developments in Florida, and we are still looking for more.  

Hanover has many properties in Florida available at discounted prices - all with attractive financing already in place - for investors to capitalize on today. Visit our website at hanovercompanies.com for more information.