Can the Housing Bust Actually Save Florida?

For years, if you lived in the Midwest or the Northeast (or the eastern parts of Canada), there was only one place you thought about retiring- Florida. (Okay- in recent years Arizona also became hot.)

But there is something about the palm trees and the beaches. And family members could actually drive down to see you (unlike in Arizona.)

And for decades, it was pretty darn cheap to move there. Heck, in the early 1990s, you could get a very nice house in Sarasota, for instance, for about $100k. Even beach houses and condos were relatively affordable.

But all that changed with the housing boom. And as much as homeowners benefited from skyrocketing prices, it meant that people from up North began to seriously re-consider whether they could afford to retire there.

A couple of nasty hurricanes and big jumps in insurance rates didn’t help matters either.

Moving to Tennessee

Over the last few years, instead of thinking about retiring to Florida, people started moving to Georgia, Tennessee or the Carolinas.

And then a new phenomena started. Why not still have the beach but for much, much less?

Regular readers here know I’m a big fan of HGTV’s House Hunters and the newer House Hunters International. Recently, House Hunters International had a segment with a couple from Pennsylvania that was looking for a retirement home in Panama. They were looking in a price range around $250,000.

As many know who watch the show, they looked at three houses and then decided which one to buy. Only one was really near any kind of water. The house they chose had lovely grounds but was a good distance outside of Panama City. The house was in their targeted price range but they were going to have to drive for 20 minutes (or more) to get to civilization.

If you didn’t know otherwise- you might have thought the houses they looked at were in Florida. So it got me thinking: why AREN’T they looking in Florida? Is it simply the cost?

And now that Florida real estate is crashing- is it possible that a new generation of retirees will be able to live there cheaply again?

Forget Panama, Nicaragua, Costa Rica. All of those countries have been luring retirees with cheap housing.

Would you retire to Florida if you could get a house or a condo on the water for the same price as in Central America?

True- the “prime” areas of Florida are still pricey. Look at the Florida Keys. Houses are still running near a million dollars for something up-to-date and decently sized.

But even the Keys are feeling the housing downdraft.

Surprisingly, maybe the housing bust will be one of the better things to happen to Florida. It will enable a whole new group of people to move into the state, with their money and their talents. Why are retirees spending their money in the stores of Panama when they can stay closer to home and boost the local economies?

I think the bust has a ways to go before it genuinely gets cheap enough to compete with Central America prices. But with airfares skyrocketing, the cheapness factor might not have much meaning if it costs double the price to fly to Panama City versus Tampa.

Florida will rise again from this bust. And cheap real estate prices will be one of the reasons why.