By Dr. David Eifrig, Editor, Retirement Millionaire | 8 July 2009
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The big, white sign in front promised a free list of foreclosures. Early last month, I set off to explore the real estate market on Florida's Treasure Coast— specifically St. Lucie County— to see if it makes sense for my Retirement Millionaire readers… and perhaps myself. My first stop was the GMAC Real Estate office on Port St. Lucie Boulevard.
I walked in unannounced and asked the lady snapping her gum at the front desk for the promised foreclosures list. She said I had to meet with a salesperson first. Luckily, I drew Jim Smolinsky's straw. Jim's a laid-back middle-aged guy— his business card shows him in a tropical Tommy Bahama shirt. We talked for more than an hour.
"Dave, right after Hurricane Wilma in 2005, there were no homes under $200,000 for sale. Rents were $1,400 a month for a three-bedroom two-bath home. Today, there are thousands of properties under that price! And rents are plummeting." Just four years ago, Port St. Lucie was the fastest-growing area in the country.
It's no wonder… this place truly is a slice of heaven— a golf-and-retirement community 45 minutes north of West Palm Beach. After visiting the area, I can tell you this: If you've suffered the past two years watching your investment portfolio collapse along with your dreams of a Florida retirement, you can stop worrying: Your dream retirement just got 50% cheaper.
Florida has always been a mecca for retirees. The warm weather and zero state income tax have drawn folks for generations. But during the housing bubble of the 2000s, growth in places like Port St. Lucie spun out of control.
Between 2000 and 2005, the population of Port St. Lucie exploded from 88,769 people to 151,391. Not surprisingly, the median home price shot from $88,700 to about $235,900. Since then, housing prices have collapsed, falling nearly in half to $118,500.
That kind of whiplash price drop always perks up the bargain hunter in me. Of the 4,035 properties on the local market, 992 were "short sales" (when the bank agrees to let the owner sell the house at less than the outstanding mortgage's value) and 183 were foreclosed properties. Think about it… nearly a third of the sellers are desperate to unload their properties.
All told, during three days in St. Lucie County, I saw more than 250 properties. Prices ranged from $9,000 for a three-bedroom/one-bath dump up to a three-bedroom/two-bath McMansion on the golf course for $604,900. Of the 10 cheapest places, five were built in the 1950s. These teardown shacks would provide lots of fun for a hardcore do-it-yourselfer with a wrecking ball— but not my sort of thing.
Of the 10 most expensive, five were built in 2006. I focused on homes in the $120,000-$160,000 range because they seemed to offer the best blend of value and newness in neighborhoods where I'd actually live. Whether you want a place near water or close to the PGA Village and shopping malls, foreclosures, short sales, and outright sales abound. For example, if you like golf as much as I do, there's a two-bedroom/two-bath townhome next a public golf course on well-manicured grounds for only $120,000.
If you have cash and are thinking about a second home, you can find some great deals on single-family houses. In many cases, these newer homes are selling for less than $70-$75 per square foot. To compare, Miami is starting to see bids at $200 a square foot for high-rise condos. And don't forget, "first-time" homebuyers (meaning you haven't owned a home in the past three years… hmm… that's some good government doublespeak) can get a tax credit of $8,000.
So… how much will it actually cost? Well, here's what a $200,000, 2,300-square-foot home would cost in the PGA Village, within a short wedge shot of one of the fairways, with $40,000 down. Port St. Lucie is a great spot for retirees. Florida has no income tax, the beach, and the 'homestead exemption'— which allows you to keep your house if you get into legal trouble.
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But the main thing I'd like for you to take away from what I found on my Treasure Coast trip is that things are tough in the real estate business right now… which makes owning a slice of retirement heaven much cheaper today than it was three years ago. If you've ever considered moving to Florida, it's now more affordable than you thought.
Here's to our health, wealth, and a great retirement.
Good investing,
Dr. David Eifrig
P.S. The real estate collapse of the past few years drove home a major point for many people: Retirement in America has changed in a big way. If you're counting on giant institutions (like the government and insurance companies) to take care of you… good luck. But if you're willing to take off the blinders of institutional thinking, you can (legally) "steal" back your retirement, no matter what your current situation. I've compiled plenty of details on how you can get started immediately. Click here to learn more…
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