Hi Heidi!

I'm a Realtor working for Weeks Realty, Inc. in Pace, FL. We are a full service, independently owned and operated real estate firm in Northwest Florida. We deal with a lot of military individuals and families because of our close proximity to the military bases, specifically Whiting Field in Milton, FL. I would love to assist you upon your moving to our area.

Please feel free to contact me anytime.

Preston Murphy
Realtor
Weeks Realty, Inc.
Cell (850) 380-0571

Mon Jul 14 2008, 10:59

I'm selling my home in Pensacola right now and when talking to my agent about things military buyers came up. They told me that right now military personel moving to this area are being advised not to buy but to rent. My agent had an individual come to him who bought a house just about 2 yrs ago for $235K and now has been scheduled to relocate. He wanted to list his house at $240K but the comps in the area were for $190K.

FYI.. the last 2 homes that sold in my nieghborhood were on the market for 6 months for the one and 12 months for the other one.

Wed Jul 9 2008, 06:08

Robin,

As I’ve said before, I didn’t know that I need to be in your state to understand the basics of finance and economics. My bad, yet again. It would appear as if your market, like all the other markets Realtors® cheer about, is immune to the effects of the national downturn.

I should have known. It’s different here™.

Really quick, Robin. Your $1500 rental costs, if applied to just P&I and ignoring upkeep, insurance, repairs and replacements puts you in a $312,734.28 house with a $250,187.42 mortgage, assuming 20 percent down and 30 years at 6 percent.

Let get crazy. Let’s assume you sell in three years for the same price you bought it for. I know, I’m on the fringe of a true bizarro universe. That will net you $293,970.22 after you pay your 6 percent commission. Hey, don’t be cross. Realtors® need to eat too!

Pay off the mortgage note – surprise – in three years you paid around 10K in principle! Yay! Forced savings plans work!

But wait! All said and done your equity has shrunk from $62,546.86 to $53,579.96; leaving you with an $8,966.90 loss to show for your three years of ownership. I guess that’s why becoming an accidental landlord is now the preferred exit strategy for all the sharp real estate “investors” out there.

Maybe you’ll come out ahead when you factor in the tax benefits of being an “owner.” Good luck.

Or, the more likely scenario involves the Florida market going down 15 percent per year for the next three years. Then you will have the distinct pleasure of showing up to your closing with a check to cover the $27K mortgage payoff shortfall.

Leveraging a depreciating asset in a slowing economy marketed by rising unemployment, continued credit tightening and real estate supply increases – in Florida no less – is about as smart as getting involved in a southeast Asian ground war.

Plan accordingly, friends.
-John

Tue Jul 1 2008, 19:37

Heidi,
Renting is the way to go in a market like FL. If you click "Find Homes" then click Pensacola foreclosures, well, there's a lot of them. Wait another year, save another 20%. Today's investor is tomorrow's underwater seller. Good luck

Mon Jun 30 2008, 19:28

Hello Heidi--I am a realtor on the Emerald Coast including Navarre, Destin, Crestview--not a bad drive from Milton. I would be happy to assist you in your search for a home in the area. Contrary to what you are reading here, our market is at about its low point, and properties are flying off the shelf if they are priced below 250,000. You can buy a nice home in Navarre or Crestview area for under 200,000. Prices should begin rebounding later this year positioning you to make a gain on your investment during the three years that you would be here. Let me know if I can help!!

Mon Jun 30 2008, 18:41

Heidi - Conservative is good. As you mention, sometimes the stress of worrying about it can outweigh what looks like a cut and dry decision. If you feel there is a big risk you may be uncomfortable and who wants to lose sleep? Rent and sleep well!

That being said, I always look at the cost to rent - say $1500/mo for 12 months X 3 years = an investment (or a cost) of $54,000. No tax breaks and no ability to customize a home to your wants and needs.

Florida is a HUGE state and the Panhandle - decidedly - is not Miami. The Panhandle has not seen the huge price swings that Miami, Orlando and Tampa have seen. Our prices just did not run up as they did in other Florida markets dependent on tourism or a particular industry. The Panhandle economy has always been fueled by the military (NAS Pensacola, Hurlburt, AFB and Eglin, AFB), health care and retirees (primarily military).

With all due respect, I'm not sure that John in Conn. can give you a good read on buying real estate in Florida, or renting for that matter. All real estate really is local - our single family home market in Pensacola is considerably different than even the market on nearby Pensacola Beach. When you look at the numbers - you have to pull out properties like beach condos and waterfront homes as they aren't good comparisons - from the averages to make any sense of them.

And I don't really understand the comment about not following the herd. The herd right now is sitting the fence pretty much nationwide - other than the professional real estate investors who are doing what they do best; picking up the best deals while everyone else "waits for the bottom." Just like stock market timing, by the time you can see the bottom, it's usually above you!

Best of luck to you and your husband with your FL move and with the career. We found our time with the Navy to be very rewarding.

Mon Jun 30 2008, 15:15

Thanks, everyone. John, so nice to hear someone echo my thoughts. My husband and I both feel we are very good with our money, albeit a little more safe/conservative compared to most. We were told by almost everyone to buy when we moved to San Diego 5 years ago and almost regretted not doing so. Boy am I glad we didn't. We don't have the option of waiting things out when we get orders and we would have lost our shirts or stressed out about finding renters while relocating to the other side of the country. Instead, we have a very nice savings to show for our time here. We had planned on buying in our next place, but know for certain that we will never get orders back to Florida. Like you said, being an absentee landlord is a little more stress then we like to add to our lives. While I realize we may miss out on making a good profit, it is a gamble. Sometimes I think that keeping your money safe and sound isn't so bad .... I am sure some people facing foreclosure would agree. Don't think that I don't often doubt myself, though. I am sure we will still kick around the idea, but think this may be the wisest for us. With my husband in Iraq right now and us having to move quickly up on his return, I don't want to act hastily in todays market. So nice to hear from others!

Mon Jun 30 2008, 12:17

The herd, for the most part, is still buying, Marian. Sales are down, but not by the amount that we’ll see before this downturn is over. That being said, buying real estate today is hardly the contrarian play. When people laugh at you for buying RE, then it will be.

What do you tell your clients that are buying with a 3-5 year investment horizon? Yes, you can always rent it out, but being an absentee landlord is hardly a good exit strategy, especially in Florida where carrying costs are increasing rapidly.

BTW, Heidi – check out this link:

http://www.trulia.com/voices/Home_Buying/Is_now_a_good_time_…

And may God bless both of your families for the sacrifices they make so that we may enjoy freedom.

Thanks,
-John

Mon Jun 30 2008, 10:27

Heidi,
I love John's position. I am writing this more for all readers and not specifically to you Heidi. Take a look at who is buying in this market. The same people who bought in the last down cycle! Don't follow the herd...always do the opposite in real estate. I do agree that 5 years is better than 3 years in general, however for anyone who has been in the military, you can't be sure that you will be at a particular duty station for 3 years, 5 years or even longer. My husband ended up in or around San Diego for over 6 years. Also, I am not recommending that you sell after 3 years. If and when you transfer, rent it out if possible. You have access to a huge pool of possible renters coming and going.
Respectfully we don't completely agree with John. He makes some very good points, but this market is ripe for buyers in the right areas.
Marian Schaffer
The Schaffer Realty Group
www.marianschafferrealty.com

Mon Jun 30 2008, 09:25

The tax benefits you receive will not even come close to compensating you for the equity losses you will suffer from buying in this market.

In a normal market, you'll need 5 years or more to make buying better than renting. You'll need that long to amortize all the costs associated with buying and selling - the largest of which will be the Realtor’s ® commission. Any honest Realtor® here will tell you that.

But, taken with the common knowledge that supply in Florida is *increasing* and prices are *decreasing* you’ll need a lot more than 5 years to make it work and not loose your shirt in the process.

Just ask anyone who bought in Florida between 2004 and 2007.

I’d wish you luck in finding a Florida rental, but you won’t need it as the market is flooded with accidental landlords trying to ride the storm out.

Mon Jun 30 2008, 09:10

Dear Heidi,
My husband retired from the Navy and he purchased property at almost every duty station he was at. He started off as an E1 and retired as an O5. The FL market is a great place to begin purchasing because of the market conditions. Over time you will be glad you did. You can reach my husband at terry@marianschaffer.com. If you need any assistance, please contact us. Also, thank you for your service!
Marian Schaffer
The Schaffer Realty Group
877-886-8388
marian@marianschaffer.com
www.marianschafferrealty.com

Mon Jun 30 2008, 08:42

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Mon Jun 30 2008, 08:38

Heidi,

The Milton/Pace area has all the amenities that you mentioned. For the larger Mall shopping you would need to come into Pensacola. Depending on where you settle, and the time of day, it is a 10-30 minute drive. If you would rather stay in Pensacola you will probably be better off in the 9 Mile Rd.,(University of West Florida), area or Northeast Pensacola. There is an ample suply of rental properties available in all of these areas. My website has an abundance of area information available and you may search the MLS for properties. Let me know if I may be of further assistance to you.

Mon Jun 30 2008, 08:29

Hello Heidi - I can understand your interest in renting, however there has never been a better time to buy in the Pensacola Bay Area! The near term predictions are for a continued slow market (lots of housing inventory), but most of the experts predict that with the baby boomers entering their peak retirement years areas like Pensacola (Pace, Milton, Gulf Breeze, Navarre) will really benefit.

As a former Navy wife I can tell you that we purchased whenever we had an assignment that was more than temporary as the prospect of giving away rent money wasn't a pleasant one. There is always the tax benefit to home ownership.

All that said, when there is high housing inventory for sale there is also good inventory for rent. Pace is a rapidly growing area that is not far from Whiting Field and also close enough to Pensacola that you won't feel like you are "out in the stix." There is a new retail center with a Target, Starbucks, etc. Gulf Breeze is also another great choice if you would like to be closer to the beaches.

I'll be happy to answer any questions you might have. Feel free to visit my web site and check out my Testimonials page where you can read what a lot of military clients have had to say about working with me and my team. Best of luck to you on this upcoming adventure! There are lots of things to LOVE about Northwest Florida!

Mon Jun 30 2008, 08:22