This is part of a series of stories on retirement and second home destinations in North America.
When Ron Kearn, 59, and his wife Winona, 61, purchased a Florida vacation home last July, it was the fulfillment of a dream that had been 40 years in the making.
"It was on my wish list for pretty much my entire life. But with raising a family, things took a bit longer than planned, but that's okay," says Mr. Kearn, a semi-retired, self-employed financial planner from Ajax, Ont. "The timing was just right. The real estate market was good. I had someone who could take care of my business while I'm not there. I had the money. All of the above."
The Kearns, who recently sold their house in Ajax, plan to spend summers at their cottage near Peterborough, Ont., and winters in Florida.
"Today I went golfing and my wife went shopping," Mr. Kearn says from Fort Myers. "Tomorrow we are going to the beach. Life just doesn't get much better than this."
The three-bedroom, two-storey townhome the Kearns purchased in Fort Myers is located in the newly constructed, gated community of Bella Casa, a 400-unit development with a pool, clubhouse and gym, populated mostly with snowbirds.
Mr. Kearn found Bella Casa through Florida Home Finders of Canada Inc., a real estate brokerage based in Vaughan, Ont., that helps Canadians find homes in Florida. A subsequent trip south to check out several properties clinched it.
"I wanted the Gulf side, although the prices in Orlando were much better," he says. "We didn't get ocean-front property, but we felt that we didn't really need that, as long as we can drive down to the beach if we have guests."
Mr. Kearn says they paid about $162,000 (including the Florida Home Finders discount). Homeowner association fees and property taxes will run them about $5,000 per year. And though he knows prices in Florida are not as low as they were a year or two ago, he was able to take advantage of a strong Canadian dollar before its recent tumble.
"You always question, 'Why didn't we do this a year ago?' " he says. "But yes, we are happy that we bought when we did."
Florida is clearly tops when it comes to real estate purchases by Canadians, powered by snowbirds. Of all U.S. real estate purchases by Canadians, 39 per cent were made in Florida, according to the National Association of Realtors, which gathered data on the 12-month period that ended in March of 2013.
Canadians have been snapping up Florida property for the past five years, attracted by the post-recession foreclosure crisis that drove down real estate to bargain-basement prices. And it's not just Canadians who are flocking to Florida – this year, Florida will surpass New York to become the third most populous state in the United States, after California and Texas.
Has the heyday of the $80,000 Florida home come and gone? Although RealtyTrac reports that Florida still leads the nation when it comes to foreclosures, housing prices in Florida are definitely up. According to online real estate database Zillow.com, Florida home values have gone up 14.7 per cent over the past year and Zillow predicts they will rise 6.3 per cent in the next year.
In terms of what Canadians are paying, a survey by Florida Realtors found that about half of Canadians purchasing in Florida in 2013 paid less than $200,000, with a median price of $197,875. Of those buyers, 91 per cent used cash.
Wayne Levy, a registered real estate broker at Florida Home Finders of Canada Inc., says that though there are still bargains to be had in Florida, across the board, prices are up.
"If you're looking to be on the water, in brand-new construction, for under $100,000 or $200,000, you'll be happy you read this today because I just saved you $500 on a plane ticket," he says.
"Last year we told people, 'We're starting to see increases in prices,' and it has happened. Miami is almost back to where it was before the crash."
As well, the falling Canadian dollar is a concern for some.
"It's the elephant in the room during our seminars," Mr. Levy says. "We've been telling people for two years to lock in your U.S. dollars, so hopefully they listened to us."
Also, Mr. Levy says native Floridians who had been forced to rent five years ago are starting to buy houses again, which has cut into the housing supply for Canadians. "If you had bad credit back in 2009, we're almost five years past the bust now, so the bad credit you had then might be off the books, you might be able to get a mortgage again."
In terms of hotspots, Mr. Levy says Fort Myers, with its revitalized downtown, great beaches, outlet malls, golf courses and affordability has attracted a lot of Canadians. Developments like Bella Casa offer townhomes for between $120,000 and $175,000, he says.
For a snowbird favourite such as Naples, buyers are looking at $200,000 and up, Mr. Levy says, and for single-family homes 10 minutes from the beach, it's more like $400,000 or $500,000. As for popular Sarasota, "Our clients like it, but to find product in there under $150,000, good luck."
Tony Macaluso and his wife Nancy of Portside Properties are real estate brokers in the Palm Beach County area of Florida.
Mr. Macaluso says while they have seen an uptick in prices, they still have prices under $200,000 in attractive neighbourhoods for pre-owned, single-family homes. Palm Beach County attracts snowbirds because of golf, watersports, museums and art galleries, free beaches and an international airport close by, he says.
But Mr. Levy maintains that the best deals are inland. "Orlando is still very affordable, we sell a lot of condo/hotels there – they are great because for a client who wants to put their foot in the door, who is not ready to retire yet but wants to use it."
Mr. Levy uses the term "endvestor" for buyers who are hoping to retire to their property in five or 10 years, but now want the property for income generation. Orlando condo/hotels work this way: An owner can leave the unit empty, use it themselves, or put it into the hotel management program – "let them rent it out for you and you get a cheque every month," says Mr. Levy. Owners can reserve the weeks they want to use the property, and then move in full-time once they retire. Mr. Levy says these condo/hotels can still be had for prices in the low $70,000s.
Nalika Abeysinghe, a chartered accountant from Toronto, decided to go the "endvestor" route. Last September, she and her family bought a townhome in a new development called Serenity in Clermont, only a 20-minute drive to Walt Disney in Orlando, which they found through Florida Home Finders. The 39-year-old and her husband decided to purchase the property as both an income property and vacation home, with the ultimate goal of retiring there in 15 years or so.
"We chose Orlando because we wanted to get an investment property in Florida, and the weather is good and the prices are still low, and we thought in two years they would go up. Down the road, Orlando is a good place to be when we retire, and it's also a nice place to vacation," says Ms. Abeysinghe, who has two children, aged 7 and 9.
The house cost $149,000, along with insurance at $1,000 per year (which gives them $1-million in liability), an essential when renting out a home in the United States.
A property management company will handle finding vacation renters, for the portion of the year that Ms. Abeysinghe is not using the property, with the net proceeds going to Ms. Abeysinghe.
Since construction was just completed on their home (and they just had their first vacation there in January), Ms. Abeysinghe doesn't know exactly how much revenue will be generated by the renters, but she is pleased with the potential.
As for Mr. Kearn, now that he has become a part-time Florida resident, he says he is considering taking advantage of the still-reasonable prices and purchasing another property to generate rental income. There are still 40-odd townhouses in Bella Casa for sale, and he may pick one up.
"My goal wasn't to buy and rent out, but now there might be an opportunity for that," he says. "It's a case of, I would buy a rental property or invest the money, so it's one or the other. We're thinking about it."