by Donald Finley

Created on: August 11, 2009

Florida is a great place to live. It has warm weather, sunshine white sandy beaches and a never-ending list of things to do. What some people don't know who only visit is that Florida also has no state income tax, so we residents only complete one tax form each year. We also keep a bit more of our own money. In the current economy, that's a big deal. Housing in Florida has always been at a premium, but as one of the hardest hit states in the real estate market, now things have normalized and housing prices are realistic. Here's an example.

When I first moved here, we rented a 2700 square foot home with 4 bedrooms and all the upgraded fixtures like granite countertops and tile floors. It was close to the water, but not on it, and in a new development where about half the lots were not yet built on. It was for sale for $525,000. This was before the market dropped, but there was no way I would have paid that much for that house. I estimated it was at least $200,000 overpriced. We only lived there a year, then we moved to help out a friend.

Our friend had moved here in 2005 and immediately bought a 3000 square foot, 5 bedroom home for $375,000. At the time, he had trouble even finding a home big enough for his four teenagers. He was thrilled with what he found, and the price. Two years later, however, as he prepared to move, the house was appraised at $275,000, far too little for him to sell, so we helped out by renting it from him. It was further from the water, which we liked, at the end of a cul de sac, and much bigger, although without all the niceties. Now, after another two years, he tells me he'd be lucky to get $220,000 for the house. It's worth every penny, but he still can't afford to sell it.

Where you live in Florida makes all the difference. We have hurricanes here, and despite not having experienced one in my three years here, I'm amazed at how many people buy and build houses right on the beach. It's like they are challenging Mother Nature. There will be more hurricanes, and Mother Nature always wins. She packs a one-two punch of wind and water, and one of them will get you. I advise living near the water, but not on it. Damage is still visible from the series of storms that hit Florida in 2005.

The counter argument to my previous advice is that 360 days a year in Florida, the weather is beautiful, which is true. In the summer months, we get a lot of afternoon thunderstorms which can put a dent in your golf game, but

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