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Tuesday, June 20, 2006
Investors going to Carolina, Alabama - just not here
At monthly meetings of the Boca Real Estate Investment Club, President David Dweck used to tout Palm Beach County properties he hoped to sell — a fixer-upper in Delray, a duplex in Lake Worth.
But at the club’s meeting this month, Dweck was pitching homes he’s building in the mountains of western North Carolina. It’s an area that looks more promising than Palm Beach County’s past-its-peak housing market.
The geographic shift is just another sign of the cooling market. The days of big price gains are over. But rents have risen only slightly, making it practically impossible to buy a property at today’s prices and rent it for enough to cover the mortgage, insurance and taxes.
This new reality is a big reason for plunging sales volumes in Palm Beach County (down 43 percent in past year) and the Treasure Coast (down 28 percent). Investors are looking elsewhere, to cheaper areas like North Carolina.
Brokers in low-cost cities are beginning to market here, too. For instance, Sandra Nickel of Montgomery, Ala., recently traveled to Palm Beach County to pitch her city as a profitable investment alternative.
With a median home price of $137,800, it’s still possible for a Montgomery landlord to rent a home for a monthly profit.
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