The finances of Florida, the fourth-largest U.S. state, are less distressed than many others faced with fiscal crises that roiled the traditionally stable U.S. municipal bond market. But Florida is an epicenter of the continuing U.S. mortgage crisis and is struggling with record high unemployment as it seeks to trim budget amid dwindling revenues.
Seeking to remain true to advocates for smaller government, Governor Rick Scott unveiled his proposed budget. He said he can squeeze $600 million from reviewing and renegotiating contracts while trimming $400 million by shifting more Medicaid patients to managed care and $500 million by making changes to juvenile justice and state prison programs. Scott’s budget proposal has Florida spending just under $66 billion in fiscal 2012 starting July 1 and $63.3 billion in 2013. The current fiscal 2011 budget totals $70 billion, including about $23 billion of general revenue spending and was helped by federal stimulus funds that are running out.
Florida’s unemployment rate in December remained at 12 percent compared to an adjusted national figure in December of 9.4 percent. High unemployment requires high spending on jobless benefits while hurting sales taxes and other government revenues. Leaders of the legislature agree the government needs to reduce taxes and regulation, but they point to Florida’s $3.6 billion budget hole and say now may not be the time to provide tax cuts to businesses.
Foreign Investors Recognize Florida Values and Opportunities.
Apparently several recent independent real estate studies agree rental properties are so popular that their rents are rising (especially for the fancier units) and with an occupancy rate of 95%, renting in South Florida will be even more popular in 2011. Meanwhile, the same real estate forecasters are looking overseas for the investment funds necessary to revive the South Florida real estate market. In fact, Florida property is being actively marketed in other countries by such power houses as Stirling and Sotheby’s International, as “undervalued” and therefore, a great investment opportunity.
Real Estate Transactions Will Be More Complex Now, Legally and Factually.
Combine all this information and from a legal perspective it’s not hard to predict that we will see foreign buyers coming into Florida’s jurisdiction not only to buy property under state real estate and contract law - but many will likely rent out those investment homes and condos, at least part of the time. That means Florida’s landlord and tenant law will also come into play. However with foreign ownership, federal law that deals with United States citizens dealing with foreign nationals will also impact every single one of these transactions - and the foreign nation’s laws might apply to the deals, too. For example, treaties might be involved. Add to that the fact that property managers, tenants, real estate agents and others involved in these transactions are going to be communicating in many languages other than English. Inviting foreign investors means people who speak their native tongue which may well be any number of Asian dialects as well as German, Italian, French, Spanish, etc.