While the average price per home has dropped and sales have stalled, Florida appears as if its real estate market could recover, according to a recent press release by Cotton & Company released on Business Wire. Compared to other markets around the country, Florida has one clear advantage: “trophy” and “oceanfront” properties that attract foreign investors. At the moment, it appears as if investors from South America and Canada, as mentioned in the press release, may help Florida recover, and we’ve also seen, on this blog, an influence from Europe.

Cotton & Company predicts a 10-year rebound for local prices, which is reasonable. Considering the steep climb in prices between the late 1990s and 2006, getting back to that level at a reasonable pace, and with ethical lending and real estate practices employed, will take time.

As we had seen last year, oceanfront communities like Destin had shifted to renting in real estate – buying simply wasn’t common. Because of this, fewer new properties were built for sale, including both commercial and residential real estate, but agents renting to vacationers instead expanded the amount of properties offered to those staying in the area for a few days.

Vacationing is a significant industry in Florida, and while more notable beaches will attract those from overseas, other areas, such as the Gulf Coast, have turned into staycation destinations, which have changed the local economy. Attracted to the white sands and clear green waters of the Gulf, vacationers from areas within driving distance will rent a home for a few days to a week.

But vacationers, however, rarely buy, and while an increasing tourism industry brings in more jobs and more money locally, it keeps commercial and residential real estate stagnant. How foreign investors choose to buy up Florida properties may change the pace of local real estate, however.

Some trends we’ve seen nationally have been a plateau on sales for homes and lowered property values, although such incentives, like the first time home buyers’ tax credit, were designed to stimulate the economy. Nevertheless, the overall picture isn’t one entirely of desperation: The real estate market in 2010 is somewhat stable, as we saw in previous critiques, and is still in a recovery stage. Since 2007, the market went down due to foreclosures and went back up slightly in 2010, although the average home price is significantly lower than four years ago and fewer new construction projects are being started.

Florida, however, seems to be bucking this trend. Although for a few months, we detailed the going-ons in the Destin and panhandle area, the increase in real estate isn’t exclusive to this part of the state. While Venice and Sarasota are highlighted in the article, Florida has seen, overall, increases in home sales since 2009. In fact, this has been a 58-percent increase in a 12 month period. This doesn’t include foreclosed homes and short sales, but, instead, normal, non-distressed properties. The prices on these properties, on the other hand, have dropped since the end of 2009, although the increase is slight over a 12-month period.

Could this be a sign that the real estate market may be recovering? Overall, probably not, as we’ve seen various real estate writers mention that the market will plateau slightly in this recovery period. This means that, while Florida has been seeing an increase in home sales, areas of the Midwest, particularly Michigan with low unemployment rates, will see lowered home sales and housing prices. All of this averages out to a market that shouldn’t see many distinct changes since 2009, as we’re still considered to be in a recovery period for the real estate market.

Although not affecting Destin directly, the real estate market in Florida overall has seen less of a drop in homes bought and sold due to Europeans purchasing homes in the Sunshine State. This, of course, includes home sales in Destin, but in Florida, the state has seen less of a drop in homes sold due to an increasing European market for Florida homes. While the article in the New York Times doesn’t specifically state whether the homes sold are foreclosures, the fact that 30 percent of the homes sold in Florida in 2008, compared to 15 percent in 2005, indicates that overseas buyers have a significant presence in Florida’s real estate.

This trend can be seen in Destin, somewhat. Destin home sales have been on an upswing this past year, and this includes both standard home selling and foreclosures. Part of this figure includes those moving to Destin to stay in the area or to purchase vacation homes, but foreign buyers also contribute to this figure, especially as Destin is an up-and-coming vacation town. While many brand new developments in Destin remain empty, current homes or foreclosures are being sold regularly and more than a year ago.

With Destin and Florida overall, having foreign buyers isn’t necessarily negative, as the properties are being bought instead of remaining empty. With foreclosures in particular, an empty property might mean one that is untended and could, perhaps, become a transitory home for any animals. While the article indicates that these properties bought by Europeans are used as vacation or secondary homes, many Americans use a Florida home, whether in Destin or Miami, for the same purpose. Once the American real estate market picks up and the general public has more buying power, the percentage of European-bought Florida homes might be lower overall.