Florida’s property market has collapsed, but with the worst over, it could be time to swoop in the Sunshine State

It’s freezing outside, there are at least a couple more months to go before the weather warms up, and the idea of a holiday home in the sun is probably pretty tempting right now. But Spain’s not hot enough, and the Caribbean and the Seychelles are too expensive. Could Florida be the answer?

With its country-club lifestyle and balmy climate, the Sunshine State has traditionally been popular with British buyers. In the past 18 months, however, it has fallen out of favour, as prices have come crashing down by 50% or more from their peak. Florida had the second highest foreclosure rate — the equivalent of repossessions — in America in 2008, affecting one in 22 properties. Many remain empty and abandoned, after being seized by the banks.

“Some people just dropped the keys and left — they were effectively handing the property back to the bank,” says Todd Swann, owner of Swann & Associates, an estate agency based in DeLand, central Florida. “Pricing didn’t seem to matter when times were really desperate. It felt like we were working in a morgue.”

In recent months, things have started to pick up. Although prices remain low, properties are starting to move again as people try to make the most of the bargains on offer. For UK-based buyers, there is also the exchange rate to consider: although the pound is already at a nine-month low against the dollar, some analysts expect further falls, which would add to the attraction of buying now.

At face value, there do seem to be incredible deals out there, with flats in some condominiums on sale for as little as $15,000 (£9,700) — sites such as foreclosuredataonline.com give an idea of what’s on offer. Yet it’s a case of caveat emptor, warns Bill Cowie, director of British Homes Group, a Florida-based company running online auctions where prices start as low as one cent, with no reserve. “A $15,000 condo might sound good, but it’s in a building with no homeowners’ association, with a wreck of a kitchen,” he says.

Instead, do your research, visit America in person — don’t even think about buying blind off the internet — and make sure your chosen area is an attractive one with good infrastructure.

Where should you go? Florida’s two coasts have different personalities: the relaxed west coast, with its subtropical temperatures, is centred on elegant, tree-lined Tampa and classy Sarasota, with its orchestra and concert programme. The east, by contrast, is defined by hectic Miami — cruise-liner port and nightlife central — and luxurious Palm Beach. Inland is Orlando — with Walt Disney World on the doorstep and easy access to both coasts.

If you like the thought of bath-warm seas, head west. Here you’ll find everything from supersleek condo units to estates with elegant colonial-style houses set in carefully landscaped grounds, complete with waving palm trees. Al Horrigan, chief executive of the Sarasota-based RSVP Real Estate, an associate of Savills, says prices on the western coast, from Tampa down to southern Sarasota County, appear to have stabilised, which means good deals for buyers whatever the price range.

At the bottom end, you can pick up a two-bedroom, lock-up-and-leave flat in a condominium within walking distance of the beach for less than £130,000 — although you’ll have to move fast, as competition is tough.

At the other end of the scale are the “McMansions” in ritzy Longboat Key, just offshore from Sarasota. Once priced at £1.5m, they can now change hands for just £520,000. Horrigan says the mid-market is the safest option: a detached three- to four-bed waterfront home with pool starts at £390,000. “Single family homes are always a better investment than condominiums,” he says. “More people want them, so they’ll always have a higher resale value.”

If you prefer a wilder social life, head to Miami, for beaches, bars and nightlife. South Beach, in particular, has a trendy retro feel, its art-deco architecture mixed with towering skyscrapers. Oceanfront property is always going to be a safer investment here: while prices have come down 30%-50% from their peak, they are starting to stabilise.

Karla Abaunza, broker of Luxury Living Realty (luxurylivingrealty.net), a Miami Beach-based agent, recommends focusing on the first five roads south of Fifth Street, where half a dozen luxury condominiums represent the best of what’s on offer; a two-bedroom condo would set you back £490,000, but don’t forget the stiff monthly management fees of about 60p per sq ft.

If you prefer to be away from the city, try Fisher Island, once the home of the Vanderbilts and now an exclusive community, accessible by ferry from South Beach. The cheapest property available at present is a three-bedroom house, in need of renovation, for £580,000. Prices can reach the millions.

In Orlando or other inland areas, it’s worth considering a gated community, for a property you can lock up and leave. Stirling Sotheby’s International Realty (stirlingsir.com) has a three-bedroom house in the Palisades, a golf community in Clermont, west of Orlando, for £120,000; the owner gets access to a pool, boating and tennis courts.

Northeast of Orlando, in the DeLand area, you are near Ocala National Forest and St John’s River, and still only an hour from Mickey and his pals.

Properties with land are a particularly good buy now — land values have dropped so sharply that the extra acreage is almost free. A three- to four-bedroom detached property, with outbuildings and a pool, costs between £116,000 and £162,000.

As with any overseas purchase, there are potential pitfalls. If you plan to a buy with a American dollar mortgage, then any further fall in the pound will increase your monthly repayments; for a fee, you can hedge against this, through a company such as World First (worldfirst.com). Or take out a mortgage half in pounds and half in dollars. Don’t forget that you will also be liable for real-estate tax — a yearly fee equivalent to 2% of the purchase price.

Nor should you count on funding your purchase by letting out the property: many condominium associations have rules governing how many rentals you are allowed in a year. Other local restrictions can also apply.

If that all sounds too complicated, you could always follow the example of Beverley Byrne and her husband, Richard Hearn. During a visit to Florida 18 months ago, the couple, both in their fifties, were tempted by a three-bedroom waterfront villa in Cape Coral, on the west coast, on sale for less than £195,000, but they decided not to restrict themselves to one area.

“Rather than become landlubbers, we bought a 44ft trawler yacht for $69,000, and we’re off exploring Florida’s Sunshine Coast,” Beverley says. Then she adds: “There are still plenty of real-estate bargains out there should we change our minds.”

Golden opportunities? A look at what’s on offer around the state

Palm Coast £180,000

Built 12 years ago, this 1,757 sq ft villa has three bedrooms, three bathrooms, one reception, a pool, a garden and a two-car garage. It is in Grand Haven, a gated community on the east coast of Florida, popular with British buyers. The agent estimates that maintenance costs would be about £1,100 a year. 00 1 386 445 9288, ecpremierproperties.com

Bradenton £130,000

This 1,861 sq ft villa in the Tampa Bay area, built in 2006, has four bedrooms, all with ceiling fans, two bathrooms and a large living room. There is no private pool, but it does come with a double garage, a large back yard and lakeside views. RSVP Real Estate, in association with Savills; 020 7016 3740, savills.co.uk/abroad

Davenport £81,000

This three-bedroom, two-bathroom house is part of a gated development in Davenport, Polk County, which is 20 miles from Orlando. The 1,700 sq ft property, which has an outdoor pool, was bought by the present owners for almost double the price — £156,000 — in 2007. 00 1 407 396 9914, britishhomesgroup.com