Advice regarding purchasing in a big foreclosure market?

[Displaced]

I'm starting to do some initial research into moving to be more Mustachian.  We currently live in the mid-Atlantic with high cost of living, high mortgage (290,000 left from a 320,000+ mortgage -- I know, I know, I'm punching myself: this was before I was converted), state taxes, but stable good jobs.
I'm thinking of moving back to Florida, as we have family there, and putting actually 20% down on a 200,000 house (which would buy us a house about 30 years newer based off realtor advertised homes where we would look to settle).  Advertised positions for our careers are actually higher than our current salaries, which would give us the freedom to stash or me to work a little less so I could spend some more time with the young children.  And there seem to be a lot of positions advertised so it seems the job market is okay.  Even without a change in salary, our savings would be about 1,700 extra per month just from the lower mortgage and home taxes, as well as no state taxes in Florida.  Another plus is the Florida scholar program.  We do want to save for some higher education if there's some room for it after our goals, but in Florida if you get good grades and high SAT scores your tuition will be paid for.  Though maybe that program will be cut, who knows?  A potential bump in salary based on advertised positions could mean we can actually get rid of our student loans quickly and get the plan moving for retirement.
Ok, the question?  Florida had a big foreclosure problem with the recent market correction.  Homes I'm looking at are cheap and there are a lot of short sales and current foreclosures even in "good" neighborhoods with higher rated schools.  Am I getting too excited about a cheaper and newer home and the newfound gift of Mustachianism and missing a potential pitfall?  If we buy a home in a market like that (Tampa area), should I be concerned about a general turn down in the economy there like layoffs, etc?  We would potentially stay there as homeowners "forever" so the home would have time to take a hit and turn around price-wise.  And of course we would pay it off in 15 years anyway.
Any experience in more global economy/real estate implications to possibly moving into an area that seems was very hard hit by the recession?  TIA!

[digger]

I guess a lot of what you are asking revolves around your field of employment, are you somewhat recession proof, or prone to the effects of a local market downturn?

I'd say analyze the specific market you are buying into, what is the local economy driven by? How did it fare in the recession, is it on the rise? Has it adapted? What has real estate done down there in the past 12 months?

Lots of questions, I know. 

Ultimately there is always risk in change, and or investment. However, if you are buying a foreclosure/short sale, it is likely as cheap as it's ever going to get, barring the area becomes a slum (very unlikely in most instances), and with current mortgage rates as low as they are, it is HIGHLY improbable you will lose money. What most people don't realize, is that you SHOULD buy when everyone is scared, that's when prices are low. I am always amused by everyone who is scrambling to buy gold right now, when it's at an all time high, and the same people are terrified of buying real estate, which is at an all time low.

Good luck with the move, it sounds like it would work for you in many ways for the better!

[kendallf]

I'm in FL (Jacksonville area) and our housing prices are what many areas of the country would call ridiculously low.  I think Tampa's real estate market has been even harder hit than ours. 

The downside to the raft of foreclosures has been that every neighborhood has a vacant house or two, including high end areas where this would have been unheard of five years ago.  I live on a street of 40 year old, brick/block ranch style houses, 2 car garages, 1/3 acre lots; you know, basic suburbia.  We have at least 4 vacant houses in my immediate area.  Some of these have bank owners that at least do things like mow the lawn, some don't.  Thing is, it's so widespread it doesn't really seem to put people off when they're looking to rent or buy, anyway.

It sounds like your case will depend much more on jobs and their stability; you can definitely find a much cheaper house.  I just bought an "empty nest" house for $35k; we're renovating now and plan to move later this year and rent out our current place.

[capital]

I'm starting to do some initial research into moving to be more Mustachian.  We currently live in the mid-Atlantic with high cost of living, high mortgage (290,000 left from a 320,000+ mortgage -- I know, I know, I'm punching myself: this was before I was converted), state taxes, but stable good jobs.
I'm thinking of moving back to Florida, as we have family there, and putting actually 20% down on a 200,000 house (which would buy us a house about 30 years newer based off realtor advertised homes where we would look to settle).  Advertised positions for our careers are actually higher than our current salaries, which would give us the freedom to stash or me to work a little less so I could spend some more time with the young children.  And there seem to be a lot of positions advertised so it seems the job market is okay.  Even without a change in salary, our savings would be about 1,700 extra per month just from the lower mortgage and home taxes, as well as no state taxes in Florida.  Another plus is the Florida scholar program.  We do want to save for some higher education if there's some room for it after our goals, but in Florida if you get good grades and high SAT scores your tuition will be paid for.  Though maybe that program will be cut, who knows?  A potential bump in salary based on advertised positions could mean we can actually get rid of our student loans quickly and get the plan moving for retirement.
Ok, the question?  Florida had a big foreclosure problem with the recent market correction.  Homes I'm looking at are cheap and there are a lot of short sales and current foreclosures even in "good" neighborhoods with higher rated schools.  Am I getting too excited about a cheaper and newer home and the newfound gift of Mustachianism and missing a potential pitfall?  If we buy a home in a market like that (Tampa area), should I be concerned about a general turn down in the economy there like layoffs, etc?  We would potentially stay there as homeowners "forever" so the home would have time to take a hit and turn around price-wise.  And of course we would pay it off in 15 years anyway.
Any experience in more global economy/real estate implications to possibly moving into an area that seems was very hard hit by the recession?  TIA!

Florida is generally a difficult and dangerous state to walk/bike/use public transportation in, so your transportation expenses are likely to be higher. Additionally, Florida is a very low-lying state, so if some of the more severe climate change scenarios take place, there's a lot of potential for flooding. I would avoid low-lying property:
http://wusfnews.wusf.usf.edu/post/rising-sea-levels-how-much-tampa-bay-would-be-under-water
The climate will likely become unpleasantly hot for more of the year, as well.