Abandoned condo developments in once-booming Miami epitomize the quagmire gripping the Florida real estate market. Housing values are projected to fall drastically across the state — on the surface offering attractive opportunities to value minded investors — but when will the carnage end? Even tourist mecca Orlando is swamped with vacant properties as the numbers of new buyers attracted to the market by federal incentives can’t stem the tide of foreclosures, while the rise in residential sales still fuels hopes of sunnier times ahead. For more on this, see the following article from Housing Predictor.
The backlog of foreclosed homes hitting the market is slowing a housing recovery in Florida as the state battles an economy with one of the highest unemployment rates in the country. However, the Sunshine State is still proving its resilience with improving home sales for more than a year and is starting to show signs of stabilization.
Like most battered areas of the country, Florida has been aided by the government’s first time home buyers tax credit, but an enormous grey area has grown between any sort of rebound and weakened markets. Housing sales are up but prices keep declining.
In Miami, where more new condos and homes were built in five years during the boom than in the past 30, the market is seeing signs of improvement as bankers take over huge condo developments abandoned by developers. More than two dozen have been left to the elements.
Auction companies are having a hey-day in South Florida, which has become a bargain hunter’s paradise even as job losses mount. With mortgages that are harder to find, the Miami market still fights the paralysis of more deflation. Miami is forecast to deflate an average of 24.2% in 2009.
Being on the road to recovery and stabilizing are two different things. Stabilization is the first step in the process, and it appears any sort of real stabilization will take at least a number of more months in Palm Beach, where the local economy is suffering a double blow.
The housing market hit the skids and then Ponzi scheme King Bernie Madoff admitted to ripping-off billions of dollars from investors. At least 1,200 of his victims make their homes in Palm Beach. The market has been flooded with victims’ homes as foreclosures climb. The lower prices are translating to more home sales, but the double whammy is having a devastating impact on the market. Palm Beach housing values are forecast to deflate 15.1% on average for the year.
Local Florida Housing Markets at a Glance
In Naples the market is showing more signs of stabilizing with rising sales as the glut of inventory shrinks. As one of the state’s higher end markets, Naples has known the ups and downs of real estate cycles, and is forecast to deflate 14.2% in 2009 on the average home.
In Fort Lauderdale new condo developers are selling off their inventories of unsold properties just about anyway they can. The bottom of the market may be close in Fort Lauderdale. But it’s hard to tell how long it will take to work through the inventory. Housing Predictor forecasts average deflation on homes and condos of 11.9% for the year.
Tampa area home sales are rising as the inventory of foreclosures is being absorbed by new owners and those seeking a vacation home in the Florida sunshine. But the pattern of sales has been erratic with some months recording higher sales only to decline the next.
The $8,000 federal tax credit for first time buyers is helping to move homes in Tampa. The majority of sales are foreclosed properties that bankers are slashing the prices on to move the inventory before more foreclosures hit the marketplace. Tampa is forecast to deflate 13.6% on average home values in 2009.
In Jacksonville the toll of overly aggressive banking practices is triggering an increasing onslaught of foreclosures as the market is battered by fallout from the financial crisis. Business closings and bankruptcies are hurting the local economy. Aided by a rise in sales, Jacksonville is forecast to deflate 13.6% in average housing values in 2009.
The pipeline of foreclosures is having a devastating impact on Orlando, recognized for being the top vacation destination in the nation. The glut of inventory is forcing prices southward as thousands of properties sit vacant, many of which are not even yet for sale. A balance between the forces of supply and demand will eventually be reached, but not before values decline more in Orlando. Housing values are forecast to suffer 16.7% in average deflation for the year.
In Tallahassee home sales are also improving as the state capitol makes inroads towards stabilizing. However, it’s clear that any sort of additional government aid won’t help many of the homeowners who are losing their homes in the foreclosure epidemic. The mortgage meltdown has made its impact in Tallahassee with home values forecast to fall another 11.8% on average in 2009.
This article has been republished from Housing Predictor. You can also view this article at Housing Predictor, a real estate analysis and forecasting site.