Has Florida Real Estate Hit Bottom? NAR Economist Thinks So
According to National Association of Realtors senior economist Lawrence Yun the Florida real estate market is nearing it’s bottom and he expects 2008 to see an uptick in pricing and sales. With developers cutting back new home inventory by 70 percent, a weak dollar bringing in new foreign buyers, rising rents, and a backlog of potential buyers the market is expected to recover in 2008.
Saying all this and seeing the logic of it, anything that a NAR economist says these days should be taken with a grain of salt. The track record of these economists as cheerleaders has been spotty to be polite. A National Association of Realtor economist is an industry advocate not an unbiased analyst.
However, if you look at the Florida market logically, their should be a chance of recovery due to the factors mentioned above. Counteracting the positive market forces are a tight lending environment combined with higher interest rates that could create even more foreclosures than the market can handle. In the end it will be a matter of inventory. Too much desperate inventory and the market will continue to falter while a tightening inventory will provide a base for future growth.
Either way, Florida should provide an interesting glimpse into the national real estate market over the coming year.
The economist thinks there is a lot of pent-up demand in the local market from buyers waiting for more significant price drops. But rising rents are prompting some of them to start shopping. Sellers are also lowering their expectations. Florida also continues to capture 26% of foreigners buying homes in U.S. and will continue to attract northern retirees.
“Long term, baby boomers, huge population on the verge of retirement and we know where they want to go,” Yun said.
New home construction starts in Florida are down 70% from the peak in 2005. via MyFox Tampa Bay
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Comment by Frank Borges LL0SA- Broker FranklyRealty.com on 5 October 2007:
Bottom?
People thought we were at the bottom and then a developer just announced an AUCTION of 30 homes at 47% off the former highest price.
I blogged about it
Frank Borges LLosa Broker Owner
Blog.FranklyRealty.com in Va
Comment by Sam Chapman on 5 October 2007:
I hope the NAR is right. I have a guy in Florida waiting to sell before he buys in Austin. If the bottom is here, perhaps things will get a bit stronger in a while and he can actually sell and move here. Austin has seen that quite a bit – buyers in other markets waiting to sell before buying here. Besides my selfish reasons, I really do hope that Florida stabilizes for everyone’s sake.
Comment by linda on 5 October 2007:
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Comment by Hojin on 5 October 2007:
I read the article from Lawrence Yun and he is wrong about 2 things here in Florida. The report cites the condo market outperforming single family homes but really the condo market is much worse here. I try not to have too many for sale because they are so difficult. The report also cites rising rents but they are falling here in Florida.
Stats are great for figuring out what happened after the fact but not quite as effective for predicting events. I also have a post on this topic at http://sworlandoblog.com/2007/09/04/nar-predicts-improvement-in-q4-2007-for-the-real-estate-market/
Comment by Mike on 7 October 2007:
Bush’s Blight upon Florida.
In the year 2000 over half of the voting population in the state of Florida was the deciding factor in shaping the future of this country for the foreseeable future. The fact that these ignorant, civically challenged and down right lazy/stupid morons were responsible for ushering in the most devastatingly inept and corrupt government this country has ever experienced is some thing that can not be forgiven. We, the people that made the right choice in 2,000, will have to live through this blight that you have brought upon us for the next 25 years, at least!
I firmly believe that the next devastating terrorist indecent to occur in this country will be implemented and carried out by a group of deranged, war scared Iraqi’s that Bush’s misguided and corrupt war has spawned. Thousand have died and thousands will die because you failed to grasp the obvious-G.W. Bush is ignorant, arrogant, inept, corrupt and evil. How you failed to grasp these fundament truths, I will never understand, or forgive.
For you Righteous Christians that hailed Bush as the next prophet, I will submit to you that the blight that has been born upon you by the devastating hurricanes and now the failing economy is Gods vengeance and God will continue to punish you for the rest of eternity.
For the rest of us, may God have mercy.
Comment by Bill on 9 October 2007:
Mike easy cowboy. When do you get realeased from the asylum?
Comment by Sundream Estate on 10 October 2007:
Florida and all the other state in USA have not hit the bottom get. The buyer are waiting to they are really sure that the prices is not going done any more, before they buy. And so long the bank don’t know which bank or finance group is sitting with all the mortgage paper and what they are going to do with there loss – so long are the bank holding in there one money and not give any mortgage so long are the market prices going down. A bad hamster weal.
Comment by Florida Land Buyer on 5 November 2007:
Florida has challenges that the rest of the country does not share.
1. Current property tax laws seriously penalize newcomers compared to existing residents. Tax fairness is getting worse, not better. I know very few buyers that would sign up for 10% property tax increases every year so that their full time neighbors can get welfare-like property tax caps of 3% per year.
2. The Florida public believes that migration of out of state retiring boomers will drive the market beyond what the local public can afford. A real analysis of census projections suggests there will be many more Florida residents retiring in place than migrating to Florida. In-migration may have peaked as a percent of new retirees in Florida.
3. The NAR seems to believe that lying from top level positions like their economist will make it easier for the average Florida Realtor to do their job effectively. The majority of the home buying public is far better informed than ever. The backlash against Realtors who now appear to the public as lying mercenaries is staggering. Customer trust is not achieved or maintained by deception.
Comment by Tanya Kulaga REALTOR® CRS, ABR, GRI on 28 May 2008:
I have helped several individuals relocate to Lawrence, KS from Florida over the last year and it’s been difficult to explain to them that we are not having the same problems with our real estate market here. Homes in Lawrence are not loosing value and sell quickly. It has surprised most of my clients that most of the homes they are most interested in touring end up under-contract by the time they arrive in Kansas to look at them. It’s a whole different world here in Lawrence, KS.
Tanya Kulaga REALTOR® CRS, ABR, GRI
Realty Executives – Hedges Real Estate
http://www.SearchLawrence.com
Comment by Really? on 6 October 2009:
Wow, this guy looks like a complete IDIOT. Hopefully nobody is using him to for his spot on forecasts anymore. He’d do better (and probably be more accurate) as a palm reader.