The impact of the BP oil disaster is making a devastating impact on the Gulf Coast region of Florida, while other areas of the state are seeing little fallout in their real estate markets. Florida’s housing market was seeing a rebound in sales, jettisoned by federal tax credits, near record low mortgage rates and lower house prices before the massive oil spill threatened to destroy the state’s pristine coastline.
But the fallout of oil hitting Florida’s beaches has been limited with only globs of oil or tar balls washing ashore. Only Pensacola, in the most northern reaches of the panhandle has witnessed any black stains from oil, and work crews hired by BP oil have quickly cleaned it up in order to save the beaches from disaster.
The black slick of oil remains mostly offshore, caught up in the Gulf Coast stream, pushing it back out into the Gulf. Tourists flock to the state to enjoy its white sandy beaches in the panhandle. Tourist bookings for the hot summer season are rising in some areas, particularly in the eastern section of the panhandle, where few tar balls have washed ashore.
However, record all-time foreclosures are also making it difficult for many areas of the state to rebound from the downturn. However, home and condo prices are starting to show an upward trend in many areas of the state.
In Tallahassee away from the gulf, sales are on the up-swing as eager bargain hunters’ move to the state capitol. Florida state lawmakers have done little to help in the fall-out of the housing crisis. Tallahassee average home prices are forecast to fall another 6.7% through year end.
In the state’s largest metropolitan market, Miami condos are selling at increasingly brisk rates as buyers turn out to take advantage of bargain prices. The recovery process is expected to take a number of years in Miami, where over-building by developers of high rise condos are selling at as much as 80% below their first time asking prices.
Slowed by tougher mortgage lending criteria, the market should make strides to over come its downturn in the remainder of 2010, but is still forecast to see an average loss in home values of 11.2% through the end of the year.
Up the coast in Palm Beach, where many of the rich and famous purchase vacation homes the market has seen an improvement in sales. The glut of expensive estate homes has dwindled, but the condo market remains in a weaker state. Palm Beach is forecast to sustain a better average housing deflation of 8.8% for the year.
In Naples, the inventory of condos is dropping, but concerns over the impact of the BP oil disaster are on buyers’ minds, slowing the progress of the market’s recovery. A larger inventory of homes and condos hitting the market raises questions of concern over the area’s recovery. Naples is forecast to see average prices decline a lesser 6.3% in 2010.
The footing Fort Lauderdale got towards recovery has been damaged less than other areas of the state, mainly as a result of being on the east coast side of Florida away from the Gulf. But tighter mortgage standards are making it tough for many would-be buyers to obtain financing, impeding the flow of progress. Fort Lauderdale is forecast to sustain average housing deflation of just 5.3% in 2010 as market conditions gradually improve.
As two of the state’s larger urban markets, Tampa and Orlando have suffered through the financial crisis with especially high levels of foreclosures. Recoveries will be slow in both communities. But as home and vacation condo sales improve for the areas along with employment levels Tampa and Orlando should see recoveries develop.
Orlando is projected to pull out of its downturn on increasing home sales with forecast deflation for the year of a lesser 7.2%. Tampa is forecast to see average home values decline just 6.3%.
On the north coast of Florida, Jacksonville was aided by federal tax credits, but higher unemployment has put a stranglehold on any long term hopes for momentum in sales. Banks are slashing prices on foreclosures to get them sold in Jacksonville, where nearly half of all properties selling are either foreclosures or bank assisted short sales. Jacksonville is forecast to see average home prices deflate 6.9% for the year.