Almost four years after its markets collapsed, the housing recovery is underway in Florida. More than two consecutive quarters of improving home sales provide economic evidence that the recovery in battered Florida is materializing.
It will be a long road to fully recover from its record tumble. Home and condo prices in some areas of the state have dropped as much as 75%. But it's a move in the positive direction for Florida, which entered its' downturn earlier than any where else in the country, battered by two years of damaging hurricanes and the financial crisis.
In Miami housing prices are especially hard hit by the foreclosure epidemic. The hard hit condo market in Miami Beach has an inventory of units for sale that are going to auction. At least 20 condo developments have been stopped from being completed due to the loss of financing because of the credit crisis.
It's a bargain hunter's paradise in Miami, where some condo units are selling for a quarter of what the original asking prices were on new units. Tens of thousands of units sit vacant, remaining unsold. However, despite the upswing in sales, the market is forecast to deflate an average of 26.9% in 2009.
As the surplus inventory gets bought up the market will make inroads towards stabilizing, which could take a number of years in over-built Miami. Big Dade County, where Miami is located is seeing the inventory of condos and homes decrease, but it will take years for the inventory to be sold-off.
 |
| City |
Forecast |
| Miami |
− 26.9% |
| Naples |
− 15.2% |
| Palm Beach |
− 17.2% |
| Fort Lauderdale |
− 13.3% |
| Orlando |
− 13.8% |
| Jacksonville |
− 11.2% |
| Tallahassee |
− 9.7% |
| Tampa |
− 13.6% |
In posh Palm Beach, where the rich and famous play the economy has also been hampered by fallout from the Ponzi scheme of Bernie Madoff, who victimized friends and acquaintances he met in Palm Beach. Although home sales have improved, many residences are selling for a fraction of what they did at the market's peak.
Sales volume should improve more throughout 2009, but mainly from bargain hunters looking for great deals, and as a consequence Palm Beach is forecast to deflate 17.2% on average during the course of the year.
In Naples, where auctions and discounted properties are selling on the cheap the high-end market is ailing but is experiencing a rise in home sales. This high-end market has been devastated by the financial crisis. Naples is forecast to deflate 15.2% in 2009 on the average home.
In Fort Lauderdale an over-supply of condos and homes on the market are weighing it down. Developers are selling off excess inventories anyway they can, offering incentives to buyers. The bottom of the market may be close in Fort Lauderdale, and Housing Predictor forecasts less deflation than last year at least at a rate to average 13.3% in 2009.
In Tampa the blow from the housing crisis has been hard hitting. Prices have been deflating for nearly four years and the inventory of homes listed by real estate agents is decreasing. However, the majority of sales are foreclosures and short sales, pulling down home values. Tampa is forecast to deflate just 13.6% on average home values in 2009. Despite an economy that has been damaged by job losses and growing business failures, Tampa should show further improvements in sales during the year as prices fall less than in the past.
In Jacksonville, which is now the largest metropolitan center in the state due to growth during the real estate boom, the market is still battered by falling prices. However, an upsurge in owner occupants is helping supply a higher level of home sales expected to continue through the rest of 2009.
Jacksonville hasn't been hit as hard as many other places in the state and may have the best chances of making it through the economic turmoil with the least financial hardship. Jacksonville is forecast to deflate 11.2% in average housing values in 2009.
During the real estate boom, investors flocked to buy homes and condos they could rent in Orlando mainly because tourists are attracted to Disneyworld, the leading tourist destination in the U.S. Consequently, prices have fallen by nearly half from the market's peak and tens of thousands of condos and homes remain unsold.
It may take longer for things to stabilize in Orlando's housing market as a result, despite improving home sales. Housing Predictor forecasts deflation to be 13.8% in 2009 in average home values.
Up north in the state's capitol city of Tallahassee home sales are showing an improvement, and because prices never hit double-digit appreciation levels during the boom they're down less. The mortgage meltdown has made its impact in Tallahassee and home values are forecast to still fall in 2009 but at a considerably milder rate of 9.7% on average.
