Fueled by a major increase in home and condo sales, Florida housing markets are making strides towards recovery from the sweeping downturn. Sales increased nearly half from year-ago levels as government backed incentives coupled with lower home prices pushed Florida markets towards stability.
However, the housing downturn is anything but over in Florida, which has seen prices fall nearly half from their peak highs. Record foreclosures are putting a drag on markets. The inventory of foreclosures and bank assisted short sales, in which the lender cooperates to reduce the mortgage are only projected to put further pressure on prices.
In Miami, one of the nation's harshest hit markets, auction companies are selling condos at some of the lowest prices on record. More than two dozen condo projects have been stopped, victims of the financial crisis as developers lost financing commitments from bankers and hedge funds ran out of money to fund their projects.
In posh Palm Beach the market has taken a beating. More homes are selling, but this mainly high-end market will have to overcome the shock of the global financial crisis and the lack of readily available mortgage financing for jumbo mortgages before any real recovery can be made. The housing market in Palm Beach is projected to see sluggish sales through most of 2010 on average deflation of 10.4%.
The glut of condos in Naples, one of Florida's premiere second home markets, is beginning to decline as buyers grab bargain priced deals. As the inventory is absorbed, Naples will see improving conditions, but not before prices decline further. Naples is forecast to see average prices drop an additional 8.5% in 2010.
In Fort Lauderdale the market is in the process of healing with rising home and condo sales, but the bottom of the market will only be achieved with more easily attainable mortgage lending. Since lending markets are still tight, the lack of financing will stress Fort Lauderdale and send prices lower for another year. Housing Predictor forecasts deflation to average 7.4% in 2010.
As one of Florida's largest urban centers, Tampa has suffered fall out from housing bust, but improving sales are aiding a recovery of sorts in Tampa. The absorption rate, however, hasn't been strong enough to find the market on equal footing yet, and that is expected to take at least another year.
| City |
Forecast |
| Miami |
− 13.8% |
| Naples |
− 8.5% |
| Palm Beach |
− 10.4% |
| Fort Lauderdale |
− 7.4% |
| Orlando |
− 9.2% |
| Jacksonville |
− 9.0% |
| Tallahassee |
− 6.8% |
| Tampa |
− 7.1% |
The expansion of the federal government's tax credit to move-up buyers could help, but a recovery will take time in Tampa, which has been hit hard by growing unemployment levels. Tampa is projected to witness average housing deflation of 7.1% for the year.
On the north coast of Florida, Jacksonville has been one of the hardest hit areas in the state in terms of foreclosures. Older homes are being abandoned in increasing numbers by homeowners who see little reason to stay as home prices fall. More than 1 in 4 homes are now in default statewide.
Florida is losing population for the first time in more than 25 years. Jacksonville gained more new residents than any other Florida city during the boom and will take time to unwind from the deflationary spiral. Jacksonville is forecast to see average housing prices decline 9.0% in 2010.
Overly aggressive lending practices have sent the housing downturn into a major economic crisis in Florida's most visited city, Orlando. Disneyworld still ranks as America's #1 tourist destination, but things are tough outside of the Magic Kingdom. Orlando is also Florida's foreclosure capital. The glutted inventory has pressured home prices. Values are forecast to drop another 9.2% in 2010.
In Tallahassee home sales are on the up-swing as eager bargain hunters' move to the state capitol. It's become clear in Florida that state government is doing little to help in the market fall-out. Tallahassee average housing prices are forecast to fall another 6.8% through year end.
