Florida foreclosures and their impact on the Sunshine State’s real estate market is still an area ripe for exploration and consideration when it comes to looking at how the state’s home inventory has declined in value over the last 18 months or so. For sure, many other parts of the country experienced this same phenomenon far sooner, especially in Las Vegas. Florida, it seems, has now joined the club.
Much of this issue having to do with foreclosures also has to do with the unreasonable assumptions that many homeowners and investors made when it came to property in this, one of the most populous states in the union. It looked as if prices would continue to increase constantly, which led people to buy much more home than they probably should have done outside of any expected increases in home values.
At the time all this buying and selling and flipping (buying an investment property, oftentimes with little money down, and then selling later for a nice profit) was going on it seemed reasonable to continue that the sand which formed the basis of the foundation upon which much of the housing market in Florida and elsewhere was built on would be stable enough for long enough.
At some point, the natural cycle of economic activity, whether in real estate or in other parts of the economy, will reassert itself. When that happens, a correction occurs such as what’s been going on in real estate. This correction has led to the fact that there are plenty of people sitting on plenty of homes owing much more than those homes are worth in the new real estate markets.
People weren’t looking to invest money in properties that appeared to be losing value in increasing amounts with each passing month, for a fact. Homeowners — many of whom were unprepared when their easy term and low payment loans began to adjust upwards — were caught out owing more than their home was worth and now looking at a monthly payment they just couldn’t afford.
In reality, with the exception of maybe the northern panhandle region in Florida, no market in the Sunshine State is now immune at present from these drops. Homes costing a half-million dollars or more are going unsold and unable to find buyers willing to pay even half of that amount. However, some economists now believe that much of the worst is past and prices may begin to rebound gradually.
Others, however, think a “double-dip” (a drop, a slight rise and then a steeper drop in values) is going to occur and that Florida foreclosures and their growth will be even more notable than they already are. What this means for the economic base of the Sunshine State hasn’t yet been fully sorted out, but it certainly doesn’t portend much in the way of beneficial effects other than for those who have the cash and a desire to invest in cheap properties, it seems.
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