In looking at how Florida foreclosures impact Sunshine State economics and real estate behaviors, the focus among many state leaders and economists has been on the rate of foreclosure. Lately, Florida has seen this rate rise appreciably, and also has seen its affect on other parts of the broader economy. In some cases, it’s been marked.
Florida has, for a great many years, been the kind of real estate market that looked at speculation in property and land as a desirable activity, though it’s nowhere near the Wild West show that much of real estate used to be in the past. There aren’t too many buyers out there purchasing swampland sight unseen, though there’s still an element of interesting activity in the Florida real estate market.
Fortunately, many more controls now exist when it comes to land and property in the Sunshine State than was once the case, and it’s a good thing that’s so because the current housing bust would be ten times worse than it currently is if it wasn’t. At the least, several good state and federal programs now exist that have the aim of stabilizing housing markets throughout the state.
This is a desired activity because land and home values, when they decline precipitously, can greatly affect wider economic activity within a state and the municipalities in which that land and property inventory is located. With fewer people paying property taxes or living within a community and spending money, schools and businesses feel the pinch sooner than most, for a fact.
And with less money coming in, businesses inevitably make rational decisions about their own expenditures, including human resource costs. In other words, a cycle begins to occur in which less money making its way into a wide range of pockets with even less money leaving those pockets and making its way back out into the economy.
How a community or a state can control this cycle in order to prevent it from spinning completely out of control and bringing down the whole house is a question that’s under vigorous dispute at present. Some economists advocate for allowing the so-called “free markets” to winnow out the weak while others advocate for a vigorous government response in order to get a handle on the property bust.
Which way the Sunshine State will go — or whether it goes in just one direction or another — remains to be seen. FL foreclosures and the way they can affect all other facets of economic activity is being addressed in what looks like several different ways at present, and that’s perhaps the best way to go about handling the problem, in the end.
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