Real estate and Florida foreclosures and their growth and impact on the Sunshine State’s property markets has been notable as a phenomenon for well over a year now. For a time, Florida was able to avoid the very worst of the crash in property values that many parts of the country experienced (especially over in California and out in Las Vegas), but it seems that the state is now experiencing many of the same issues other states have for some time.
Much of why the real estate markets have suffered so much lately has to do with more than a few faulty assumptions made by investors and home buyers in this very populous state. For a time, the understanding that all economic cycles go through boom-and-bust movements was put to the side, and home buyers thought that prices would just continue to rise forever.
For quite a while, this gamble was paying off, with many home buyers and investors getting into properties for little or no money up front and then selling relatively soon after for a nice profit. However, the foundation for this market was built on sand, and eventually that sand would prove to be unstable over the very long run, especially down in Florida.
Sooner or later, the traditional boom-and-bust cycles of economic activity in real estate and other areas of the economy were bound to reappear and they did. A correction ensued and though there are many reasons for why it began to occur it’s still a fact that many people were sitting on homes that they paid far more for than they’re now worth in the Florida real estate market.
People actually weren’t expecting to invest in homes or properties that were losing value with each passing month, it has to be said. Unfortunately, the drop in prices began to occur so suddenly that many investors and homeowners were caught unprepared and sitting on loans that were soon to adjust upwards, placing them in the position where they owed more than their homes were now worth.
It’s the case that almost no single market in Florida except for maybe certain northern and panhandle areas is immune from this drop nowadays. Homes that were once worth $500,000 or more are sitting unsold on the market and can’t find buyers for even half that amount. Some economists, though, feel that the worst is over and that prices may begin to climb meaningfully soon.
Other financial experts, though, maintain that the market is headed for what they call a “double-dip.” What they mean is that the market has seen a drop, will see a slight rise and then we’ll see a steeper drop in the future before beginning to rise again. What this foretells when it comes to Florida foreclosures is yet to be determined, though an investor who believes that a double-dip is coming can actually profit from it through smart purchase and sale activities, it must be said.
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