Expert Predicts Slow Florida Housing Market Turnaround
A national economist told representatives of the housing industry not to count on a sales turnaround in the Sunshine State for at least 18 months.
“Are things going to turn around next year? No,” said Ted Jones, Senior V.P. and chief economist with Houston-based Stewart Title Guaranty Co., one of the nation’s largest title companies.
Jones predicted a turnaround won’t start until sometime in 2009 - enough time for inventory to adjust to what’s expected to be a flood of Florida foreclosures.
Jones, keynote speaker at Florida Association of Realtors’ convention and trade expo, addressed more than than 1,500 people involved in the Florida real estate market.
Some Realtors were more optimistic than Jones on the outlook for 2008. But Jones was blunt as to source of much of the current angst in the housing sector that’s hitting California and Florida mortgage holders particular hard.
Subprime lenders, who knowingly loaned money to certain individuals with the full knowledge they couldn’t afford them, is a huge reason for the Florida housing market’s difficulties.
“If you think it’s bad now, we haven’t heard the end of this,” Jones said. “We’re going to have another 18 months of ugly coming out of this subprime mess.”
Jones also told real estate agents to be honest about inventories, “to sober up sellers.”
The topsy-turvy Florida housing market - and its effect on the national and local economies and the stock market - has become one of the stories of the decade.
While Florida home sales and prices soared just two years ago, now, there’s a massive housing glut and home prices have dropped.
Last month, the Florida Association of Realtors reported that June sales in Brevard County fell 21 percent, compared with the previous year.
The median sales price - the point at which half the homes sell for more, half for less - dropped 15 percent, to $198,000 over the year.
In the Sunshine State as a whole, there were 12,954 sales in June, down 30 percent compared with the previous year.
The June median price of $243,200 was down 5 percent from the previous year, even as Florida mortgage rates remain at or near historic lows.
SOURCE: Florida Today
