An International View of the Florida Housing Market
The slumping Florida housing market is hammering the Sunshine State, and it’s also making international news. Below is a report on the market from Britain’s Times Online.
Until the Florida real estate slump hit two years ago, the worst thing that Sunshine State residents feared was the hurricane season.
Now, they are in the middle of a different type of storm.
In some areas of Florida, real estate prices have fallen by as much as 40 percent since the height of the property boom in 2005.
While the British Consulate in Miami is unsure how many British expats live in Florida, they believe that there are at least 100,000 of them with valid visas residing in the state.
Not all of them can ride out this financial turbulence.
Kay Patel, a single mother with three children, moved to Celebration, the Disney town in Florida, two years ago and set up a laundry business.
With soaring Florida mortgage, insurance costs and property taxes, as well as the slide in real estate prices, Patel told The Times she was going to have to put her house on the market soon.
She is planning to advertise her four-bedroom, three-bath home with a pool at about $535,000 (£264,000), but is concerned that should she fail to get less than $485,000 for it, she will fall into negative equity.
“We hear that Florida is heading for a two-year recession, and there is no way I can sit that out,” Patel said.
Florida’s slowdown is so severe because its boom was so excessive - house price inflation in some areas was running at up to 20 percent a year between 2001 and 2005.
As prices soared, house building boomed.
Alicia Cervera, an Florida real estate broker at Related Cervera Realty Service, said Florida was experiencing “construction on steroids.”
Craig Studnicky, of International Sales Group in Florida, another broker, said: “We are having to cope with five or six years of oversupply. Right now, the market is a Mexican stand-off. There are buyers out there, but no one wants to drop their prices. The market is at a standstill.”
In some of the more depressed areas of the South Florida housing market, property was selling in 2005 for about $250 per square foot.
That has fallen to between $150-200.
SOURCE: Times Online (UK)
