The Changing Reality of Florida Real Estate

Sometimes what people think may be happening and what is actually occurring in the real estate market does not coincide. So let’s look at the facts, and hear what some experts in the field have to say about Florida’s economy and real estate.

At the recent Florida Realtors’ 2012 Real Estate and Economic Forecast Conference, Chief Economist Dr. John Tuccillo stressed the slow but steady upward trends in Florida housing and employment, both of which have been overlooked. With prices at attractive levels, investors are back in the market and the distressed property market has stabilized. International demand has risen over the last year, adding to the positive trends in Florida real estate. Realtor panelist Clark Toole agreed, citing the increases in population and employment as positive drivers for the state’s economy.

In Florida and nationwide, restrictions on credit have slowed the real estate market’s recovery. While the average credit scores of approved loans under “normal” circumstances are around 720, in 2009 and 2010 the average was around 760. Easing credit conditions to “normal” could increase sales 15-20% higher. Dr. Lawrence Yun, NAR chief economist, shared his belief that there will be a 10% price increase in South Florida as bargain hunters and foreign buyers boost sales – taking advantage of prices that are too good to pass up.

Even experts outside the industry agree that Florida should have positive growth in 2012. While Florida employment growth has been weak and its recovery sluggish, Mark Vitner, senior economist at Wells Fargo, also had encouraging remarks on the state. He pinpointed tourism and healthcare as leaders in the employment recovery. International visitors to Florida’s many vacation destinations have boosted tourism, while concurrently stepping up as investors in the state’s housing market. Vitner indicated specific areas in the state where prices have bottomed-out and employment has turned around.

The Florida recovery is a marathon, not a sprint. Although the pace is frustrating at times, this slow and steady improvement is good for Florida. The state is moving in the right direction. Realtors can encourage positive thinking about the real estate market with their clients and back up their case with the facts. The national consumer sentiment number of 67.7 beat last month’s 64.1 and the analysts’ forecast, showcasing that consumers’ attitudes are brighter across the U.S. Consumer sentiment has improved each of the last four months. As perceptions shift to better match reality, sales and your business should change for the better.

 Erica Cross, research analyst, Florida Realtors

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