Florida Real Estate Prices begin Free Fall

August 15th, 2007 Author: admin

foreclosure-300x179 Florida Real Estate Prices begin Free Fall

 

           When it comes to real estate, the myth is that when the music stops, home owners stay put. The traditional myth in regards to real estate is that prices do not go down because when prices get soft, home owners just stay put. That is, homeowners would be unwilling to sell their residence at a discount because this is their “home”. However, this traditional idea is being turned upside down in Florida because so many property owners were speculators. Florida, possibly more so than any other state has had rampant real estate speculators buying multiple investment properties in Miami, Fort Lauderdale, Orlando and other coastal locations. Property in Port Charlotte , on the western portion of the pan handle which has seen a significant rise in the last two years alone is down 5%-10% from recent highs. Now however, the music appears to have stopped. And what is so worrisome is that appraisers are having a much harder time finding comparable recent sales within a 1 mile radius of the subject property. Even worse, foreclosures in the area are now being included as comparables which are pushing down the values even further. It is not uncommon to see property depreciation of 15%-20% in Broward, Miami-Dade, and Palm Beach counties in the south where speculation was most feverish. Polk county, Charlotte and Osceola in the middle of the state are beginning to see softeness as well. And we fully expect to see further depreciation all throughout the state. The coast is littered with unfinished developments and cranes are everywhere as far as the eye can see. We would not expect a correction until at least 2009.

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