The Florida real estate market continues to send out mixed signals as it wrestles with home prices that have declined for 41 straight months and up to 16 months of housing supply in the hardest hit areas. As you consider whether now is the time for you to re-enter the market, here is some important information you should know.
If you are one of the people who has been holding out for the right time to come back into the Florida real estate market, the confusing trends in the market itself make it a lot harder for you to decide whether now is the right time to buy a new home in Florida.
On the positive side, there are several important trends that you should consider.
A large number of homeowners have taken advantage of lower interest rates and have refinanced. Refinanced homes are critical because they result in lower monthly payments to help distressed homeowners resulting in fewer additional homes being added to the market for sale that are going though some part of the foreclosure process.
Northern Florida has a stronger economy and job base which has contributed to a lower number of foreclosures as compared to elsewhere in the state.
Property taxes have come down during the past three years - not because of the legislation passed but due to the fact that lower home values have to be reflected in the annual property tax bills.
Some of the major realty organizations are offering home buyer price guarantees to encourage prospective buyers like you that may be currently on the fence. One realty organization is trying to address your concerns about the market dropping further by offering to waive the selling side commission if a qualifying home you buy goes down in value after your purchase it and it has to be resold again.
If you satisfy the requirements, though the end of 2009 you could qualify for an $8,000 first-time home buyer tax credit from the US government.
One of the biggest reasons you should consider re-entering the Florida real estate market now is the fact that mortgage interest rates remain near historic lows. What you will save in a lower monthly payment by waiting for further drops in home prices will be more than offset by higher interest rates.
On the negative side, the following would suggest that now is not the time to come back into the Florida real estate market and that you need to remain on the sidelines at this time.
Some of the most troubled areas in Florida still have up to 16 months worth of home inventory. The sheer volume of homes in the inventory aren't the only problem but also the mix of homes in that inventory. A significant portion of that supply is already at some stage of the foreclosure process and includes everything from short sales to homes already taken back by the bank. It takes much longer for these homes to close and when they finally sell, the throw off the competitive market analysis data. New home buyers and their realtors can end up spending weeks trying to convince bank appraisers that traditional homes being purchased are worth more than a comparable short sale home that recently sold in the same neighborhood. During this environment of a mixed home inventory, some experts see Florida housing prices falling all the way through the end of 2010.
Homes going through the foreclosure process in Florida must go through the court system. That can increase the amount of time it takes for a distressed home to move through the system and be taken out of the existing home inventory.
The Florida unemployment rate is closing in on 10% with almost 900,000 unemployed workers. While the state had limited success bringing in new companies through the mid 1990's, it has struggled recently to attract new businesses and continues to be heavily dependent on the tourism and housing industries. Florida's narrow job base still faces a significant challenge to support what is costs to own a home in the state. While it isn't possible to present you with all the details of the current Florida real estate market, the items above should give you plenty to consider as you decide when to make your move.
As you weigh your options, please consider the fact that each Florida real estate market is a local one when making your decision. Each market has its own housing supply, price levels, employment base, and foreclosures in the pipeline. There will be some regional markets that will come out of this downturn a lot faster than others. And if there is one thing that the recent market boom taught us is that once everyone is talking about the recovery it probably too late for you to re-enter the market at a reasonable price level.
As a result, the best thing that you can do to pick the right time to re-enter the market is to work with a local Florida realtor to get the data that you need to make an informed decision. If you don't want to research all of the above items, at least take the time to find out the inventory mix of traditional homes for sale compared to those that are in some part of the foreclosure process in your area. My suggestion would be for you to wait until homes in the foreclosure process have fallen to less than 20% of the total home inventory in your price range before coming back into the Florida real estate market in your area.
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