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Florida Real Estate - Is Now the Time to Come Back Into the Market?

By Michael Letcher

Republish: EasyPublish™ Published: 19Jun2009 Word count: 852 Viewed: 127 time(s) Get Free Content For Your Site

If you are on the sidelines thinking about the right time to re-enter the Florida real estate market, the mixed signals being sent by the market make it that much 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 significant number of homeowners have refinanced to take advantage of lower interest rates. Refinanced homes are important because they help distressed homeowners lower their monthly payments which prevents additional homes being placed on the market for resale that are in some phase of the foreclosure process.

North Florida has a better employment base which has resulted in a lower number of foreclosures compared to other areas of the state.

Property taxes have gone down not due to the laws passed by the Florida legislature, but because lower home values for the past three years are now 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 such organization is offering to waive the listing side commission if you purchase a qualifying home that suffers a further decline in value after you buy it and has to be resold again.

During 2009 if you meet the requirements you could qualify for an $8,000 first-time home buyer tax credit being offered by the federal 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. The amount you will save in your monthly payment if you wait for further home price declines might 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 worst areas in Florida are continuing to wrestle with up to 16 months of home supply. It's not just the quantity of the homes in that inventory that is the issue, but the mix is also important. 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. These homes take a lot longer to close and more importantly they distort the competitive market analysis data when they sell. 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. In this environment where the home inventory is mixed many experts continue to forecast falling Florida housing prices through the end of 2010.

Homes moving through the foreclosure process in Florida are managed through the court system. That can add significantly to the amount of time it takes for a distressed home to clear the system and be eliminated from the current home inventory.

The Florida unemployment rate is closing in on 10% with almost 900,000 unemployed workers. Although the state had some success in attracting new companies from 1980 until the mid 1990's, it has struggled to attract new businesses in recent times remaining heavily dependent on the tourism and housing industries. Florida's limited job base still struggles to support the total cost of home ownership in the state. While it is impossible to present all the current information about the Florida real estate market that you need to make an informed decision on when to re-enter the market, the above items should give you plenty to consider as you weigh your options.

As you think about it please remember that each Florida market is a local market and you have to look at it that way when considering your decision. Each market has its own housing supply, price levels, employment base, and foreclosures in the pipeline. Some of those markets are going to come out of the current 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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