The Real Estate Encyclopedia
'Cautious optimism' for Florida. real estate
Category - Real Estate Information Sources - Real Estate Information General
GAINESVILLE, Fla. – Aug. 12, 2009 – Florida real estate won’t rebound until the job market improves, but investor confidence in the outlook for business and availability of money are reasons for cautious optimism, according to the latest University of Florida (UF) survey.

“I think we’re on the road to recovery, and even though most markets report they’ve seen the bottom, it’s going to be a long climb; because as long as we continue to lose jobs, the real estate market will be depressed,” says Timothy Becker, director of UF’s Bergstrom Center for Real Estate Studies, which conducts the quarterly survey.

The retail and office sectors of Florida’s real estate market are suffering the most because a large number of people are out of work or uneasy about their jobs, and spending less money, Becker says. Unless consumer buying patterns change dramatically, national retailers will continue to pull back with more store closings and fewer store openings.

There is some good news, though: Signs of confidence expressed by respondents in March about their personal business outlook and the availability of real estate investment money have grown stronger. That optimism is spreading to other types of property.

“As more capital becomes available, more transactions happen in the marketplace, and that’s how most of our respondents get their income,” Becker says.

Often, real estate investors have had to change their line of business in order to make money in an uncertain economic climate. “We’re seeing companies that used to do nothing but development getting out of developing and going into property management, or folks that buy shopping centers or office buildings focusing on buying distressed mortgage notes,” he says.

A drop in survey participation may be yet another sign of the market’s instability. The latest statewide survey of leaders and professional advisers in the industry about Florida real estate trends, completed in July, is the third consecutive survey with a decline in the number of responses, down to 309 from 381 in December.

“I think that’s reflective of what is happening in the real estate industry as a whole,” Becker says. “Participants are leaving the industry because they couldn’t survive, and those people who are left may have no data available to base a response on.”

Florida’s housing market continues to be one of the most depressed in the nation. The worst part of the state by far is Southwest Florida, Becker says. Its huge number of foreclosures and the region’s lack of a diverse economic base make a quick recovery unlikely.

Although survey respondents said they expect housing prices to stabilize and perhaps even rise, current conditions, which include the availability of low interest rates, are creating increased demand, Becker says. “In most parts of Florida, the housing market has gone gangbusters because of all the foreclosed homes on the market and extremely low prices.”

The investment outlook for single-family development increased to its highest level since the survey began, with more respondents than ever believing it is a good time to buy. “As more land comes onto the marketplace at highly distressed prices, the builders can buy up, and that enhances their position of being able to build a house that’s reasonably priced in today’s market,” Becker says.

While the outlook for apartment occupancy has been volatile over the previous five quarters, expectations have taken a positive jump, Becker says. As housing foreclosures continue to be processed and apartment complexes offer deep discounts in rent, more people will leave their homes for apartments.

“In the last quarter, we found that homeowners going through foreclosure either continued staying in their homes because they weren’t getting kicked out right away or they moved in with friends and relatives,” he says. “We’re starting to see some of these people rent apartments.”

© 2009 FLORIDA ASSOCIATION OF REALTORS®
 
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Real Estate Information Sources - Real Estate Information General
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