It must be understood that even though there seems to be a great deal of bad news vis-à-vis the housing market in Florida, it is not just bad news out there. There is some good news and one looking into the market has to thus be able to distinguish the good from the bad. For example, right now, the personal buyer and investor can buy homes with low interest rates and reduced prices of 50 percent or more. This may increase anxiety for sellers though but for buyers, there should be smiles on faces. Those in South America and Europe – concerned about currency flops at home – are perhaps being a bit too enthusiastic in their purchasing power though, negating important factors such as quality and maintenance costs. Russians too seem to see South Florida as their dream answer with many purchasing condos in markets that had not planned for such out-of-control growth.
In addition, those in Florida are moving around as South Floridians are heading north, seeking out better schools, lowered crime rates and in general, a higher quality of life. They are even looking at the purchase of oceanfront homes and property on the Treasure Coast; something that hasn’t happened in many years.
But what is the advice on the street for those looking into purchasing homes in Florida? Those who didn’t buy during the 2003-7 housing bubble might want to look now. Don’t look into gated communities or single-family homes; rather stay on the coasts. And, perhaps most importantly, remember that when you look into news in Florida housing, it’s not all bad.
The economic situation in both Florida and Michigan is pretty similar…and not in a good way. Along with high unemployment and mass foreclosures, this doesn’t bode well for politicians. Rightly or wrongly, people in economic trouble turn to them to blame them for finance-based problems. So when it came to the presidential primaries, of course it was going to have an impact. Ultimately though, Mitt Romney scored nearly half of the votes, coming in with 46 percent, the next closest contender to him being Rick Santorum who only got 13 percent. He said, “we still believe in the America that is the land of opportunity and a beacon of freedom.” Well, we’ll just have to wait and see how he relates this to the housing issue for the state.
Both Michigan and Florida have been trying to deal with their economic plights but to what degree has this been successful? Not especially. Foreclosures are so common because so many people lack a safety net. So if a spouse gets sick or dies, the main breadwinner loses their work, or there is some other crisis, foreclosure is the next step. And what’s worse for those in Florida is that since there was such an incredible housing boom, when the crash came, it was even more devastating. Statistics show that of the 4.5 million borrowers who still have mortgage loans to repay, over 2 million of these now owe more than what their houses are valued at. Nationwide the figure is around 28 percent, but in Florida it is closer to 48 percent. Good people who have worked hard their whole lives, are now being forced to rejoin the workforce having taken retirement at 65.
So what impact has the political situation had on this? Well, it seems like President Obama tried a couple of years ago. But the Home Affordable Refinance Program he established was too little too late. It was meant to assist those homeowners with little or no equity refinance. Florida is now seeing the establishment of support groups for the foreclosed, with one meeting being held in downtown West Palm Beach.
Americans are really struggling to pay their mortgages. Currently, approximately 11million people are “underwater” in their homes and it seems Florida is one of the states being impacted heaviest with a staggering 45 percent of their homes in this category. And one of the biggest gripes people in trouble are having is that the banks and financial firms that were somewhat responsible for this situation are not being penalized.
But things might finally be changing. A recent poll was undertaken for attorneys general throughout the nation to determine if they are willing to fight the terrible practices undertaken vis-à-vis foreclosure practices in the late 2000s.
The settlement would force banks to provide assistance in the form of billions of dollars to those who have had their homes foreclosed or who are at risk. Government officials have not been particularly active in forcing the large banks to change their ways and help these people. Should the deal be activated, up to $17b would be set aside in order to pay for various relief for around a million borrowers who are not up to date on their payments but owe more than the current value of their properties. As well it would give around 750,000 individuals who lost homes in the foreclosure checks worth $2,000.
While we have already seen that it looks like 2012 is going to be a good year for the Florida housing market, figures coming in from last year are indicating that 2011 showed the state was recovering from its housing recession too. Indeed, looking at the figures it seems that compared to 2010, there was an 8 percent increase in Florida housing sales in 2011.
In addition, according to figures released from Florida Realtors, over the last few years, there has been a steady escalation in housing sales in Florida, since this latest increase marks the third time in three years that there has been growth.
However, looking at December 2011, it seems that there was a small plummet (of 2 percent) from figures for the year earlier. Again though, it was emphasized that recovery in Florida’s housing market will continue throughout this year.