Destin Housing Market Shows Resilience

Despite the national real estate market slow down, Florida’s new home market appears to be stabilizing, according to a University of Florida report. The findings are part of a quarterly survey of Florida real estate trends.

"There’s a growing feeling of apprehension or caution, but the results from our survey remind us that the underlying markets for real estate in Florida are still in good shape," says Wayne Archer, director of Real Estate Studies.

The state is in better condition than most of the rest of the country because Florida’s growth rate is higher than most other states, Archer says. New single family home development is sluggish in most of the nation as builders cancel new projects and put others on hold to wait out the slow down.

The subprime loan crisis is having an impact on many parts of the Florida real estate market, but has not had an affect and is not expected to have an affect on the Destin and South Walton real estate markets. Nearly 60% of all homes and condos in the area are free and clear of mortgages. Additionally, the market is composed of mainly second home and vacation home owners, who tend to be higher net worth individuals and have higher credit scores to obtain mortgages. As a result subprime mortgages have not been a saleable commodity in the marketplace.

The subprime loan crisis has resulted in nearly a 2,000 point drop in the Down Jones Industrial stock market average and has sent jitters through financial markets. Although subprime mortgages provide just 13% of all home financing nationwide, investors are leery about many real estate market places and the higher nationwide foreclosure rates.

Foreclosures remain very low in the Destin market. Only a handful of homes and condos are under foreclosure in the market, according to a survey of county records, which is typical for any time. As a result there is no fall out from the subprime crisis in the market. Sales have been slow for the past two years, but have begun to pick up over the past quarter.

Prices have dropped as much as 40 to 50% from their peaks in some sectors of the Destin market, which has acted to re-ignite buyer activity in the marketplace. "We have a liquidity crisis that is at the top of the news hour by hour and it’s very hard to conjecture how much impact this will have on the real estate picture in Florida,"said Archer.

The University of Florida researcher says he does not expect further widespread declines in the marketplace.