Florida Economists Say Housing Slowdown is Over

Two leading Florida economists say the worst of the housing slowdown is over, but one of the forecasters says it will take another 18 months for the sales volume to reach more normal levels in Florida.

Challenges still face the Florida economy, including higher property taxes and increased homeowners’ insurance costs. University of Central Florida economics professor Sean Snaith says rising unemployment caused by the building slowdown and the uncertainty over gas prices will also play a part in the state’s recovery.

Snaith says housing starts will decline in the third quarter of the year and then begin a slow improvement through 2009.

Economist Hank Fishkind says the turnaround is important to the entire economy since Florida is now one of the nation’s three most populous states. "Sales of existing homes are the best leading indicator for national housing markets," said Fishkind, who notes April sales were off sharply, falling below 6 million at an annual rate nationally.

"At these levels it will take 8.4 months to sell all the homes that are for sale. However, prices remain stable. And the sales levels, while down this month, were up sharply earlier in the year. What all of this means is that we have seen the worst for housing markets," Fishkind said. "It will take another 18 months or so before closing volumes reach more normal levels, but the worst is behind us," said Fishkind.

In Destin and South Walton sales of homes and condos were up for the month of May, 2007, representing the third straight month that the sales volume showed an improvement, which is accepted by economists as the turning point in any real estate market.

Some 165 homes, condos and townhouses closed escrow during the month of May. Many showed significant reductions in prices from the market’s peak, which is recognized as June of 2005. Sales prices on properties that are selling are still listed above what buyers are willing to pay for properties. Properties that are closing escrow have dropped about 30% from their peak.