Miami, FL (PRWEB) April 23, 2007
While Florida's foreclosure rate rose only 2% from 2005 to 2006, the volume of homes entering some stage of foreclosure was still the highest in the nation, topping out at 19,140. Over the past few years Florida has been home to one of the most unique real estate markets in the country as rapid development, rising home values and foreclosures have all come together to create a scenario of inflated home values and falling demand that points to a large imbalance in the market.
Ever since the early part of the decade, when the real estate market nationally showed signs of a boom, investors have been buying up homes and land in Florida. Predicting a surge in demand for housing, especially in the southern region of the state, due to a growing economy, Florida began to be developed at an incredible rate, and surely enough, growth followed right behind. This led to soaring property values, as well as a huge increase in the amount of new mortgage being taken out.
Many of these new mortgages were sub-prime loans, meaning they were doled out for extremely low down payments to borrowers with bad credit, who in other scenarios would not have been able to afford a home. However, most of these loans carried Adjustable Rates, so while the loan stayed at a low introductory rate for the first year of their life, after that period was up they began to rise drastically with the national average. This has lead to an epidemic of defaulted borrowers unable to keep up with their loan payments, and many blame ARMs for being the leading cause of foreclosure in Florida.
However, now that job creation seems to be slowing in Florida, and the foreclosure scenario is leading many to reassess the state of Florida's real estate market, many things are becoming clear. While record development has occurred in the past few years, there is now a huge inventory of homes on the market due to the slowing pace of sales and the scare brought on by the foreclosure epidemic.
As a result, many are predicting Florida's sky high home values to come down significantly, though it's going to take time. Inflated home values are also seen as a huge cause of the foreclosure scene in Florida, since the higher the home value, the bigger the loan needed to buy them. Investors are becoming victims of their own role in driving up prices as well, since many are finding that they are stuck with extremely expensive homes that they are unable to sell for the values they predicted. This reflects the national trend as well, where the median home value from 2005 to 2006 stayed at $222,000 with no gain whatsoever. In Florida, which already bucks national trends in the foreclosure market by having more than double the national rate of foreclosure, the median home price is practically guaranteed to see a significant drop. Some experts are predicting that over the next two years, home prices in Florida could drop by anywhere between 5 and 15%, depending on the region.
So for investors who avoided the rush to buy up home in Florida 5 or 6 years ago, now might be the time. Falling home values and a foreclosure inventory that is predicted to rise even further will give you plenty to choose from, and buying a foreclosure is likely to provide an even bigger discount.
It seems Florida's long unstable market is finally beginning to feel the effects of rampant development and over-investment.
Foreclosure Listings NationWide.com provides detailed information and statistics on real estate and foreclosure trends nationwide, as well as comprehensive listings for foreclosure properties in every state. Our team is made up of seasoned real estate professionals here to help you understand current trends in the market and how to take advantage of them, as well as to help you find listings for great deals on foreclosure homes. For more information on the subject of this article or to learn more about our service, visit http://www.foreclosurelistingsnationwide.com.