Florida Housing Market Recovering But Still Not 'Healthy'
However, RealtyTrac's July 2014 U.S. Foreclosure Market Report released today found that Florida had the highest state foreclosure rate in the nation for the 10th consecutive month despite a 30 percent year-over-year decrease.
"Many of the markets are defined by extremes – either the accelerator is to the floor or they're slamming on the brakes," RealtyTrac vice president Daren Blomquist said. "Right now the accelerator is on the floor in Florida, but there is a drag on the market as far as foreclosures. The market is showing signs of recovery, but I wouldn't say it's healthy yet."
Florida Realtors reported a 5.3 percent year-over-year increase in the median price of single-family existing homes for Q2 2014 and a 10.1 percent increase in the median price of townhouses-condos from the same quarter a year ago.
“Florida’s housing market continued its steady course during the second quarter of 2014,” Florida Realtors president Sherri Meadows said. “As of June, the state’s unemployment rate is 6.2 percent. More jobs are being created, which is good news for Florida’s economy and a strong housing market."
Sales of single-family existing homes for Q2 2014 totaled 67,579, up 7.3 percent from Q2 2013, according to Florida Realtors. But sales of townhouse-condo properties experienced a 3.4 percent year-over-year decrease.
“The second quarter numbers show that Florida’s real estate market is settling in,” Florida Realtors chief economist Dr. John Tuccillo said. “While prices throughout the state tend to be up, sales are mixed with single family sales growing, and condos and townhouses declining. There are a lot of reasons for this, but the major factors are the reduced role of bulk investors, along with the difficulties faced by households with essentially flat incomes and thus limited access to mortgage credit. This market is sustainable, but either or both of these roadblocks must be removed if it’s to take off again."
The high foreclosure rate in Florida is a problem left over from the housing bust that occurred following a flurry of buying activity on the part of investors between 2004 and 2008, according to Blomquist. About 74 percent of loans currently in foreclosure in Florida originated during that four-year period, Blomquist said.
According to RealtyTrac's report, eight of the 10 highest metro area foreclosure rates in July were located in Florida, led by Ocala with one foreclosure for every 296 housing units on the average. The statewide foreclosure average for Florida was one in every 469 properties for July.
RealtyTrac reported that one in every 469 Florida homes was in foreclosure as of July 2014, appreciably higher than the national average, but still down 30 percent from a year ago, a "dramatic decrease," according to Blomquist.
"In Florida, even though the foreclosure rate is highest in the country, the numbers are still coming down," Blomquist said.
The rising prices and increased sales of single-family homes are signs that Florida housing market is headed in the right direction despite the foreclosures, Blomquist said.
"In terms of prices and consumer confidence, the market has bottomed out and is coming back up," Blomquist said. "The prospect looking forward is good and there is a light at the end of the tunnel."