Encouraging outlook for Bay Area real estate
Is Florida’s depressed real estate market on the verge of a turnaround?
ST. PETERSBURG – The National Association of Realtors senior economist has encouraging outlooks for the Tampa Bay market.
“Certainly I feel very comfortable saying 2008 will be better than 2007 in terms of sales and prices,” said Dr. Lawrence Yun.
Yun calls Florida “ground zero” in the current national real estate correction.
“I don’t even use the word ‘price correction’ because there is minimal price decline,” he adds.
The economist thinks there is a lot of pent-up demand in the local market from buyers waiting for more significant price drops. But rising rents are prompting some of them to start shopping. Sellers are also lowering their expectations. Florida also continues to capture 26% of foreigners buying homes in U.S. and will continue to attract northern retirees.
“Long term, baby boomers, huge population on the verge of retirement and we know where they want to go,” Yun said.
New home construction starts in Florida are down 70% from the peak in 2005.
“[It’s] actually a positive for the local market stabilization, because you don’t want to add inventory to the current situation.”
But property taxes and insurance continue to be a drag on the local real estate market. 79% of home buyers say they have postponed or cancelled deals because of insurance costs and availability. 62% of home sellers say the same issues motivated their decision to sell.
Yun thinks the local real estate market is poised for recovery despite taxes and insurance problems, and says resolving those issues will strengthen the rebound.