The housing market has been hit with a barrage of negative media attention leaving many wondering exactly when the market is going to get better. Those in real estate know that of course it will get better. According to Wayne Archer, Director of the Bergstrom Center for Real Estate Studies, the underlying real estate markets are in fact improving.
The latest study by the University Florida shows that the new housing market is actually stablizing. That is a great sign. It is better to stabilize than to keep moving in the wrong direction. The positive outlook is due to the continual demand for homes and home builders not overbuilding. The Florida market is different from most states in the nation. The growth rate in Florida is continually growing. More and more people are retiring or streamlining their business to live in Florida. That growth rate has helped to stabilize the market.
The study was released after the mortgage crisis entered into the picture. However, Archer believes that the mortgage crisis will not be a major impact to the housing market. Most defaults are from consumers with subprime loans and many are second homes or investment properties. Many consumers will do everything possible to prevent foreclosing on their homes.
In some markets, such as Miami, the market is flooded with condominiums for sale and not enough interested buyers. Unless there is some movement from the International markets, you can expect condominiums in Miami to continue to suffer. Archer does believes the owner-occupied single family homes are still good investments. Prices in some markets may drop over the next year to adjust to a correction in the market, however, he does not foresee widespread declines. “I think homeowners have not yet come to terms with the fact that the price increases we’ve seen in the last two or three years are not going to continue,” he said.