The national economic downturn has impacted many states’ economies, including Florida’s. Since the beginning of the recession, Florida has been known as one of the hardest hit states, with unemployment rates reaching 11.4% in January 2010 according to the U.S. Bureau of Labor and Statistics. As well as having 516,711 foreclosures at the height of the housing market crisis according to a RealtyTrac report.
The real estate industry is often a reflection of the status of the economy. Florida has seen a large decline of new residents, with nearly one third fewer new residents in 2011 compared to 2009. The tourist industry, which accounts for approximately $57 billion of Florida’s total economy, was greatly affected by the national economy as well. This has resulted in layoffs and higher unemployment rates, which affects the entire state’s economy.
So far in 2013, however, Florida’s economic state has been slowly improving. Increased tourism rates all across the state have begun to lower the unemployment rate. With this, companies that once saw Florida as a poor investment are now relocating there and creating even more jobs. Companies that already had a hand in the state are also expanding and hiring new employees.
The housing market is finally starting to recover. Although it will be many years before it is back to where it was, this is still a reason to be guardedly hopeful. With the housing market finally recovering, this improves the state’s economic and employment outlook. The market in the Naples, Bonita Springs and Estero real estate markets are particularly active early on in 2013 far ahead of 2012.
Recently, economists have been noticing a new market environment, which is geared towards being more balanced. This is partly because of a decrease in foreclosures, new listings and short sales, as well as an increase in closed and pending sales. This would indicate that there are more buyers than sellers, in the housing market. With a higher demand than supply, the outcome can only be beneficial to the state’s housing market and economy.
With more jobs and lower interest rates, many prospective home buyers are finding superior homes at more affordable prices. Many who have been watching from the sidelines are ready to take this opportunity to buy at low prices, before the improving economy causes prices to rise again. With the economy moving in a positive direction, homeowners feel that they can now afford a higher standard of living. Inventory levels in the Naples real estate markets are substantially down from for early 2012 levels which should start to be reflected in both asking and selling prices.
There is really only one main problem currently challenging the Florida housing market. This is that the number of current listings is not high enough to meet demand. However, there are some signs of improvement in this area. With many home sellers seeing multiple offers, those who have been hesitant to enter the market are now gaining the necessary confidence to list their properties. With mortgage interest rates for thirty year mortgages falling to 3.6% last August, down from 4.27% last year, they will also be more likely to purchase a new home within the state.
With Florida’s housing market steadily recovering, the state’s overall economy is showing encouraging progress. The chaos of the recent recession appears to have subsided, for both the state and the nation as a whole, at least for the near future. If this trend continues, there is hope for a full recovery in the future.
Whereas much as been publicized about the condition of the real estate market in SW Florida, these areas which have been so heavily affected are north of the Naples real estate market. The Naples real estate market and Bonita real estate market are both currently seeing significant increases in the building of new Naples homes and Bonita homes. Whereas there is substantial activity in the new construction area, inventory of existing homes on the market is noticeably down from prior periods.