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Florida’s Rollercoaster Not For The Faint Hearted Investor
April 6, 2010Article by Ray Withers
Looks like buyers of Florida property will need to wait a while longer on the market returning to positive growth. On the flip-side anyone who has so far been unlucky in securing a property, or anyone who has bought but is thirsty for more will still be able to bag bargains in the foreseeable future.
According to several major indices and analytical bodies, the American housing market has tipped back into negative growth, and Florida’s metros has been one of the main areas mentioned by the negative effects.
The main study of the day has been carried out by University Financial Associates of Ann Arbor, which has predicted that the median house price across American metros will come down to the 1990 average of $101,000. The report said:
“It is often stated that prices decline faster than they rise because fear is a stronger emotion than greed. This certainly proved to be the case in Detroit where 10 years of real price gains were erased in just 4 years.”
“Detroit metro was the canary in the coal mine this cycle, with falling house prices arriving earlier than in other metros,” said Dennis Capozza, who is the Dykema Professor of Business Administration in the Ross School of Business at the University of Michigan, and a founding principal of UFA. “Other metros that have already or will soon converge to pre-bubble real prices include Las Vegas, Phoenix, the inland California metros and many south Florida metros.”
The statements confirmed those made by other analysts and indices:
The Federal Housing Finance Agency’s seasonally adjusted monthly index was down 1.6% in December on November, cancelling out increases recorded in previous months. The monthly change from October to November was revised downward from the initial increase estimated at 0.7%, to an increase of 0.4%. The National Association of Realtors also recorded a year on year fall in February.
According to Ray Withers, director of international property investment consultancy, the falls are more of a benefit than a hindrance from an overseas buyer’s perspective, he said:
“While these declines, which look like turning into a second dip, are not good for confidence, and may well have the faint-hearted a little bit worried. Not many faint-hearted people have invested in Florida property. The people who have invested in distressed and repossessed property in Florida have, for the most part, done so knowing of the potential for a rocky ride, but also knowing of the potential for substantial growth over the long-term, these people will be unconcerned by the recent tumultuous reports and predictions.”