The debate as to whether or not South Florida's struggling housing market is back on track or not is still up in the air as far as I am concerned. If you asked one hundred agents here you would get a different answer from them all, but most would hinge on either a big time yes or a slowly but surely approach. If you asked the media every answer would be coming up smelling like potpourri, with charts, graphs, and all kinds of ridiculous statistics to back it up. But an economist, now there is a realist if ever there was one. They know the deal and are not afraid to lay it out there. So, can all of them be right? Of course not. I try to take a little from all of them and then add to my local market research.
The problem with getting an accurate account of the recovery is simply tied into the shadow inventories, or the foreclosed homes that the banks are holding back on so as to not flood the market. By doing so, the real estate market is left with a smaller inventory of homes, which generates multiple offers and higher demand. Personally, as more of a listing agent than a buyer's agent, I like the idea. However, I do not like the false hope that it provides my customers, who then become lulled into the false pretense that their home is worth more than the market value I advise them of. Let's face it, getting a loan today is like pulling teeth, so continuing to lower interest rates can only go so far. So that pretty much leaves sellers with a whole lot of investment buyers, most of whom are foreigners. On the other hand, if the market were to be saturated with thousands of foreclosed homes that would be a disaster as well. Buyers would indeed come out of the woodwork like roaches, but their offers would be lower than usual, thus leaving the traditional sellers on the outside looking in because they are not the better deal. This would probably also kill short sales since they close so much faster.
I remember in 2006 and prior to when all the media could talk about was when the bubble was going to burst on the housing market. Nobody paid attention to the warnings. It was as if they wanted it to happen so that they would have something to talk about. But now all they can talk about is the so called recovery. What will the media talk about when that happens? Make no bones about it - this is indeed an investor driven real estate market and without investors as buyers the South Florida market would look like Detroit. It will lead to another bubble, however, that of the rental market because the area is being flooded with rentals now and landlords are gouging like tomorrow will be the end of the world. It is sad at how people take advantage of others in their most time of need. John Steinbeck's, "The Grapes of Wrath" is a classic example of how the market collapsed during the depression and how those with took advantage of those without.
So, as far as I am concerned the real estate recovery has to be divided into different parts of the country. Some are better off than others, including those states in tornado alley like the Dakotas, Oklahoma, etc. But, like Nevada, Florida has a long way to go because it was probably the most greedy during the heyday. The deeper you go into a real estate tragedy in terms of pricing and inventory, the longer you have to climb out. Only time will tell how Floridians will bounce back from the deepest depths of the real estate abyss. No media giant can ascertain that. I think the state overall is still on the mend, but starting to stablize. Once the banks start relaxing some of their lending restrictions and do away with some of the shadow inventory then we can probably get a better gauge on where we are as a state.