Sunshine State real estate markets and how Florida foreclosures affect them would make for a good case study in most business school economics classes, for sure. The main lesson that would probably be drawn is that all economies go through booms and busts, no matter how long it takes to move from a boom to a bust. Florida, being the state it is, managed to duck that bust for a while though the natural cycle appears to have asserted itself again.
The issue with this current "bust" (with a drop in residential real estate prices of at least forty percent in some areas of the state) is that it's so deep and widespread. It's also a fact that much of the rise in property values in Florida over the last decade had no rational underpinnings, meaning that homes were increasing drastically in value, even in Florida, based on nothing much at all other than a demand that had to tail off, inevitably.
The onset of an actual and sharp recession was the match that lit the kindling that became a widespread drop in home values. With buyers out there beginning to restrict their activities in order to ride out the recession, fewer people found other people willing to buy these overpriced homes. Soon enough, values declined and they were stuck with properties that were worth less than they owed.
In hindsight and in looking at these properties, it becomes clear that many got into the market based on speculation that values would continue to go upwards. They bought homes on adjustable-rate mortgages or with very little equity and did not expect that the steep decline in home values would occur, leaving them with homes they couldn't sell and without a way to make a profit from them even if they could.
For another, they were soon to face the fact that their original note -- while initially nice and low in terms of repayment terms -- was going to increase, sometimes drastically, and give to them a new payment they couldn't come close to being able to afford. It's no wonder, then, that foreclosure began to become an attractive option to many folks holding these properties.
At one time, going into foreclosure was probably the last thing any home owner would consider doing, but attitudes toward even this financial issue have begun to change among many homeowners. This might be because people now live in a more disposable culture in terms of outlook, and their homes have now become no different than anything else they dispose of eventually.
Whether or not this sort of disposable attitude when it comes to homes will last remains to be seen. It's also uncertain what affect on Florida foreclosures this attitude will continue to exert over the long run. Many in Florida hope that because it's a nice place to live with equally-nice homes, the markets will soon begin to rebound. For sure, if any state can do it, it'll be Florida first and foremost, which is something to hang onto, one would say. - 31862
The issue with this current "bust" (with a drop in residential real estate prices of at least forty percent in some areas of the state) is that it's so deep and widespread. It's also a fact that much of the rise in property values in Florida over the last decade had no rational underpinnings, meaning that homes were increasing drastically in value, even in Florida, based on nothing much at all other than a demand that had to tail off, inevitably.
The onset of an actual and sharp recession was the match that lit the kindling that became a widespread drop in home values. With buyers out there beginning to restrict their activities in order to ride out the recession, fewer people found other people willing to buy these overpriced homes. Soon enough, values declined and they were stuck with properties that were worth less than they owed.
In hindsight and in looking at these properties, it becomes clear that many got into the market based on speculation that values would continue to go upwards. They bought homes on adjustable-rate mortgages or with very little equity and did not expect that the steep decline in home values would occur, leaving them with homes they couldn't sell and without a way to make a profit from them even if they could.
For another, they were soon to face the fact that their original note -- while initially nice and low in terms of repayment terms -- was going to increase, sometimes drastically, and give to them a new payment they couldn't come close to being able to afford. It's no wonder, then, that foreclosure began to become an attractive option to many folks holding these properties.
At one time, going into foreclosure was probably the last thing any home owner would consider doing, but attitudes toward even this financial issue have begun to change among many homeowners. This might be because people now live in a more disposable culture in terms of outlook, and their homes have now become no different than anything else they dispose of eventually.
Whether or not this sort of disposable attitude when it comes to homes will last remains to be seen. It's also uncertain what affect on Florida foreclosures this attitude will continue to exert over the long run. Many in Florida hope that because it's a nice place to live with equally-nice homes, the markets will soon begin to rebound. For sure, if any state can do it, it'll be Florida first and foremost, which is something to hang onto, one would say. - 31862
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