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Are We There Yet?
February 8th, 2012 10:43 AM

"Are we there yet?"   This seems to be an ongoing question for years now, as Polk County's housing market continues to struggle to find a bottom and begin its recovery.  This new year is also uncertain as Polk is coming off another difficult year for both homebuilders and homeowners.

Home sales have held steady since 2009, but prices continue to decline and local construction is still in very low production. Foreclosure filings have also declined, but no one knows how long this will last or how many are still waiting to be released into the market.

The biggest frustration for everyone is that nothing seems to be changing. The real estate market as a whole seems to be stubbornly resistant to recovery.  Sales are indeed increasing, but prices continue to fall.  The existing homes that sold in Polk County last year were the highest total since 2006, driven in part by bargain-hunting investors; yet the median price slipped another 8%.   The last time prices were this low was in 2002.   Foreclosures have been fueled by high unemployment, with scant job growth in Polk County. 

The slow economy is taking a huge toll on new home construction and homebuilders as well.  In Polk, the number of single-family building permits last year was the lowest figure since 1994.   Many construction businesses have disappeared, as there is not enough work for people to make a living.  The main obstacles to a building recovery are the lack of accessible financing for buyers and the challenge of trying to sell new homes in a market saturated with cheaper, distressed properties.  It could be a few more years before normal new home construction gets under way.

On a positive note, though, Florida is well-positioned for a housing recovery, and is a desirable place to live. The climate is a huge draw for many people from  various states and countries. There is no state income tax, homes are extremely affordable, and the homestead exemption reduces real estate taxes.  There are positive projections for Florida and experts predict that employment and population will see slow but steady gains during the next three years. 

"Are we there yet?"   No, but we are getting closer.    

 


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Posted by Barbara Doeringer on February 8th, 2012 10:43 AMPost a Comment

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