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Fishkind: Florida’s housing market now in slow recovery

ORLANDO, Fla. – Aug. 30, 2007 – Popular perceptions about the housing market are wrong, says noted economist Hank Fishkind, who believes the market reached bottom a few months ago. Fishkind looks for trends in real estate statistical releases, and says that things may not be great but there’s also no indication that they’re getting worse.

In his weekly radio address on WMFE in Orlando, Fishkind said he constantly encounters audiences worried about the housing market and any financial disruptions it could cause.

“The variance between the real economic data and people’s perceptions was enormous,” Fishkind said. “While home starts have dropped 36 percent from their peak, starts have stabilized over the last six months with no further erosion. Friday’s report on new home sales confirms that the market has bottomed out. Sales actually increased 2.7 percent to an annual pace … and the inventory of new but unsold homes declined.”

Fishkind agrees that sales of existing homes are down, but also looks at the amount of the drop and recent changes. “Importantly, the sales of existing homes were again stable for the seventh month in a row,” he says. “While recovery may be some time off, it is clear that Florida’s housing markets have bottomed out.”

Fishkind does not believe Florida home prices will decline any further over the next 18 to 36 months, but he does expect them to remain generally flat, depending on where they’re located in the state.

“The more overbuilt markets will take longer to recover,” Fishkind says. “But fears that prices will drop significantly are unfounded. And so is the pervasive panic. The economy is stronger than the reports about it.”

© 2007 FLORIDA ASSOCIATION OF REALTORS®