Due to its excellent climate and favorable job opportunities, Florida typically attracts many new, permanent residents on a daily basis who bring Florida growth and additional income. As a result, many people believed that Florida was immune from the economic downturn afflicting the rest of the country. Due to higher energy and food costs and the bursting of the speculative real estate investment bubble across the country, however, Florida has been impacted.
Most owners have seen a decline in their real property values. The question is--have we hit bottom and will real property values return to their pre-downturn values? Certain financial experts believe that, in Florida, that the “bottom is at hand”. Hank Fishkind, Ph.D., has advised the Palm Beach County Attorneys’ Real Estate Council that despite the collapse of the sub prime mortgage market, Florida’s housing market in late 2007 remained unchanged, thus indicating resilience. Dr. Fishkind says this is a good indication that the bottom has already been reached and the upward slope of recovery should begin. Recovery in Florida will depend upon continued population growth, job creation, volume of inventory and any changes in the national economy.
Florida remains a national leader in tourism, health care, high technology and manufacturing. As long as Florida continues to lead in these industries and the population continues to grow, Florida’s current downturn should be reversed. The need for commercial real estate in Florida to accommodate Florida’s booming industries should also continue to grow. The Federal Reserve’s recent cutback of interest rates should also spur on the recovery. The commercial real estate market in Florida, as a result, should not suffer. The hope is that we will look back on this period as a short adjustment period. An optimistic outlook is possible, and the economic pendulum should swing back, just as it has done before.