A John Burns Real Estate Consulting Local Building Market Intelligence report has found that Florida's construction market has virtually shut down.
"We have been valuing properties throughout the state all year and, while we are seeing some modest improvement in sales velocity, there is virtually no new construction," according to the report. "Year-to-date through May, the state has recorded just 9,741 single-family permits – a 49% decline from the year-ago period. We project 16,900 single-family permits in 2009, which will be a decline of 91% from the peak in 2005," the report says.
The rolling 12-month total of permits continues to decline. When the line starts to flatten, construction will have bottomed out.
"While the story is grim for Florida real estate owners, the story is fantastic for potential home buyers," the report points out. "The payment on many brand-new homes is now less than $1,000 per month, the FHA is still offering low down payment programs, and the government is offering an $8,000 tax credit to home buyers. Consumers may never see payments this affordable again, and the word is getting out among renters. A surging group of renters moving into homeownership is exactly what is needed to stabilize Florida's housing market, and eventually kick-start construction again," the report says.
For additional information, please visit the John Burns Real Estate Consulting website.