The Nature Of Florida Foreclosures And Their Affect On The Economy

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.

There's a problem with this current bust, though, because the drop in real estate values (sometimes as steep as 50% or more in certain parts of the state) has been particularly notable and very far flung. This might be because a great deal of Florida real estate didn't seem to be valued rationally, probably because demand was so unrealistically high for quite some time, though it's now dropped off greatly.

And as soon as a real recession began, that's precisely what began to occur. People began to hunker down to ride out the recession, buying fewer homes and other goods and leaving many people, who'd speculated that the homes they'd bought over the last several years would be worth more than they'd paid out in the cold.

Looking at their now-devalued properties, these same people -- who'd often purchased their homes on adjustable rate or no-interest loans that had been scheduled to adjust upwards in monthly payment from one to three years after purchase -- now found themselves in a real fix. They were sitting in a home worth much less than they'd paid with no way to sell it and recoup their initial investment, for one.

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.

In days past, these sorts of foreclosures were often looked at as a last resort by people and taken only in the most extreme of circumstances. However, a general shift in attitude among many people holding property these days has led to a phenomenon where many aren't even stopping to consider other alternatives aimed at keeping the home. In a disposable culture, homes are now increasingly being looked at in that same manner.

Whether this attitude is good or bad remains to be seen, and how much of an effect it will continue to have on FL foreclosures and whether they increase or not in number is also uncertain. There is some hope in Florida that it's will still one of the best places to be when it comes to finding a good home in a nice climate. If any state can rebound, most experts say it'll be Florida, which is something nice to consider, at least.

by: Jack Bennington

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