Foreclosures Push Down House Prices to Record Low Levels in Florida

August 18th, 2008 | Tags: Foreclosures

Foreclosures have pushed down house prices to record low levels in Florida having dropped by over $150 billion in one year. It is apprehended that the decline will continue to decline throughout 2009 according to officials of the state. Residential and commercial house values have plummeted by 6%. It is feared that it will go down by another 5% during the forthcoming year. CBS4 News – a partner of Miami Herald, in their news coverage, reported this. The yearly decline is double that of what economic pundits had predicted last year. The situation would have been worse without more than $50 billion new constructions. But the new building constructions are expected to fall by 35% in 2009. In 2009 the value of state property is anticipated to fall by another 4.92%. The economists are optimistic that after the slump the health of the real estate will slowly begin to recover. The foreclosure crisis will be followed by the convalescence period.

Florida Foreclosures The chief economist of the state is Amy Baker. She told the news media that the state is witnessing innumerable ‘fire sales’. The houses are being sold at absurdly low prices. But she feels that something is better than nothing at all. Looked at it from that way it may be said that things are moving. Foreclosures had lead to near full stop conditions.

Foreclosures are raging across the nation but it is concentrated in certain states like Florida, California, Nevada and Arizona. In the second quarter RealtyTrac placed California and Florida among 16 of the 20 metro areas reeling under foreclosures. RealtyTrac keeps track of the default and auction notices and bank repossessions.

The foreclosure crisis and its fall out have put local governments as well as schools in a tight spot. The fall of taxable value of property by 0.3% will tell on the revenue collection. New building construction activity will drop by 35% slashing $36.4 billion from the tax kitty of 2009. The schools will get 1.5% less – this calculates to a total loss of $140 million. Without intervention by the state legislature this impasse will become a reality. One suggestion is the slashing of property taxes on schools and replacing it from other sources. How much it will save the situation to stabilize is a matter of debate. Some say that although it will boost construction activity, people will have to pay more for tax levied on materials and services.