Investor confidence in the outlook for business and availability of money are reasons for cautious optimism, states the UF Bergstrom Center for Real Estate Studies. Although the state appears on the road to recovery, that road seems as long as stretch of interstate through Alligator Alley or the Panhandle.
"Even though most markets report they've seen the bottom, it's going to be a long climb," says Timothy Becker, director of the Bergstrom Center, which conducts quarterly surveys. "As long as we continue to lose jobs, the real estate market will be depressed."
Florida's retail and office sectors are suffering the most because of the large number of residents out of work statewide, measuring nearly a million earlier this summer. With consumers spending less money, national retailers will continue to pull back with fewer store openings and possibly more closings, Becker says.
However, more of the approximately 300 respondents to the latest survey expressed confidence that the availability of capital for real estate investment is stronger than this past spring, and Becker says that optimism is spreading to other property types. "As more capital becomes available, more transactions happen in the marketplace and that's how most of our respondents get their income," he says.
Becker notes that real estate investors have had to change their line of business in order to make money in the uncertain economic climate. For example, companies that were strictly in development are now getting into property management, while shopping center or office building investors are now focusing on buying distressed assets, he says.
Meanwhile, Florida's housing market continues to be the most depressed in the US, particularly in the southwest part of the state where a huge number of foreclosures has combined with the lack of a diverse economic base, Becker says. Even though sales of single-family homes has gone gngbusters recently, they are still selling at extremely low prices.
Expectations for apartment occupancy have jumped because of discounted rents and people moving out of houses, according to Becker. "We're starting to see some of these people rent apartments," he says.
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