Economist Publishes Report Saying 2012 May Be The Year That The U.S.'s Real Estate Mess Turns The Corner

Charles Hanes
January 19, 2012

A recent CoreLogic report tells us that America's housing statistics and the duration of the downturn to date indicates that 2012 may be the year that the housing market begins to turn the corner.  Now, turn the corner can mean different things to different people, but I've been impressed lately to see, first hand, how many properties in south Florida are selling.

The CoreLogic chief economist, Mark Fleming points out that "households are paying off their debts and at the same time accessing credit more easily, with some households even adding Home Equity Lines of Credit in the third quarter of last year, the first such movement for these second-lien mortgage products since the financial crisis began".

In fact, the New York Federal Reserve Bank, recently published a survey showing that total household debt continues to decline.  All indications are that consumer confidence in the strength of the ecomony is growing.

However, in south Florida unemployment is still hovering around 9% (18% when underemployed and part time employment is factored in).  Florida is one of the most extreme states for Foreclosures and there is still a huge inventory of foreclosures coming on stream.

I've been spending a great deal of time in the market in south Florida and I would tell Canadian and American snowbirds to tread very carefully if they think that they are going to pick up Florida properties for pennies on the dollar.

And the quality of property that is on the market is not impressive at all.  We have been viewing detached homes in Boca Raton priced in the $300,000 price point and I've been disappointed with the standard of quality that we've found.

I have Canadians contacting me telling me they've read in the media that they can buy $300,000 houses for $75,000 and I can tell you that this is simply not the case.  I too have heard these stories but after months of leg work I can tell you they are just not there.  We visited a $179,000 Listing in Pompano the other day and were nervous getting out of the car!

There are some good investments out there and yes there may be some true media reports but they are not in southeast Florida where the market is mature and heavily populated.  Vulture funds have snapped up the massive inventories of condos and are selling them but not at give away prices.

There are some opportunities but you've got to expect to be paying $250 - $300 per square foot.  Many of these are rented already and showing impressive returns.  We've sold out of Village East, a property that we promoted last fall.

As usual, I see the best investment opportunities in condos for security, maintenance and ROI potential.  If you've been looking to invest in Florida Register with me and I'll point you in the right direction and make sure that your best interests are preserved.

I'm Charles Hanes