Under Water Mortgages Threaten Recovery

Florida is a buyer’s market. Home prices are down and there’s a tax credit for first and second time buyers. Sales are up a staggering 45 percent over a year ago.

“We are definitely on the road to recovery with 14 months of increased home sales in Florida, much better than the national average,” said John Sebree with the Florida Association of Realtors.

But the increase in home sales comes at a price, and that price is falling property values.

About half of Floridians own a home that is worth less than their mortgage.

Folks who bought a house in Florida a year ago paid on average 30-thousand dollars more than people buying now.

Prices fell 17 percent over last year, raising concerns for homeowners. Alex Sanchez, the president of the Florida Bankers Association, says borrowers need to be patient.

“I think home values will come back and I think people should be educated first before they walk away from a home and turn the keys in. There are a lot of repercussions to making that type of decision,” said Sanchez.

But if enough folks lose the faith and walk away, then Florida could be hit with a second wave of foreclosures.

The Florida Homebuilders Association says a second wave could flood an already saturated housing market.

“We do have to monitor what’s going on with short sales, with foreclosures and unemployment, because that can edge the number back up in terms of months supply on the market,” said David Hart with the Florida Homebuilders Association.

The best advice bankers, builders, and real estate agents have for worried homeowners is to ride out the storm of falling values.

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  • by Bob Location: Crawfordville on Nov 25, 2009 at 06:58 AM
    What to do ??? Listen to thier advice and wait it out ?? Easier to say than to do - I am not a fan of walking out on the property - but I have relatives that have not paid mortgages and it took well over a year for them to take over the property. A lot of money can be saved in a year - and maybe a restart could be become reality. Sure do agree with those who refrain from purchasing 'new' items they cannot afford. This is a time to restrict not a time to expand. Until the employment issue is resolved - we must be frugal with our resourses. And for those that do not know how - learn. The goverment will not help you - and should not
  • by Jack Location: Tallahassee on Nov 25, 2009 at 04:31 AM
    I find it hard to believe that 'nearly half of Florida homeowners owe more on their mortgages that their homes are worth'. That would seem to be an inflated figure. But whatever the number, these people need to take some responsibility for their poor decisions. There is a big difference in what you perceive you have money to buy things with and what you can actually afford. Too many just go our and spend their paycheck, without considering long- term implications. Our society thinks that they have to have then new car, the cell phone, the cable TV, etc, even though they can't afford it. With the government here to bail them out, why not continue to overspend. The government needs to get out of social services and make the people be responsible for themselves.
  • by Anonymous on Nov 24, 2009 at 08:52 PM
    And if you have a decrease in income and are having trouble paying your mortage and the mortage co want work with you like Obama said they would..what do you do ???
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