A University of Florida study suggests the state's single-family residential housing market has bottomed.
"If you're thinking of buying a house, there's probably not much to be gained by holding out at this point," said Wayne Archer, director of UF's Bergstrom Center for Real Estate Studies. "It doesn't look like prices are going to fall anymore."
The quarterly survey of real estate industry professionals completed in January shows the share of respondents observing a drop in single-family housing prices has dipped, while a growing number find prices staying even with inflation.
"We see that as a benchmark," Archer said. "When prices maintain the same level as inflation, then we're probably in some kind of equilibrium. It indicates the market is stabilizing."
The exception is condominiums, which Archer said are overbuilt and prone to speculative and naïve investors.
But the overall news is good - Archer pointed out the most recent results reflect the first time in the UF survey's five-quarter history that the buyers' investment outlook for residential development has brightened. It declined for the first three surveys and was flat for the fourth survey at the end of October, starting to rise only in this latest survey, he said.
Also, because of the dominance of single-family housing, Archer said the latest findings have far-reaching and potentially optimistic implications for the state's real estate industry.
"You can't get away from the fact that the single-family housing market is the single largest driver of the real estate market," he explained. "Most brokers and real estate agents are dealing with single-family housing. Most lending is for single-family housing. And home furnishings are driven by single-family housing. So when it stabilizes, that's important."
Archer pointed out a restricted supply of land for residential development meant there was less overbuilding than there might otherwise have been.
Condos did not have this land restraint, which is one reason they are overbuilt, he said.
At the same time, condos are prone to strong speculative swings because they are considered a relatively easy commodity to exchange - it's not difficult to acquire them in multiple units or to buy contracts on them, he said.
South Florida may lag
The stabilization of the single-family housing market came earlier than anticipated and is not expected to affect all parts of the state equally, Archer said.
He predicted the quieter markets likely will take longer to rebound than those in South and Central Florida, where growth has been explosive.
Even with a turnaround, Archer said he does not believe Florida's real estate market is likely to reach the same level it did at its peak in 2005-2006.
"I don't think any thoughtful person would expect sales to go back to where they were a year or so ago," he said. "That was probably an overheated condition and it was extraordinary."
However, he said optimism about Florida real estate seems to be particularly apparent among foreign investors.
Many respondents commented that foreign investors and lenders are aggressively trying to invest more capital in the state's rental markets, he said.
"They apparently have no fears about the future of these markets, despite what we perceive as our problems with hurricanes, taxes and other concerns," he said.
For the survey, UF's Survey Research Center questioned 318 industry executives, real estate lawyers, market analysts, title insurers, financial advisers, market research economists, real estate scholars and other professionals in the field.
The last survey had 183 respondents.