The housing standoff between buyers and sellers in [tag]South Florida[/tag] will continue for another six months, and then prices in some areas will fall, a real estate trade group economist predicted Tuesday. In some cases prices may fall by 10 percent to 15 percent, said David Lereah, the National Association of Realtors’ chief economist, who spoke Tuesday in Coral Gables. But in many areas prices will still rise modestly this year, by 4 percent to 5 percent, he said. And when sellers finally bring asking prices down, pent-up demand will likely result in hordes of new buyers in South Florida. The long-expected shakeout of the [tag]real estate market[/tag] now underway is healthy for a region both overbuilt with new condominiums and overrun by speculators, Lereah said. Unlike in previous real estate downturns, the economic and demographic fundamentals underpinning South Florida real estate remain strong, he added.
But in the long term, he is optimistic. [tag]Baby boomers[/tag] continue to move here, international demand remains strong, unemployment in South Florida is low, and [tag]mortgage rates[/tag] — despite inching higher in recent months — are still at historically low levels. Just as important, Lereah said, the speculators are fleeing the market. He contends that speculators are most to blame for huge price hikes. ”Florida will be better for it with them gone,” he said. Lereah cited the increased threat of hurricanes and the availability of property insurance as South Florida’s two biggest worries. Such worries, he said, are prompting some baby boomer and retirees to look away from Florida. He noted a trend of baby boomers moving to places such as the [tag]Smoky Mountains in Tennessee and North Carolina[/tag].
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