Real Estate experts are anticipating that home sales will slow for the second half of the year. This is due in large part to the expiration of the $8,000 tax credit, for first time home buyers, that expired on April 30. However, those that signed purchase contracts prior to April 30th can still take advantage of that tax credit if they complete their transaction by June 30th.
Additionally, other factors will likely continue to contribute to the ongoing sluggish recovery in the housing market. For instance, the economic recovery that is currently taking place is largely a jobless one. In fact, since 2007, when the recession began, South Florida’s workforce has only recovered to about 90% of where it was before the recession began. Since South Florida’s economy was so dependent on the housing market, it will likely take some time for South Florida’s economy to recover given the ongoing real estate crisis that is impacting all of us on a daily basis here in South Florida.
Additionally, another potential problem for our local economy, an economy that is still very dependent on real estate development, is that many lenders are increasingly reluctant to make new construction loans to developers. Now that certain tax credits have expired, coupled with the increasingly sluggish real estate market, builders see stormy days ahead. Indeed, increasingly high unemployment rates, coupled with stringent mortgage lending guidelines, are keeping many prospective purchasers on the sidelines.
All of these factors contribute to the general consensus that our real estate market will continue to struggle to stand on its own without the assistance of government backed programs, like the tax credit for first time home buyers, or a sharp turnaround in the economy as a whole.
In South Florida, with the storm season under way, a natural catastrophe could tip the ongoing real estate crisis into further disarray. If high unemployment rates, and rapidly declining real estate values were not enough, then a strong hurricane directly hitting South Florida and causing extensive damage will only serve to worsen the ongoing real estate crisis here in South Florida.
If you are on the brink of foreclosure, and need to assess your legal rights, especially in light of the recent BP oil spill, please contact our office today.