Economists have been assuming that that Florida’s real estate market, one of the nation’s red-hot housing market, is a bubble that is about to burst. However, not everyone believes this will happen. Local Florida real estate organizations are aware of their market’s success and are positive that it will last longer than expected.

The slower economic growth, high interest rates and housing prices that have increased quickly will have a definite cooling effect on Florida real estate sales and prices in 2006. Then again, as Florida maintains its rank as one of the top five fastest-growing state in the country and with the Orlando metropolitan’s economy leading the nation, there are numerous of analysts who believe that Central Florida’s real estate market has many years of intense growth to come.

According to Mark Vitner, a senior economist, Florida has one of the best economies in the country. All of Florida’s industry and metropolitan areas have shown very healthy job growths. In fact, the September 3.5 percent unemployment rate is actually the lowest recorded number in the state of Florida.

Regardless of increasing interest rates and concerns that sellers raise prices rapidly, the real estate market of Florida certainly remains a market for sellers. One major proof of this is particularly because a thousand new residents move to the “Sunshine State” each day.  In addition, it is expected that approximately 440,000 more residents will be relocating to Florida next year.

With this large number of potential homebuyers, who will have to compete with constant foreign investors, vacation real estate market and nationwide residents desiring to purchase Florida real estate for future retirement, it is evident that the market will remain 

Central Florida’s real estate market managed to survive during the past 5 years despite the Sept. 11 terrorist attacks and other disruptive national calamities. The low interest rates in real estate have helped to recover Orlando metropolitan’s economy. Florida real estate prices soared and housing supply snatched up.

In addition, South Lake County, Haines City, Clermont and Poinciana, Orlando’s Four Corners, experienced a mix of single-family homes and condominium booms with many new properties available online.  Central Florida’s real estate development is still going on all over the area.

Many analysts have stated that there is no reason for concerns regarding Florida’s real estate market will be experiencing bubbles anytime soon. The country’s economy will be expanding in 2006 as the government will be investing in the post-Hurricane Katrina reconstruction. This rebuilding will help boost the real estate growth for next year.

In addition, the baby boomers are now in the peak of their real estate-buying years. Since Florida remains one of the best places to live in during retirement, the state has no problems with its real estate market.

A slowdown of the market may be expected due to new regulations of lending with interest-only programs. This will restrain some foreign home buying. In 2006, real estate developers are expecting a 5 percent reduction in construction costs and sales. Due to this, economists believe that next year is probably the peak for buying Florida real estate. 

Florida’s home ownership rate is currently at 77 percent and is expected to remain for the rest of 2006.

During the last quarter of 2005, the Florida condominium craze has provided sky-high prices to soar. The Florida real estate, in regards to condominium sales, is at the top of the condominium -craze list.

The rental markets of Florida are expected to grow quickly as next year starts. Moreover, numerous development prospects for construction of retirement homes, planned communities, resort hotels and urban-mixed properties are set for 2006.

Tracy McKirk

Fort Lauderdale Real Estate