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Florida Homeowners Are Bracing for a 20% Decline in Home Prices

Posted by Sami Thalji | Aug 26, 2022

A growing chorus of experts, led by Moody's is now predicting that the US Housing market will see a price decline up to 5% through the summer of 2023. However, that is just the tip of the iceberg. Moody's is also predicting that if s recession hits we may see price declines between 15-20% in the most overvalued markets in the country. That is not good new for Florida because almost every market in Florida is overvalued by at least 20% including Tampa, St. Petersburg, Lakeland, Jacksonville, Orlando, Ft. Myers, Naples, Sarasota, Ft. Lauderdale and Miami. A 20% price decrease would have catastrophic effects on the housing market and overall economy. Such a price decline will create a waive a foreclosures that will sweep through the state. A price decline makes sense, especially with the rise of corporate investors and hedge funds buying up single family homes and even entire neighborhoods. These hedge funds would like nothing more than a significant price decrease to allow them to push homeowners into foreclosure throughout Florida giving them a chance to scoop up the best properties at bargain prices.

A growing amount of experts in real estate agree with Moody's analysis. Research firms such as John Burns Real Estate ConsultingCapital Economics, Pantheon Macroeconomics, Zelman & Associates, and Zonda are all predicting price declines. Robert Shiller, who predicted the 2008 housing crash, believes we are in for a price reduction over 10%. Fitch Ratings is also predicting a price decline upwards of 15%.

As prices decline foreclosures rise because borrowers will have a more difficult time justifying mortgage payments if they are upside down on their home. That combined with banks and mortgage lenders sharpening their knives and moving quickly to foreclose delinquent homeowners who don't have equity. Banks foreclose more aggressively when there is no equity in order to protect their investments. A declining housing market combined with increasing household debt means that there is a reckoning coming in the economy. Consumers simply cannot maintain these debt loads, especially if they don't have equity in their home. Whatever happens, it should be clear by now that people should not listen to realtors and instead contact a consumer law firm like Florida Consumer Lawyers to discuss your home, debt, foreclosure, and other issues you may be facing. Trusting your personal finances to real estate agents is not a good idea for maintaining your wealth or building wealth.

About the Author

Sami Thalji

Sami Thalji is a native Floridian, born in Clearwater and raised in St. Petersburg, Florida. Sami graduated from Osceola High School in Seminole, Florida before attending and receiving both his Bachelor of Science and Juris Doctor from the University of Florida in Ga...


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