Florida to see drop in condo starts

A recent forecast report released by the National Association of Home Builders projects that Florida state, and in particular metro areas within the state, will experience the steepest declines in housing starts this year compared to last year.

Housing starts in Florida are projected to fall from 198,900 in 2006 to 103,300 this year, a massive 48.1 percent drop, the builders group reported. Florida is home to nine of ten U.S. metro areas with the sharpest projected drop in housing starts from 2006 to 2007.

brick wallThe Sarasota-Bradenton-Venice metro area is top of that list, with a projected 67.5 percent decline this year compared to 2006. Next on the list was the Cape Coral-Fort Myers, Fla., metro area, with a 61.4 percent projected drop.

The other metro areas on the top 10 list are expected to see a 50 percent or greater slide in housing starts from 2006 to 2007.

Verdict? A shrinking number of condo starts combined with the total failure of other projects, plus the return of many conversions back to rentals, means that condo inventory is on the decline all over the state – great news for sellers – but perhaps not so great for buyers. 

Less condos = higher prices. Ergo, 2008 could signal the beginning of the end of a strong buyer’s market. After all, it can’t last forever – any more than the sellers’ market did.

The writing is on the wall.

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