While the rest of the United States shows signs of recovery from the residential foreclosure situation, Florida has now taken the lead as the number one state for residential real estate foreclosures and the Tampa Bay Area remains in the thick of things. With the recent nationwide settlement of robo-signing and lack of proper documentation for mortgage assignments having been resolved in some cases through class action settlements with the Attorney Generals of many states (Florida included), it appears that many of the foreclosure proceedings that have been languishing in the court system for years will now move forward to conclusion. This will result in more foreclosed properties being dumped onto the real estate market. In addition, we are also bracing for another round of mortgage foreclosure filings locally.
All is not totally dismal though as residential properties are indeed moving through short sales and foreclosure sales. Which makes one wonder if we are once again experiencing a false sense of security in the residential real estate market. Case in point, a lot of these local sales are going to local and out of state investors who are hoping to cash in on deflated residential property values and have the cash to buy. ( A client of mine told me years ago that when property values crash those that have cash are KING!) As a result we get a false sense that there is a viable pool of legitimate home buyers out there.
All to often we look solely at the real estate sales figures and forget to also look at the overall local economic and labor market to see if there really is an economic recovery going on that is attracting more employees into the market who are looking to buy homes. When we look at these figures locally they do not justify an upswing in residential sales as high unemployment figures remain steady and layoffs continue. (In the past our local economy was heavily dependent on new home construction!)
That all being said, what I have begun to see over the last several weeks is a strong upswing locally in new small business start-ups and expansion. In fact, over the last several weeks I have reviewed more commercial leases then I had during the entire year of 2012! Triple net commercial leases with base rents of $22-$28 per sq. ft. along prime local commercial corridors. It would appear that now that the Presidential election is behind us small business owners have decided to venture out into the commercial market once again. At least locally perhaps the economic train this time around will be pulled by the small business community and not the splashy Fortune 500 corporations.
Bottom line...there is movement in the local residential and commercial real estate markets but one needs to continue to move with extreme caution until we see signs of true verifiable improvement in the employment and economic figures.