As one of the hardest hit states during the real estate downturn, Florida often pops up in market reports as having noticeably higher foreclosure rates and a greater number of underwater homes.[IMAGE]
Even so, the state is also becoming recognized for the amount of investor interest it is drawing and how quickly some of its markets are climbing out of the housing slump.
For example, the ""National Association of Realtors"":http://www.realtor.org/ recently cited data from ""Move Inc."":http://www.move.com/company/corporateinfo.aspx?source=web showing the ""top 10 turnaround markets"":http://realtormag.realtor.org/daily-news/2012/05/10/top-10-turnaround-housing-markets?om_rid=AAFfED&om_mid=_BPrAyvB8i7CyqZ.
Miami was listed as number two and Orlando was number three. In addition, five more Florida areas made it to the 10 ten list due to their increases, with Naples listed as number five, and the last four on the list based in Florida.
Yet, a recent report from ""Floridarealtors.org"":http://www.floridarealtors.org/ stated that while Florida is in a revival period, distressed properties will remain a big part of the real estate market for the state in the next 10 years.
In fact, Florida holds nearly a third of the total shadow inventory nationwide. Shadow inventory in the report is the number of distressed properties (90+ days delinquent, in the foreclosure process, or are REOs) not listed on the market.[COLUMN_BREAK]
""Part of this is due to what happened here during the housing recession. Part of it is due to the tie-up of potential foreclosures in the courts. In any case, the size of the inventory means that it will take years to work off,"" the report stated.
And, as long as these distressed properties are so visible in the market, they will continue to be a drag on prices.
However, as realtors and lenders start to more effectively maneuver their way through the landscape of short sales, the less harmful alternative to foreclosure is becoming more common in the industry.
""In essence, lenders have discovered that the loss associated with a short sale is less than the loss from taking a property into inventory and absorbing the cost of holding that property and then selling it later. Realtors, for their part, have learned how to market short sales in an efficient fashion,"" according to the report.
The report further explained that for most of 2008, both lenders and realtors were confused about the short sale process in terms of the necessary paper work, lender policy toward short sales, and the timeframes for various lenders.
As investor interest, foreclosures and REOs have also lowered, pointing towards less properties entering into the shadow inventory.
According to the report, the flow of new seriously delinquent loans moving into the shadows seems to be offset by the roughly equal number of sales for distressed properties.
While the report projects another decade or so before the state trims off the excess supply of distressed homes, the number of years really ""depends upon the revival of the economy and the real estate market, the decisions in the courts, and the shape of regulation that comes out of the current policy debates over the future of Fannie Mae and Freddie Mac.""