""IHS Global Insight"":http://www.ihs.com/products/global-insight/index.aspx released an analysis on economic issues in Florida, revealing that the presidential swing state is most concerned about the effect of foreclosures on its housing market.[IMAGE]
IHS' US Regional Economic Group released its report on Florida's economy as part of a series cataloguing the economic issues most important to swing states in November's presidential election.
According to the report, the Sunshine State's payrolls averaged a 0.1 percent annualized decline during the first half of the year, with weaknesses showing up in the construction sector, as well as in state and local government employment.
Most troubling to the state was the high foreclosure activity. In the first quarter of the year, the percentage of mortgages in default climbed to 14.3 percent, the highest in the country and more than three times the national average (4.4 percent).[COLUMN_BREAK]
In terms of prime and subprime loans in foreclosure at the end of the first quarter, Florida also ranked number one.
Florida's housing market is not expected to improve until foreclosure activity stabilizes; however, the large backlog of foreclosures currently waiting to go through the courts will prevent any stabilization for some time.
So far, housing recovery in the state has been shouldered mostly by increases in home sales fueled by ""drastically improved affordability."" Existing single-family home sales are trending higher in Florida, removing some of the excess inventory from the market and stabilizing prices. Even so, IHS expects it will be almost a decade before the state's home prices return to 2008 levels.
Private-sector services-referred to in IHS' report as ""the backbone of the Florida economy""-have performed relatively well so far this year, and the state labor market is expected to bounce back over the rest of 2012. Tourist activity improved, particularly from family vacationers and international travelers.
Despite that news, IHS anticipates that the Sunshine State still has a long way to go before it is fully recovered from the recession. To date, the state has gained back 20 percent of recessionary job losses, and its unemployment rate in June (8.6 percent) ranked 13th highest in the country. Employment is expected to advance 71,000 in 2012, with the construction and government sectors declining.