Over the last year, many real estate markets across the nation have begun to see significant improvement in the housing markets. At the same time, there are a number of states in the country whose real estate markets continue to struggle. States with many similarities, like California and Florida, are experiencing vastly different recovery rates.
Both states saw large numbers of sub-prime mortgages and extraordinarily high prices flooding the real estate market at its peak causing a tremendous crash when the housing bubble burst. However, sometime last year California’s housing market began to turn around. Sales are up and home prices are on the rise. Florida, on the other hand, is still working its way through the depths of the housing crisis. Median home prices are still falling and there is not much sign of them stopping very soon. So why are these very similar states having such completely different outcomes? The answer is as simple as paperwork.
While both California and Florida have both had high foreclosure rates, California homeowners who are in default will lose their home after 19 months of non-payment while in Florida the average is much higher at 25 months of non-payment. The additional six months in their homes makes things easier on the homeowner, but the unfortunate reality is that keeping homeowners in homes that they can clearly not afford only prolongs the market recovery process.
While the faster foreclosure process in California may be more efficient, there have been a number of cases where homeowners claim that their homes were foreclosed on erroneously due to the lack of judiciary process involved with foreclosures in the state. That being said, the foreclosure rate in the state of California has dropped drastically from its peak in the summer of 2008 and continues to drop month to month.
Florida homeowners are afforded the additional time and judiciary process to exhaust every means possible to keep their home. As a result, the Florida courts remain backlogged with foreclosure cases waiting to be heard and the number of foreclosures continues to rise each month.
More factors contribute to why those with a California real estate license are well into an upswing while Florida real estate license are just beginning to see improvements. Diversity in the California economy and a stronger employment outlook are additional boosts for the California homeowner. Florida also suffered a tremendous amount of coastal development prior to the market collapse that has added to their market difficulties; California did not have the same amount of overkill in their coastal development.
Location is everything in real estate and this rule is holding true in the real estate market recovery process as well.
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About David Goldstein — David Goldstein is an Owner and Founding Partner of Express Schools, LLC. which operates online education providers Real Estate Express, Insurance License Express and License Tutor. Follow him on Twitter.