The impact from the Gulf oil spill has made matters worse for the Florida property market, especially in areas where oil may affect fishing and tourism, according to a new Fitch report.
The Fitch study supports last month's prediction by Moody's credit rating agency that warned that Florida property values could fall in areas affected by the spill.
Property prices in Florida, which has one of the highest foreclosure levels in the USA, have already fallen by up to 70 per cent since the peak of the market in late 2006, and any further reductions in property prices will naturally exacerbate the situation.
It is estimated that over 80 per cent of all homeowners in Florida are currently in negative equity – whereby the mortgage is greater than the value of their home – and nearly 40 per cent of all Florida mortgage borrowers owe more than 150 per cent of the value of the homes, Fitch managing director Roelof Slump said.
“Florida already ranks the worst among all states in mortgage delinquencies across all product types,” Slump said.
“It's a little hard to make significant projections about how much home prices are likely to decline,'' Slump added, ``but directionally, it seems pretty clear that given all the pressures these homeowners are under, both the frequency and severity [of defaults] are likely to worsen.”
Florida also has one of the highest unemployment rates – around 11.7 per cent.
Although the situation is extremely unfortunate for people living in Florida, the market downturn means that there are now some incredible property bargains available for people seeking to buy property in Florida.
To read our guide to buying property in Florida click here