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2009 In Pensacola Real Estate



What happened in Pensacola real estate in 2009? Here are summaries of some of the bigger stories in real estate for 2009, especially those that had an effect on the local market.The obvious big story is the economic slow down, which is affecting real estate all over the country, not just in Pensacola. That story is covered extensively in the media, so I’ll skip writing about that. It’s not much fun to write about anyway and we all know it is bad.

The Strengthening Real Estate Market

According to the Florida Realtors sales reports, residential home sales have increased statewide in 2009. We have also seen an increase in Pensacola homes for sale, especially in the latter part of 2009. That is good news.I will continue to publish updates throughout the coming year on the Pensacola real estate market because the future performance of our market is not clear right now. With the extension of the home buyer tax credit, the Pensacola real estate market should remain strong at least through April of 2010. However, we are also looking at the possibility of many new foreclosures as more adjustable-rate mortgages readjust in 2010. We might also be looking at mortgage rate increases in the near future.

Credit Issues

Credit CardReal estate agents I’ve spoken to the past year are all lamenting the same problem. They have clients who want to buy homes, and there are plenty of well-priced homes on the market, but the banks are being real tight about lending out the money. The supply of mortgage money and the strict underwriting rules have prevented many seemingly qualified home buyers from obtaining a mortgage. I believe the stricter lending rules were the biggest factor holding back the growth of the local real estate market.Don’t even waste your time trying for a conventional loan unless you have 20% cash for a downpayment. These stricter guidelines resulted in a resurgence in applications for FHA loans, which require only a 3.5% downpayment. Additionally, Pensacola is blessed with many military and ex-military citizens who are eligible for VA loans. That at least kept the market afloat, along with a few other factors as discussed in a previous Pensacola Real Estate News article. According to the Florida Association of Realtors, banks are beginning to loosen up some loan restrictions and money is starting to flow, but only for residential loans, and not to the extent needed to really infuse life into the real estate market.

State Farm Decides To Stay In Florida

Insurance has been another intriguing story of 2009, especially as it applies to State Farm. I personally have insurance with State Farm, and they have been very good to me. I was very happy with the way they handled damage after hurricane Ivan back in 2004, although I heard from others who were not so happy in their dealings with State Farm. I did feel a bit betrayed when I found out they were leaving the Florida market because Florida insurance regulators refused to allow State Farm a ridiculous rate hike of 47%. State Farm already cancelled policies of all home owners who lived within a mile of the water, which means they effectively left Gulf Breeze.

However, State Farm also needed the approval of regulators to leave the state, and this caused conflict on how best to handle the exit. Finally, on Dec. 16, 2009, the Florida Department of Insurance announced an agreement: State Farm would stay. It could drop no more than 125,000 policies and raise rates only 14.8 percent. Wow, only 14.8%. Sounds like State Farm customer came out real winners on this deal. I guess it is better than getting dumped and having no choice but to pay for insurance through Citizens Insurance. I’ll monitor the insurance situation and report on anything of interest that develops.

I previously reported on my dislike of the tactics of Allstate. I still cringe when I see their commercials. Check out my article Allstate to Pay Fine

Chinese Drywall Disaster

Yet another disaster caused by the Chinese manufacturing process has hit Florida hard. They’ve threatened the health of our children with lead paint based toys, killed our pets with tainted dog food, and now they are ruining our homes and our health with bad drywall. We are paying a big price for getting cheap products from overseas. I’d like to see America start producing quality products again, but with our Walmart mentality, look for more defective products coming your way (end of rant).

From 2005-2007, the U.S. imported defective drywall from China. It smelled bad, corroded metal, and caused healthRuining_Our_Health_Bad_Drywall problems. It has not yet been determined how many homes had this defective drywall installed, but the numbers will likely be in the tens of thousands. Lawsuits are also in process right now over this disaster. I feel for the poor families who thought they were purchasing a quality-built new home only to find out they had purchased a home that had to be gutted just to be habitable.

Unfortunately, there wasn’t a lot of good news for real estate in 2009. Let’s hope 2010 is brighter. Check back at Pensacola Real Estate News for continuing updates.

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