It’s a buyers’ market in Florida housing. That’s a fact that no one denies. Sales are slow. Prices are stagnant. The projections, if you believe people like Wayne Archer of the University of Florida’s Bergstrom Center for Real Estate Studies, are gloomy. The question, of course, is “Gloomy for whom?”

The fact is that when you step back from the housing sales figures and take a look at the big picture, what you see is far different. A healthy and growing job market, recent drops in mortgage interest rates and property tax reform combine to make Florida an excellent place to buy a home – note that word. HOME, not a house, not an investment property, not a speculative deal, but a HOME.

Florida’s real estate boom of the last five to ten years has been driven in large part by two things – land speculation and sub-prime lending. Anyone can tell you that those are a shaky foundation for long-term growth. The recent slowdown in the real estate market is, likewise, due to the breakdown of those two factors – and it should come as no big surprise.

What Happened to the Bubble?

Real estate prices were driven higher and higher by investors who bought into the dream of flipping new construction and making a quick buck. They bought pre-construction and early construction properties with the intent of selling them at high profit when they were finished. According to some real estate analysts, close to 70% of real estate sales during the “boom years” were to investors.

At the same time, home buyers were seduced by the “creative financing” offered by many lenders. Promised fast gains in real estate value, many home buyers jumped at mortgage deals that were affordable in the short term. The first of those adjustable rate mortgages have hit the wall as they come up for interest adjustment, and those buyers who are unable to refinance are suddenly faced with mortgages that they can’t afford.

During the boom years, the real estate market favored investors. With prices rising as fast as you could record them, it made sense to buy with the intent to sell. Now that housing prices have stabilized and are even starting to drop slightly in some markets, the investment attraction has dropped. Those investors who bought with an eye to high profits from resales are ready to sell before prices drop. At the same time, many home buyers are faced with the prospect of a quick sale or foreclosure. The two market streams – investors unloading their properties to preserve as much profit as possible and homeowners who need to sell or lose their investment entirely – are creating a glut on the market.

Fewer investors and more houses on the market add up to a slow market. Buyers have been holding back, understandably. High property taxes and high interest rates had persuaded many buyers to wait for a better time to buy. For those home buyers who wanted to buy now, there is plenty of choice, and no urgency to close on a house before another buyer snaps up their dream home. In a soft market, a buyer who is in no hurry can afford to wait out a home seller in the hope that the price will drop, or try to negotiate better terms.

Florida is More than the Sum of Its Real Estate Market

Before we start mourning the death of the Florida real estate market, though, let’s take a look at the bigger picture. Overall, Florida’s economy is flourishing. The Florida unemployment rate continues at more than 1.3% below the national unemployment rate. Major companies – both national and international – are moving their headquarters and opening new offices in Florida cities, and account for nearly 150,000 new jobs in Florida since January 2006. In fact, the February issue of Forbes named six Florida cities in their top 25 “Best Cities for Jobs”.

Florida’s A+ Plan for Education is being touted as a model program for school improvement. Every school in the state is given a letter grade, so that it’s easy for parents to decide on options for their children’s education. The school choice program allows parents to move their children out of schools with bad grades, or provides incentives for them to work with those schools to improve them. Schools with poor grades are eligible for financial and technical aid to help them improve. Schools with good grades are eligible for monetary incentives as reward for doing well. In short, Florida has made providing excellence in education a priority.

Property taxes, which have been a major negative for many prospective buyers, are in the process of undergoing reform. Florida Governor Crist has committed not only to immediate tax cuts and savings, but to long term overhaul of the state’s property tax structure to make it more fair and equitable. In the meantime, there are several initiatives and methods to cut property taxes on the table.

Finally, for the first time in years, interest rates on Florida mortgages dropped for three consecutive weeks early this summer, and all indicators are that this trend will continue. Lower interest rates and lower home prices, combined with good schools, lower taxes and a strong economy – you can add up the numbers yourself.

Bad News for Speculators is Good News for Home Buyers

The doom and gloom sayers concentrate on falling home prices and the effect that those prices will have on investment value of housing. The fact is that most people are not buying real estate for speculation. Most people who buy houses are buying homes, not property. They are buying with the intent of settling in, raising a family, living in a community and creating a home.

Now is a perfect time for doing that in the Florida market. Today’s Florida home buyer will find a wealth of choices on the market, prices that reflect the value of their home, an excellent school system with a commitment to improving, a government that is committed to lowering property taxes while maintaining services and an economy that is attracting the biggest players in the world’s business market. Put all those together and shake it up with Florida’s stunning beauty, gorgeous beaches and balmy weather, and how can you lose?