Most of those who work in commercial real estate in Florida already know the state has seen a dramatic shift downward over the last several years. That fact was recently made clearer, as Federal Reserve Bank of Atlanta President Dennis Lockhart suggested that the economy in the Southeastern United States is lagging behind the overall U.S. recovery because of the region's more severe real estate slump. The slump includes both residential and commercial real estate.
"We have witnessed some pretty severe stress in both residential and commercial real estate markets in Georgia, Florida and Alabama," said Lockhart in a recent speech in Atlanta. He went on to say that the region also lags in other areas such as employment rates and the overall speed of recovery that other states are seeing. He said this may be due in part to a slower real estate recovery in the Southeast.
U.S. home prices have dropped by an estimated 30 percent since June 2006, according to the Standard & Poor's/Case-Shiller Home Price Indices. Atlanta, Las Vegas and Phoenix posted new post-peak lows in September. The numbers for Florida commercial real estate are also lower. Even so, many of those living and working in the state remain optimistic that the economy will turn around. And when it does, they want to be poised to benefit. For these individuals and businesses, commercial real estate is looking like a good investment, as prices are lower than they have been in a very long time.
Source: Bloomberg, "Lockhart Says Southeast Lags Behind U.S. Because of Real Estate," Steve Matthews, Dec. 1, 2011