Mortgages, Real Estate Fluctuating in Hernando County, Florida

Located on the Gulf of Mexico, Florida's Nature Coast is known for mermaids and manatees. Large, undeveloped lots and tracts of land. Springs and rivers that are 72 degrees year-round. "For Sale signs" and abandoned houses are becoming a part of the natural landscape as well. Surely a sign of the times that even the most remote areas aren't immune to.

Foreclosures on the rise

Inventories of houses for sale are growing everyday. Something that took this area by surprise. Last year in July, our house that was appraised at $250,000.00, is now worth around $200,000.00. This leaves us with negative equity in the home. It also lends to the rise in foreclosure rates. When there is equity in a house, you can refinance to get a lower interest rate and monthly payment. When there isn't sufficient equity, there is no chance of refinancing to get a lower payment. Thus the large foreclosure rate. In July of 2007, Florida was 2nd to California in foreclosure filings.

Lots of cleared land waiting to be developed

Less than a year ago, developers were clamoring to clear land and begin the process of installing the infrastructure for new neighborhoods. Today these cleared tracts of land sit barren, with the weeds being the only thing rising from the soil. There are 4 new developments within 15 square miles of our house that have now been abandoned, awaiting either bankruptcy or foreclosure. This is the norm nearly everywhere you go on the Nature Coast.

Banks are putting the clamp on mortgages

18 months ago, when we began the purchasing process of our current home, there were lenders that were offering programs for people with no verifiable income, or that were self-employed with less hassle than you might expect. Today, in Hernando County, you can't find a mortgage if you don't have a job or verifiable income. If you are self-employed, you need to have 3 years of tax returns showing your income. Even if you have a job, the banks want much more information from you and about your past before they will even consider giving you a loan. Even property appraisals now require 6-7 comps, or comparable sales, from the area that you are looking to buy in. They used to ask for three. It is getting nearly impossible for people with low to moderate income to get financing.

Back to Nature for the Nature Coast

Since undeveloped property is remaining uncleared and vacant, it seems that the level of growth for Hernando County, that was slated to develop faster than Pasco County our neighbor directly to the south on the Gulf of Mexico, will probably have to wait for at least 5 years. Pasco County has experienced a larger slump in the market, due to such accelerated growth. But it will rebound faster because of the larger population and inventory of houses. Hernando County will do well to keep the level of growth stable for the next three to five years as the market rises again.

Property taxes and insurance rates on the rise

For a county that has seen the market slow so dramatically, the property taxes have not slowed down at all. Neither have the insurance rates. Hernando County did not suffer any severe damage from the hurricanes of 2004-2005. The insurance crisis in Florida sees to it that each and every homeowner gives their fair, or unfair, share. My property taxes went up 50%, and the insurance increased 50% as well. My house in Pasco County was taxed over 150%, and the insurance tripled in 3 years. It's a wonder that there are any homes that aren't in foreclosure. At $500 a month for insurance and taxes alone, it doesn't leave much for anything else.

People are leaving sunny Florida for cheaper places to live

When asked, most homeowners will say that the insurance crisis and property tax increase are the top reasons they would consider moving out of Florida altogether. Some will say that they can't afford to own a house because of this. Others say that they will move to North Carolina or Alaska before they will pay double and triple insurance and tax rates. They are definitely right when they say that it is unfair to all of us. In the very near future, probably around March 31st, there will be a mass exodus from the state of Florida. This is somewhat expected around that time of year anyway with all the snow birds going back home. But the extra vacancies will be from homeowners fed up with the current way of life around here.

Needless to say, the Hernando County area of the nature coast of Florida is very beautiful. It seems that the areas of pristine, native Florida will remain, at least for a while longer. With mortgages down, and foreclosures up, For Sale signs will probably be the next thing to fall.