The Psychological Impact of a Florida Real Estate Slowdown

The strength of the Florida real estate market has always had a large psychological impact on local homeowners. It directly affects local consumer confidence and spending. So now that Florida real estate price appreciation is starting to slow, what can we expect is in store for the local economy?

We are currently living through a “highly unusual” slowdown. “The last time we had outright price declines, we were in a recession,” but this past year, Florida real estate price weaknesses occurred while the economy was strong.

As Florida real estate prices either level off or only increase slightly, homeowners will feel less and less wealthy, “even though they will not have actually lost money.” The feeling of lost wealth and the possibility of job loss within the real estate industry as Florida real estate sales slow will contribute greatly to a loss in consumer confidence and cause spending to drag.