The residential real estate market in Central Florida has been good since the last recession that occurred in 1991. The real estate market was red hot for a six month window between April to September, 2005. I had never witnessed such phenomenal price increases in my entire 30 years as a real estate professional in the state of Florida.

As a builder and appraiser, it is my job to be in tune with the pulse of the real estate market. Nationally, I always saw this scenario of unprecedented growth and expansion occur elsewhere throughout the country. Places like California and Massachusetts caught my attention. Now for the first time in my adult life (and I'm a native Floridian), the real estate market has been booming in Florida.

Some of the reasons this happened was more related to financing options, sub-prime lending, zero-interest loans, zero-down payments, and low-interest adjustable rate mortgages. All of these options made home buying more affordable.

The more buyers you have pursuing a limited supply of houses for sale created a sellers market, which caused home values to rapidly appreciate. This feeding frenzy pushed home prices up 30-50% within a short period of time.

One appraiser foolishly predicted the real estate boom would last 6 to 8 years and that you must "buy now" before prices rose higher. Like a dog in heat many rushed ahead and paid more than they should have sometimes.

History again repeated itself as in the late 1990's when Alan Greenspan coined the phrase "irrational exuberance". Market psychology and hype caused real estate to be bid up to unusually high and unsustainable levels. The cyclical effect however eventually occurs bringing down an overpriced market and balancing the economy. Rightfully so, for whatever goes up most one day come down.

Other variables effecting the Florida real estate market also must be accounted for. Soaring gas prices caused further inflation. A rise in interest rates followed, adding to the price of borrowing money for home buyers.

Higher mortgage payments certainly puts a sudden damper on eager home buyers and scares away others considering living beyond their means to secure their dream home. Weather troubles in the form of hurricanes, surprisingly swept through Central Florida in 2004 causing dreadful damage. The result thereafter was an immediate rise in property insurance. Further discouraging is the accompanying evil of home value appreciation, that being the rise in property taxes assessed by the counties.

These are just some of the reasons we are now seeing large inventories of unsold homes across the state of Florida. Unlike days of old before the snowbirds and international community arrived, Florida is not a cheap place to live anymore. We who live in Florida are now seeing higher real estate prices, paying higher property taxes, and struggling with higher property insurance premiums.

For those desirous of building their own properties, they also are being squeezed by counties for impact fees associated with new residential and commercial construction. Growth means more infrastructure must be built to sustain it, which translates into impact fees to build.

These are all some of the reasons we are having a slow down in the real estate market in Central Florida and throughout the rest of the sunshine state.

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