The Q4 2010 Florida real estate survey, conducted by the Bergstrom Center for Real Estate Studies, at the University of Florida, has revealed that the investment outlook for Florida has reached its highest level since the first survey took place in Q1 2006.

With 271 real estate analysts and investors participating in the survey it is the most in detail survey of the Florida property market that takes place on a regular basis. It includes respondents representing thirteen urban regions of the state and up to fifteen different property types.

An improved outlook across most property types drove the general index higher as respondents believe that the property market in Florida is slowly coming off the bottom. One respondent commented that ‘property level fundamentals are stabilizing for the most part, and we expect a notable increase in transaction activity throughout the year.’

However, a continuation of foreclosure activity, shadow inventory from foreclosures that have yet to come to market and increased short sale activity are all combining to stop the decline in high inventory levels. New home builders continue to have a very negative view due to these factors along with continued difficulty in obtaining finance.

Home builders have started to focus on smaller houses at lower build costs in order to compete with the lower priced foreclosures and short sales but can’t keep up with the dropping prices of existing inventory. Meanwhile, high unemployment is cancelling out the positive of record low interest rates and keeping many would be homeowners out of the market.

The report adds that ‘prices will continue to lag inflation in the future as we continue to see large numbers of foreclosures and stagnant job growth. Additional foreclosures that add to the inventory and underwriting criteria that limits the supply of eligible buyers will lead to further price declines in existing inventory.’