According to a report from the University of Florida, high unemployment is the main reason that Florida’s real estate market is suffering and is subsequently delaying a recovery.

The state’s unemployment rate is at its highest since 1975 having increased to 11% in September 2009. Combined with a high number of foreclosures, it means Florida is at the bottom out of the number of US states likely to recover from the economic downturn.

Timothy Becker, director of UF’s Bergstrom Center for Real Estate Studies, said: ‘Most economists think the recession is over, but people are afraid to spend money as unemployment keeps going up which creates problems for every sector of the real estate market. Florida was the first one into the recession, and it’s probably going to be the last one out.’

The report also stated that despite the number of new foreclosures slowing down and those ‘bargain’ ones selling well, there is still concern that more will hit the market.

Becker said: ‘There is a lot of speculation that there could be a double-dip recession, where we recover just a little bit and then go back into recession again.’

As a result of banks still being reluctant to lend and builders not wanting to build so they don’t have excess stock, Becker stated that the outlook is rather gloomy and that foreign property investors may be needed to start a recovery.