Florida Primary Brings Housing Crisis Front and Center

Housing promises to play a star role in the upcoming Florida primary

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Still licking his wounds from a disappointing loss to Newt Gingrich in the South Carolina primary, Mitt Romney is moving on to Florida, trying to score some political brownie points in the Sunshine State by bringing up the housing crisis that has virtually gutted America's middle class.

Florida's the perfect place for Romney to attack. Floridians have suffered greatly as the fallout from the housing bubble continues to ripple through the state. Romney hasn't neglected to horn in on Gingrich's connection to the housing mess as a consultant for the much-reviled government mortgage giant Freddie Mac.

"While Florida families lost everything in the housing crisis, Newt Gingrich cashed in," a new ad from the Romney campaign says. "Gingrich was paid over $1.6 million by the scandal-ridden agency that helped create the crisis."

But past all the political posturing and jabs at his on-again-off-again foe, Romney has a point in striking the housing chord in Florida. In many ways, Florida's housing woes mirror and even magnify conditions many other Americans are facing around the country.

[Mitt Romney Hits Newt Gingrich on Freddie Mac Profits]

People care about Florida's housing market, says Jed Kolko, chief economist at real estate website Trulia. "The spotlight is on Florida because Florida is part of a national housing market," he says. "So much of the search activity we see comes from the Northeast and the Midwest, so people all over the country care about the Florida housing market."

"Because the Florida housing market gets more national attention, it takes on more importance," Kolko adds.

And right now, there is a ton to talk about when it comes to the health of the housing market in Florida. The state has been one of the hardest hit by massive overbuilding and housing price collapses. According to experts, home values have tanked almost 50 percent since the meteoric highs of the housing bubble in the mid-2000s.

While that makes housing incredibly "affordable" for baby boomers looking to snag a place in the retirement mecca or others looking for a vacation home, it has put a ton of pressure on existing homeowners, many of which have underwater mortgages and have struggled to stay current on loan payments.

That has touched off a serious foreclosure situation in Florida, perhaps even worse than in infamous foreclosure hotbeds such as Arizona and Nevada. "Florida has a huge backlog of foreclosures, even more than other states that have high delinquency rates, because the foreclosure process takes much longer in Florida than it does in most other states," Kolko says.

[Read: Romney Refocusing His Campaign.]

According to Realty Trac, foreclosures in Florida take more than 800 days, the third longest in the nation and more than 260 days greater than the national average. That means while the overall foreclosure numbers and inventory might be dropping, many more properties are still stuck in the gummed up system.

Past the human cost of more people at risk of losing their homes, the Florida markets face another hurdle when it comes to absorbing the stock of foreclosed properties. As long as properties are caught in a long and laborious foreclosure process, the state won't be able to benefit from some of the government policies being discussed to help remedy deep housing market problems.

"The government [proposal] to rent out foreclosed homes won't do Florida much good because more foreclosed homes are still stuck in the process in Florida, and aren't ready to be sold or rented out," Kolko says, which will keep home prices depressed and prolong a state-wide housing recovery.

Can Romney's sudden sensitivity about the human cost of the housing crisis appeal to Floridians and get him a win in the primaries? Just as Romney has dredged up Gingrich's connections to the GSEs again, his enemies haven't forgotten his nonchalant remarks about the foreclosure epidemic.

"As to what to do for the housing industry specifically and are there things that you can do to encourage housing: One is, don't try to stop the foreclosure process. Let it run its course and hit the bottom," Romney said in an October interview with the Las Vegas Review Journal.