COLUMN: Are we close to the end of our real estate woes?

Our beautiful beaches, hotels and condos are filled with tourists.

Restaurants are busy.

Late in the afternoon traffic is backing up on U.S. Highway 98 through Destin and south Walton County, and of course on Brooks Bridge.

It gives the illusion that we've overcome the worst economic downturn since the 1970s.

Sorry, we're not there yet.

The Wall Street Journal last week reported that welfare rolls are climbing across the nation - led by Florida, where the number of people on welfare has jumped by 14.2 percent in the last year.

Unemployment in Northwest Florida is between 6.6 percent (Walton County) and 8.6 percent (Bay and Santa Rosa counties). In all cases that's more than double the rate three years ago.

A slow economy means less tax revenue. City, county and state government officials have done the unthinkable: They have actually decreased the size of government. (Not true with the federal government, which is headed for an all-time deficit during President Barack Obama's first year in office.)

The worst thing this sour economy has wrought is a lack of confidence.

Talk to nearly anyone these days, and they can tell you about a family member who was downsized.

Or they can tell you about the unpaid furlough or pay cut they endured.

If they're area business owners, they can tell you about the lack of customers buying cars, or clothes, or washing machines.

Everyone will almost certainly say they're watching their pennies more closely than they have in years.

No doubt dozens of books are planned to explain what caused our red-hot national economy to falter, and then tank.

But here in Northwest Florida, it's not too hard to figure out what went wrong:

- Too much real estate was developed, and too many people put their homes up for sale.

- Too many people got greedy, greatly overpricing real estate. A few people made a lot of money selling $400,000 condos for twice that price before the irrational exuberance ended.

- Lenders made it too easy for too many people to buy overpriced real estate.

When real estate tanked at the end of 2005, a ripple became a wave that has impacted every segment of Northwest Florida's economy.

Is there any good news on the horizon?

Maybe. The region may be finding the bottom - at least as it regards home sales.

Each month, I scan data from Metro Market Trends Inc.

In May, a total of 766 homes were sold in Bay, Walton, Okaloosa and Santa Rosa counties.

That is just 5 percent lower than May 2008, when 807 homes were sold in the four counties.

Those numbers are potentially good news, because they indicate that home sales at least may be bumping the basement.

Metro Market's figures also indicate that home sale prices have dropped significantly. The average sale price of a home in the four counties was $226,835 in May; that's more than 15 percent less than the average sale price in May 2008.

That's not good news for individual home sellers, but it may be an indication that real estate prices are in the basement, too.

Finding the bottom in a real-estate driven economy like Northwest Florida is important, because it gives everyone - real estate companies, auto dealers, retailers, restaurateurs, newspapers and homeowners - a sense that we have no place to go but up.

Real estate's not going to burn red-hot like 2004 and 2005. Good.

But when real estate and the rest of the economy turn north, we'll all feel more confident.

Here's hoping we're almost there.

Pat Rice is director of content for Florida Freedom Newspapers. He can be reached at patrickr@nwfdailynews.com. Read his blog at nwfdailynews.com.