Friday, May 3, 2013
The 2013 Economic Summit
I will be the first to admit that blogging has taken a back seat this season to customer service, as it should. WE HAVE BEEN BUSY!!!! As always, it is my intention to get the word out there about what is happening the in local real estate market...to talk about select vendors that we've had success with...to share rental opprtunities, news of new restaurants and fun places in town to recreate & relax...I've sat down on more than one occasion to share info about a great property, but honestly, no sooner did i begin to compose a post touting the fabulous features of a new listing when BAM! It's sold!
Our inventory in Naples has been dwindling since hitting its peak in 2008 at approximately 16,000 active listings. Todays' residential listings number less than 5,000 in the Naples MLS, and this low inventory has been one of our greatest obstacles of the 2013 season. There's a lot more to the equation than just this, but this has indeed been our biggest challenge, as is with most of the agents we know.
Chip and I recently attended The 2013 Economic Summit here in Naples at The Waldorf. Nearly 500 attendees were privy to the insight and opinions of some of the nation's leading economists as well as local experts. Here's a summary [I use that word loosely based on the length of this post] of what these experts shared with us that I would like to share with you. More details are available, and I hope to blog about this again in the near future...
Mayor John Sorey was first to speak. One highlight of Mayor Sorey's speech worthy of mention is the fact that housing starts in the City of Naples for the year ending December 2011 was 80. One year later, in December 2012 housing starts in the City of Naples numbered 141! Next to the podium, John Tuscillo, Former Chief Economist to The National Association of Realtors. Mr. Tuscillo touched on many topics, but some of the highlights of his presentation are the following: He said the economy is better than is being perceived. Prices are increasing, employment is up, median home pricing has shown a 149% increase in the past 4 years nationwide--He told the audience that you can relate the real estate market to a country road, "There may be a few bumps in it, but for the most part it's pretty flat." He talked about the fact that the high percentage of cash sales could be a potential negative. Most cash activity is investor activity. Owners typically finance, do improvements and bring 'quality to the market'. Investors don't put down roots that owner occupants do--The mortgage to cash transactions need to be more balanced in order to sustain the recovery. John also spoke of the fact that Florida is doing better than the Nation as a whole, and he expects this to continue at least through the end of 2014. Overall he seemed pretty optimistic.
Next to address the crowd was the Senior Economist of Wells Fargo, Mark Vintner. He began his talk with this: "We are almost 4 years into the economic recovery yet there is still a considerable amount of uncertainty regarding sovereign debt issues in Europe, the federal budget deficit and the willingness of businesses and households to commit to major capital purchases." He believes it is the fiscal policy uncertainty in the US today that is responsible for the record low interest rates. He also shared his opinion on the importance of job creation to the recovery. Unemployment is 7.9%, but it really isn't down--there are actually fewer people actively looking for a job. Young men especially are dropping out of the job force. They lack skills to earn a decent living. The median income in the US = $50,000 and has not gone up in over 7 years! Rising stocks help bolster consumer spending at a time when real incomes have stayed the same. Other topics Mr. Vintner touched upon: The 2010 census added 3 new metropolitan areas to Florida. Florida job growth is still focused on leisure & hospitality, health services and trades & utilities. Interestingly enough though, there are 10% less people working in Naples today than prior to the recession. One quote in particular that I liked, which I will paraphrase: 'Every decision you make equals the risk adjusted to the rate of return'...he said, think about ordering a steak vs. salmon. There are a lot of people ordering steak right now.
Next to the platform was Shelton Weeks from Florida Gulf Coast University. He reiterated Mark's primary focus of the unemployment rate being crucial to a continued recovery. He spoke about our airport: Southwest Florida International, arrivals and departures peak in February and March at 1.1 million each year. Lowest arrivals and departures are in September averaging about 350,000. March is always the #1 Tourist Tax Revenue months. In June 2012, Collier County single family home building permits peaked and he believes we will see an upward trend for the next 12 months. This has been on the rise slowly since 2010 and we saw 2007 levels reached in 2012. Collier County population projections were as follows: 2015=341,959, 2020=375,585, 2025=408,254, 2030=439,367, 2035=468,770 and 2040=497,001. Yes, we are a growing community, and I think that anyone wanting to earn a decent living and live in a beautiful area with natural beauty, good health care and excellent schools should consider getting into one of the fields addressed above, namely: health care, hospitality, construction or service related jobs. One last item...The housing market in SWFL is going through a healing process--Inflation is subdued, but expect inflationary pressures to build as US global economics pick up speed.
Popular local speaker and Naples Real Estate market expert, Cindy Carroll from Carroll & Carroll Appraisers, offered so much great information---enough to fill another 3 or 4 posts. She did however say a few things I want to repeat. Cindy began her presentation saying, "Naples is a very unique market--It's resilient when other areas are not." She spoke of the low inventories. The number of Naples MLS listings are down 14% over this same time period last year while prices are up 17%. She talked about something I cover often: A balanced market! A one year supply of inventory = a balanced market. ~Currently in Naples, across the board, we have less than a 7 month supply. You do need to be careful when using generic statistics however, because each neighborhood is specific! High-end and low end are showing the most movement. She talked about Traditional sales vs. Short Sales and Foreclosures. Now, 84% of our sales are traditional. 12 months ago that number was 75%. In 2011 only 62%. To give an example, there are currently 89 listings in Olde Naples, and only 1 is a short sale opportunity. Cindy gave this brief summary: "There will be continued upward pressure on property values in the resale market in price ranges of diminished inventory...The number of traditional sales will continue to increase....Short sales will be worked out with lenders as opposed to going into foreclosure...The list to sale price ratios will continue to tighten...Properly priced listings will move faster...There will be competition and multiple offers on more properties."
Thanks for reading through this lengthy post. It was a fascinating afternoon spent with some of the best of the best in our industry today. Please do not hesitate to call us if you have any comments or questions. NaplesRealEstate.com is here to give you the latest news and information about real estate trends in our market place. It is our pleasure to assist you in any way we can. 239.370.0574
Thank you and make it a great day,
The Naples Real Estate Blogger