Economic Outlook
There was a full house of 400 attendees at the Manatee Chamber's Economic Development Council "Economic Forecast Breakfast" on February 21st. Henry Fishkind, Ph.D. and Florida’s premier economist, discussed the current and future state of economics in Manatee County and across the nation.
Dr. Fishkind predicted a plateau in the local housing market, a slight slowdown in population growth, some slowing in job opportunities and higher interest rates in 2006. Affordable housing, one of the biggest impediments to attracting and retaining employees in our region, will require a change in mindset to allow for greater density and smaller homes, Fishkind said. Job growth locally is exceptional but local wages have not caught up with the national average.
On a national level, he predicted good momentum in the U.S. economy through the first half of 2006, then weakening through 2007 and a recovery in 2008. Although Manatee housing prices are relatively attractive, the Sarasota, Manatee-Venice metropolitan statistical area ranked No. 9 on an index of least affordable housing markets for the fourth quarter of 2005.
A full audio podcast of Dr. Fishkind's presentation is available by clicking here. Podcasts can be downloaded to any MP3 player, including iPods, or to any computer. The slides accompanying this presentation can be found here.
Dr. Fishkind's presentation was sponsored by 1st National Bank & Trust and is an annual event. Visit http://www.manateechamber.com/ for information on upcoming seminars / events.
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Our thanks to Manatee Educational Television Consortium (METV) for providing the audio content and Fox Advertising for editing / producing our first podcast.
3 Comments:
Very informative! It is so convenient to have more educational opportunities online. I am looking forward to seeing more!
I was so sorry to miss this presentation and am THRILLED to see it available online. Please give us more seminars electronically. It's so difficult sometimes to get out of the office. Thanks!
As a region, we will likely suffer in many ways if we don't consider increasing our density as it relates to real estate development. There are many exciting and 'out of the box' discussions and attempts to address the 'affordable housing' issue we face as a region (e.g., land trusts, etc.), but the reality is simply this...supply vs demand ~ less density = less supply therefore higher demand leading to higher costs; conversely, the opposite is true (its simple economics people).
However, also keep in mind, increasing density will inevitably increase our transportation challenges which we already can't fund appropriately in order to meet our current capacity needs, let alone the maintenance and repair of our current roads/infrastructure. There may be a little light at the end of the tunnel though (and I don't think it's a train!); the local housing market has cooled in recent days which should at least normalize real estate market valuations a bit allowing people the opportunity to get in before another rise in prices when those baby boomers start moving to Florida.
Also, while interest rates may rise a bit, its actually likely that short term rates will likely drop in the near future due to the fact that we already have an inverted affect in the bond market, thereby eventually normalizing the bond market a bit which will inevitably drive the short term rate market a little lower allowing people a way to continue to afford those expensive homes :)
In addition, Mortgage Lenders are going to continue to come out with innovative products which allow more people to qualify and afford a new home that they otherwise wouldn't be in a position to afford. For example, you can now finance a home for 45+ years instead of the normal 30. This will be done in order to drive origination volumes that have steadily been decreasing since the refinance boom of the early 2000's ended in July of 2003. While we are seeing the secondary lending market contracting a bit as it relates to the more 'exotic' loan programs (e.g., Negative Am or Interest Only loan programs) due to a waning investor appetite, we are still seeing other new types of loan programs come to market on a daily basis to help people qualify for a home, and, with short term rates eventually dropping a bit and long term rates rising only slightly over the next 12-18 months (all things being equal), we should continue to see a robust real estate market which will help continue to drive our local economy.
All that said, we still end up with a HUGE transportation problem either way that has no clear solution in sight...hmmm...maybe that light at the end of the tunnel IS a train after all? at least it would be a mode of transportation?! :)
Bob DeCecco, CPA
President/CEO
Aclarian Mortgage
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