Polk County, Fla., Economy Struggles in June

The Lakeland, Fla., area economy endured a sluggish month in June as the housing market posted declines and the jobless rate increased slightly, according to The Ledger.

Realtors across Polk County sold 554 existing homes in June, a drop of 16.3 percent from a record 662 in June 2005. Sales in Lakeland fell 10.5 percent to 366, while East Polk County sales dropped nearly 27 percent to 177. In Bartow, 11 homes were sold in June, unchanged from the previous year.

The reason? As we’ve discussed at length regarding markets in South Florida, it can be traced to a combination of higher home prices and more expensive Florida home loan payments, coupled with rising insurance premiums and property taxes.

“Higher mortgage rates are finally starting to cut into the housing market. I think it’s not an unexpected slowdown,” said Kevin Brickey, an economist with the Hillsborough County Office of Management and Budget.

Although a lull in sales was expected after last year’s record performance, continued decreases in new home sales could start to affect employment in the construction industry. In June, Polk builders pulled 571 permits, a 49 percent drop from 1,119 last year. The June 2005 total was Polk’s fourth-highest on record.

The area labor market posted a 3.4 percent jobless rate in June, down from 4.2 percent the year before but up from 3.0 percent in May. Polk County normally sees a summer rise in unemployment as tourism- and agriculture-based industries dump jobs, said Carl Brown, an economics professor at Florida Southern College in Lakeland.

In addition, Polk County posted more than $10.1 million in tourism revenue in May, the most recent monthly figuresw available from the County Tax Collector’s Office. May’s total, which includes hotel and vacation rentals, was up 3.5 percent from $9.8 million the year before.

Taxable retail sales totaled more than $707 million in April, the most recent month available from the Florida Department of Revenue. April’s total was an increse of roughly 6 percent from the year prior. Only time will tell if these trends continue, but experts are optimistic that a major market crash is not on the horizon. Check out the attached graph for a visual on how this particular segment of the Central Florida housing market is doing.