Despite Slowing Florida Housing Market, Some Business Owners Remain Optimistic

If you believe the surveys in the papers these days, small business owners are growing less optimistic as they see a slowing economy across Florida.

Look closer, though, and you might find that owners can be pretty upbeat, provided their businesses are well-positioned to weather a downturn.

Even though the Florida housing market has slowed, even embattled real estate firm owners have reason for optimism.

The slide in home prices of late is actually making buying a house more affordable for many first-time home buyers, including blue-collar workers who are now being priced out of the rental market. “Many of them are saying, ‘maybe it makes sense to buy,’” one Realtor said.

A survey of small company owners by the National Federation of Independent Business (NFIB) found that overall, they were less optimistic last month.

• The NFIB’s small business optimism index fell 2.2 points to 95.9, the lowest reading for the index since March of 2003.
• The survey found the more businesses are borrowing, a possible indication that cash flows are slowing along with the economy.

But two components of the index — the number of job openings and owners’ plans to create new jobs — rose last month. That indicates that even as small business optimism has ebbed, many owners are comfortable enough to think about expanding. Some business owners are upbeat because they’re in industries that stand to benefit from a downturn.

Lew Freeman, whose Miami-based businesses include forensic accounting and Florida real estate consulting concerns, specializes in helping lenders who are worried about borrowers who look like they’re heading for default.

Business is up right now — “bad is good,” Freeman said — because Florida mortgage lenders are seeing more signs of trouble as the economy slows and don’t want to wait for an actual default to occur.

Freeman’s company looks over a borrower’s books and determines whether it’s likely to default. After the real estate and mortgage boom of the last few years, “I think we’re going to see a lot of setbacks,” he said.

That will keep his revenue increasing, but Freeman also noted that he’s not immune from the challenges that other small business owners are contending with. He’s also had to deal with rising expenses, including higher energy prices and the rising cost of Florida insurance, as the state is hurricane prone.

Other business owners have had the foresight to make their companies less vulnerable during a downturn.

Jon Bailey, co-owner of Bailey Gardiner, a San Diego-based marketing firm, described himself as cautiously optimistic about his company because it diversified away from heavy dependence on clients in the real estate industry.

“We are continuing to grow when I see competitors failing, and I think that that has to do with smart business planning and a lot of crystal balling about the future. We looked at indicators, attended seminars about the future of the industry and realized it wasn’t going to remain at that breakneck speed,” he said.

Locally, sky-high prices and Florida home loan costs still well above what they were a year ago (despite drops in seven of the past eight weeks) have resulted in much concern. Only time will tell what the long-term economic impact of the housing market cooldown will be, but it seems that small and big businesses alike are preparing for the worst while hoping for the best.