Consumer Confidence Rises in Florida; Housing Market Projected to Rebound By 2008

Consumer confidence is up — or is it down?

Economists from the University of Florida credit lower gas prices over the last month with boosting the Florida Consumer Confidence Index to a seven-month high.

On the other hand, the Conference Board’s national index of consumer sentiment fell last month, sparking concerns about the future of consumer spending.

Solid employment numbers and the absence of hurricanes helped the most recent numbers, but the good feelings could be fleeting. UF economists say the downturn in the Florida housing market isn’t yet reflected in the numbers.

Look no further than to the St. Joe Co. for proof that the market is going through a dry spell. When a North Florida real estate developer with some 820,000 acres to build on says the residential housing market has slowed, people listen, after all.

Meteoric rises in home prices that have left many buyers out in the cold, and the increased Florida mortgage borrowing costs over the past year have left a tepid and uncertain market in their wake.

Analysts certainly recognized this yesterday when St. Joe CEO Peter Rummell and his fellow execs said that a reasonable balance in housing inventory and supply and demand will not return until 2008. Especially in “Northwest Florida” as St. Joe prefers to refer to the state’s Panhandle.

While St. Joe’s economic and political clout has never been doubted, it was notable a slightly humbled Rummell told analysts that “the viability of the Northwest Florida market is now recognized… we are convinced we did the right thing there.”

Like many other developers and home builder organizations, St. Joe has been scaling back development after five straight years of record growth.