Volusia County Economy, Housing Market "Catching Its Breath," Experts Believe

The economy of Volusia County is expected to exceed the state’s average, bolstered by rising population and low unemployment rates, according to economic forecasters at the University of Central Florida.

But there are two sides to every story. The average wage for the Volusia County (also known as the Deltona-Daytona Beach-Ormond Beach metropolitan area) will continue to remain near the bottom of the 12 areas studied by UCF’s Institute for Economic Competitiveness.

Volusia’s average unemployment rate will continue to hover just below the state’s expected 3.2 percent unemployment rate for the next three years, according to the quarterly state and regional forecast by the UCF institute. Flagler County was not included in the report.

Overall, the Florida economy will continue to see economic growth from 2006 to 2009, with Volusia expected to rank in the top half of the state in employment and personal income growth, according to the report.
The UCF report predicts the county’s population will grow from 502,000 this year to 534,400 in 2009, a 2 percent a year increase (on average) that outpaces the statewide growth.

Sean M. Snaith, director of the institute, said Wednesday the Florida housing market, which was driving much of the state’s economy, has cooled.

“Florida’s current expansion is a marathon and not a sprint; and you can’t run four-minute miles in a marathon. The all-out dash fueled by the housing sector was not a sustainable path for the economy and will leave the economy catching its breath in 2007. Some may see this deceleration as the beginning of the end of this economic expansion; I see it as a sign that it has become sustainable,” he said.

Snaith said he never liked descriptions of the state’s housing market as a bubble, which makes it sound speculative. All things considered, Florida mortgage demand has remained high enough this year to put 2006 on pace for one of the best years ever in terms of sales, even if numbers are down a bit from the past two years.

He prefers the metaphor of a souffle, which he says rose fast and is about to cool down just as quickly. Housing starts peaked in 2005 and will fall off from 2006 to 2009 as Florida mortgage loan rates rise to around 7.25 percent by 2009, according to the UCF study. The level of housing starts for 2009 will still be 30,000 more than in 1999, according to the report.