Data Shows Central Florida Housing Market Still Stepping On the Brakes
The torrid growth of the Central Florida real estate market has slowed.
The net increase in residents in the region fell by more than 20,000 last summer.
The slower growth - up only 2.8 percent from 2005 to 2006 - mirrors a statewide shift but doesn’t necessarily signal the start of a downward spiral.
Instead, it’s more a return to normal.
The breakneck surge of people moving to Florida that saw local numbers jump by more than 3 percent a year in 2004 and 2005 could not last forever, say experts such as University of Central Florida economist Sean Snaith.
“Before, we had been a black hole of net migration,” said Snaith, director of the Institute for Economic Competitiveness at UCF.
“People moved in until they died. But in the future, I think we will see a more complex picture, with some people packing up their home equity and moving to other locations.”
Still, all of the region’s seven counties added some population between July 2005 and July 2006, fueled by record low Florida mortgage costs and steady economic growth.
Central Florida grew by roughly 87,500 people in that period, compared with peak increases hovering at about 100,000 people for each of the previous two years, when the real estate market was booming.
The counties that already had the most population, Orange and Seminole, saw decreased growth rates. Brevard County, Lake and Volusia also gained fewer residents than they had the year before. Bucking the trend: Osceola and Polk continued to attract slightly more people.
Overall, the Central Florida housing market expanded by more than half a million since 2000, to more than 3.5 million as of last year. Florida’s population surpassed the 18 million mark.
Local officials said they were not concerned with the population growth slowdown, partly because the reduced numbers are still above the increases at the beginning of the decade.
Volusia County Chairman Frank Bruno said “real estate is more expensive, the property taxes are more expensive, the insurance rates are more expensive” - all contributing to the slight reduction.
But he doesn’t think that modest growth would necessarily be a bad thing in a county struggling with taxes and home insurance problems, and which already absorbed many residents from other parts of Central Florida.
“It gives us a reprieve,” Bruno said. “The infrastructure is not keeping up with the demands of the people who are here.”
In Seminole, the slowdown meant about 5,000 fewer people moved into the county, curtailing development and lowering school enrollment.
But the 1.4 percent growth was much closer to the norm, said Bill McDermott, economic-development director.
The continued torrid growth in the Osceola and Polk County housing market may have to do with the availability of more affordable housing, he said.
Seminole’s median home price in 2006 was one of the highest in the region at $271,000, making Florida home mortgage payments rival Southern Florida, according to the Metro Orlando Economic Development Commission.
“One complaint I’ve heard is that companies are having a difficult time recruiting people to work because they can’t find affordable housing in Seminole County,” he said.
“When I hear that, that’s not good news. That’s really not good news.”
When Orange County schools counted students at the beginning of the current school year, said pupil assignment director Sandy Simpson, the number had actually declined by more than 400 students.
That’s still a drop in a bucket in a district that is 22,000 students over capacity.
“This has been a very difficult year to make enrollment projections,” Simpson said. “It’s hard to know if this year has been an anomaly.”
Orlando, Frey said, “is still a part of the country that is on a growth wave.”
If it’s any indication, home builders say they are optimistic that their sales were on the up and up last month, though they complain about the combined effect of taxes, insurance and impact fees.
SOURCE: Orlando Sentinel
