Panhandle, West Florida Housing Market Buck Trend
Home building posted a small gain in April in America, while permits for future construction plunged by the largest amount in 17 years, a sign the nation’s housing industry is still in a deep slump.
However, the North Florida real estate market bucked that trend.
In the U.S., construction of new homes and apartments rose to a seasonally adjusted annual rate of 1.528 million units in April, an increase of 2.5 percent from the March level.
In Santa Rosa and Escambia County, however, permits for single-family homes were up from a year ago. Combined, there were 149 single-family permits in April last year for the two-county area, compared to 183 last month - an increase of 22 percent.
Florida mortgage activity is still up in the region, which didn’t see the incredible run-up in sales from 2001-05 like other parts of the state.
“I’ve always believed that our area in particular doesn’t get impacted as much as other areas of the state and nation,” said David Peaden, executive director of the Home Builders Association of West Florida.
“Florida will continue to be a growth state.”
Some factors remain a hurdle for the new home market locally, Peaden said.
Among those: growing uncertainty about property taxes and insurance, and an increasing amount of inventory on the market.
Peaden said there are about 4,800 residential homes on the market, in the two counties, excluding mobile homes and beach condos. That compares to about 3,300 before Hurricane Ivan hit in 2004.
From January 1-May 15, there were 85 homes listed in the $100,000-$150,000 range and 49 of those sold, Peaden said. In the $150,000-$200,000 range, 109 homes sold out of 181 listings.
Nationally, home construction is 25.9 percent lower than a year ago, a precipitous drop reflecting the slide since a five-year boom in housing ended last year.
In a troubling sign for the future, home builders nationwide cut their requests for new construction permits by 8.9 percent in April.
That was the sharpest drop since a 24-percent fall in February 1990, when housing was going through a significant downturn.
The slide pushed the annual rate for building permits down to 1.429 million units, the lowest level in nearly 10 years.
While the April increase in actual construction was the third consecutive advance, analysts said the far more telling figure was the steep slide in permits, given that they are viewed as a far better indicator of where the Florida housing market is headed.
“The drop in permits is one of the biggest on record. It suggests the contraction is housing is not over and has some months to play out,” said Bill Hampel, chief economist for the Credit Union National Association.
On Wall Street, the Dow Jones industrial average shrugged off the worrisome news on housing and bad credit Florida mortgage turmoil to surge higher, climbing by 103.69 points to close at 13,487.53, a record close.
Housing, which had enjoyed record sales in both new and existing homes for five straight years, saw the boom end in 2006 with many formerly red-hot sales areas suffering big declines in sales and home prices.
This despite Florida mortgage rates, which remain near record lows.
SOURCE: Pensacola News-Journal
