Pensacola Housing Market Still Struggling
Bill Campbell has a stark, simple business plan for 2007:
Survive what he calls a “perfect storm” of record high gas prices, soaring insurance rates and property taxes.
Like thousands of other Florida mortgage holders, Campbell’s insurance and taxes at his Miles Furniture store in Pensacola jumped 50 percent this past year and have hit his bottom line hard.
His first-quarter numbers at Miles are near what they were in 2006, but he said last year was not an especially good sales year.
Moreover, his business is tied directly to how well the North Florida housing market is performing. And sales are in a prolonged slump.
For Campbell and many other business owners, large and small, it’s no secret Pensacola is slogging through an economic slump.
Weighed down by a lukewarm Pensacola housing market, the Pensacola area economy is nevertheless starting to show encouraging signs.
The Florida Department of Revenue’s taxable retail sales totals for March indicate a rebound in some economic sectors.
The $502 million in sales registered in March in the Pensacola metro area is about 4.7 percent below the $527 million for the same period last year and 11 percent below the 2005 same-month record of $562 million.
But 2005 sales were fueled by post-Hurricane Ivan spending, which in some areas also spilled into 2006, so a better comparison might be 2004’s sales of $438 million. By that 2004-2007 comparison, sales were up 15 percent in March.
“On net, I’m pleasantly surprised,” said Rick Harper, an economist at the University of West Florida. “I was expecting a slower performance for the Pensacola economy, especially in consumer spending.”
The category of retail sales called consumer “non-durables” - cosmetics, food, cleaning products, office supplies, clothing, footwear and most services - clearly was March’s bright spot.
It was the only major category of six to show positive growth over the first quarter of this year, a period that saw Florida home loan demand tumble throughout the state and this area in particular.
“I think the message is reassuring,” Harper said of the March numbers.
“If you look at total taxable sales, you’ll see that they’ve stopped declining from the post-hurricane highs. Consumer non-durables are off to a healthy direction, and we’re starting to see some growth in tourism.”
Rising fuel prices, and a host of other economic worries, in addition to Florida mortgage payments, including insurance and property taxes, are worrying local businesses and keeping buyers on the sidelines.
Indeed, impressive is not a word that is often used to describe this portion of the West Florida housing market.
The Escambia County-Santa Rosa County housing market is bedeviled by a record number of inventory for sale, stubbornly high asking prices and property tax and insurance issues.
But homes are selling, especially homes priced at market, said Doug Gooch, president of the Pensacola Association of Realtors.
“Houses priced at market are moving,” Gooch said. “If the pricing is right, that’s the key. We still have value in the Pensacola area when compared with the Florida housing market.”
Gooch said he is encouraged that the actual number of home sales is getting back to pre-Ivan levels.
For example, 439 homes sold in the two-county area in March, compared with 481 in March 2004, some six months before Ivan hit the Gulf Coast.
Gooch said the Pensacola area was in a housing boom before Ivan struck, and the storm damage actually accelerated the end of that boom.
In April 2005, when Florida home mortgage demand and the housing market were at or near their peak, Gooch said 675 homes sold.
But the current inventory of homes for sale - about 7,100 - remains high and actually has been climbing for the past several months.
Veteran Realtor Alexis Bolin said inventory “is responsible for the declining prices as we have an over supply and less demand. The only way this market is going to change is for the inventory to be depleted, which isn’t happening any time soon.”
Bolin said she expects national housing prices to continue to decline into 2009 and that the Pensacola area prices appear to be falling about 1 percent per month.
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