Jacksonville Housing Market: Trouble Brewing?
The forecast for Jacksonville, economically speaking, has been pretty sunny for years. But lately, some clouds have been forming on the horizon.
The unemployment rate for the Jacksonville housing market reached a two-year high in July, and a slump in real estate has helped send local stock prices down. And after several years of relatively nonexistent inflation, rising gasoline and other prices have caused a jump in local inflation.
So are we headed for a slowdown?
“The clearest thing is the economy is changing gears from a rapid pace to a slowing,” said John Godfrey, chief economist at Florida Economic Associates in Jacksonville.
Not all the indicators are negative.
While the unemployment rate has risen this summer, Jacksonville has kept on adding jobs. In the 12 months through July, Jacksonville-area companies added 15,100 employees to their payrolls, a 2.4 percent growth rate, according to the Florida Agency for Workforce Innovation.
But University of North Florida economist Paul Mason is concerned that the economic indicators are pointing to tougher times ahead.
“I’m not really optimistic,” said Mason, who heads UNF’s Local Economic Indicators Project. “I’m afraid we’re going to see a series of layoffs.”
In fact, there has been a 60 percent decline in the value of residential building permits issued in Duval County from July 2006 ($167.2 million) to July 2007 ($66.3 million).
The weakening of housing markets, illustrated by the decline in building permits, has ripple effects that go way beyond the buying homes.
“Current [economic] expansion was fueled to a great extent by the housing sector,” said Asha Bangalore, economist at Northern Trust in Chicago.
“In this expansion, housing and housing-related employment made a very big contribution to payroll growth,” she said.
Using national employment data, Bangalore found that the housing market added 788,300 jobs to U.S. payrolls from November 2001 through April 2005, or 40 percent of all jobs created in the U.S.
Those jobs came not only from construction but also from industries such as Florida mortgage banking and furniture, which get a lot more activity as more homes are sold.
But the downturn in the housing industry in the past year has caused a loss of 119,400 jobs, Bangalore said.
A good example is the Jacksonville-based title insurance company, Fidelity National Financial Inc., which said in July that it has cut more than 6,000 jobs since 2003 as demand for its title services lessened.
SOURCE: Florida Times-Union
