Jon Brock was sure that Polk County’s rental home market would take off, just like property values did nearly two years ago. (more…)

The first Polk County Workforce Housing Summit is right around the corner, according to the Lakeland Ledger. (more…)

Home prices in Polk County have gone negative.

For the first time since the housing boom began in 2005, Polk’s median home prices decreased 5 percent from March 2007 to March 2006: $178,300 to $168,300.

(more…)

A glut of new home inventory continues to bog down the Polk County housing market.

(more…)

The face of the Polk County housing market is changing.

Before too long, Polk County’s Interstate 4 corridor is expected to merge into the sprawls of Tampa and Orlando, creating a giant megapolitan area.

(more…)

Looking for a moderately-priced Florida mortgage?

Look to the Polk County housing market, which continues to lead the state when it comes to the number of affordable, manufactured homes.

(more…)

The year started off the way 2006 ended in Polk County.

That meant declines in the Central Florida housing market but yet another strong performance in the region’s job market, according to The Lakeland Ledger’s monthly Polk County Business Barometer.

The county logged just 249 permits for new home construction in the month of January, plunging 76 percent from 1,039 in January 2006.

It was the lowest monthly permit total since March 2001, according to records kept by The Ledger, reflecting just how far Florida mortgage activity has fallen off since the boom of 2001-2005.

“I think the permits are still being distorted by that rush home builders had to beat the implementation of the higher impact fees,” said a local economics professor, Carl Brown, referring to the local flurry of permitting activity starting in late 2005.

But Brown, of Florida Southern College, was quick to point out that last year’s elevated home construction activity led to a glut of inventory, which has dragged on home sales.

In fact, Polk County’s existing home sales totaled 282 in January, down 30 percent from 403 the year before. That figure was the lowest total since January 2002, according to Ledger records.

Lakeland’s 162 homes fell 31 percent from the previous year’s 236, while East Polk had 116 homes sold, down 28 percent from 161. Bartow had four homes sold, compared with six last year.

Despite those declines, Lakeland Realtor Brooks Chandler noted that the softer market has helped temper prices for potential buyers, who still enjoy the benefit of low Florida home mortgage rates.

In the job market, Polk County recorded a 3.6 percent unemployment rate for January, up from 3.5 percent the year before, and 3.1 percent in December.

The county also added some 5,200 jobs from the previous fiscal year, with the most growth occurring in professional and business services industries, as well as education and health services, and local government.

Polk County economist Gordon Kettle said the uptick in the county’s jobless rate likely signals an upcoming economic slowdown of sorts, but called the data “quite favorable” overall.

Taxable retail sales were $649.8 million in November 2006, the most recent month available from the Florida Department of Revenue. November’s figure reflects a decline of about 3.5 percent from $673 million in 2005.

The decline in retail sales, coupled with a lag in housing sales and slow Florida mortgage loan demand, also suggests a slowdown, economists predict.

Two years ago, Polk County housing market was a seller’s dream.

Realtors couldn’t keep inventory, buyers were snapping up two houses at a time and the good times were rolling.

Then along came 2006.

Flat prices, an abundance of unsold new homes and incomes that struggled to keep up with the rise in home prices led to some of the poorest monthly showings on record when it came to Florida home mortgage activity.

So what’s the future hold? More struggles for about two years - and then a turn in 2009.

“Polk County’s economy will grow through 2009,” Hank Fishkind, owner and economist of Fishkind & Associates in Orlando, will report this week when he releases a two-year projection that he authored. Fishkind partnered with the Attorneys’ Title Insurance Fund to create the look at local real estate markets in Florida.

“With excess inventory in the housing stock, future growth is expected to slow as household formation declines and existing inventories are sold,” Fishkind reports. “This trend is expected to continue forward through 2008. By 2009, inventories of housing units are expected to increase.”

Inside Polk County

Polk County had a peak year for growth in 2005: More than 11,000 building permits were issued and nearly 6,600 existing homes were sold.

But 2006 fell flat. Home sales have fallen 21percent to about 5,200 and permits dropped nearly 43percent to about 6,500 last year.

“Closing volumes are expected to slip in 2007 and the housing market peaks in response to higher [Florida mortgage interest rates] and a lower formation of households,” Fishkind’s report said. “However, closings are expected to increase steadily through 2009 as the market re-equilibrates.

“Pricing will be relatively flat for the balance of 2006, 2007 and 2008. It will take this much time for incomes to catch up to the recent sharp run up in home prices. Prices will not rise appreciably until 2009.”

Future of this Florida housing market

While many experts agree on the problems facing the local, state and national market, the time for a rebound differs.

“We still have stuff going on,” said Dean Saunders, owner and Florida mortgage broker of Coldwell Banker Commercial Saunders Real Estate in Lakeland. “Things are still moving pretty well. I think what happened was that we underestimated the number of speculators in the market.”

Speculators, buyers who have no intention of living in a home or keeping a property for a substantial amount of time, purchased property throughout the state, all in the hopes of making a quick buck. But the investments and fast purchasing drove up market prices, causing a frenzy in both commercial and residential real estate circles.

It meant skyrocketing prices and overbuilding of properties.

But for the Florida housing market to make a full rebound, home inventories need to be cleared out, experts say.

“It is all going to be dependant on the absorption rate,” said Grant Thrall, a professor of geography at University of Florida, referring to the existing home inventories in Polk. “There’s not a lot of new construction going on.”

Thrall predicted the market to rebound in 12 to 18 months when buying begins again.

It was a lack of consumer confidence and a rise in affiliate home costs, such as property taxes and homeowners insurance, that brought the market to a near standstill, Thrall said.

“I think it will be overcome,” he said. “It (investing in a home) is a good thing to do. It is a good and safe place for your life savings. It’s a good time to buy and will be for the next two years. And if they are waiting for it to go down more (in price), they are just going to miss it. The market is going to go up.”

The Lakeland, Fla., area economy endured a sluggish month in June as the housing market posted declines and the jobless rate increased slightly, according to The Ledger.

Realtors across Polk County sold 554 existing homes in June, a drop of 16.3 percent from a record 662 in June 2005. Sales in Lakeland fell 10.5 percent to 366, while East Polk County sales dropped nearly 27 percent to 177. In Bartow, 11 homes were sold in June, unchanged from the previous year.

The reason? As we’ve discussed at length regarding markets in South Florida, it can be traced to a combination of higher home prices and more expensive Florida home loan payments, coupled with rising insurance premiums and property taxes.

“Higher mortgage rates are finally starting to cut into the housing market. I think it’s not an unexpected slowdown,” said Kevin Brickey, an economist with the Hillsborough County Office of Management and Budget.

Although a lull in sales was expected after last year’s record performance, continued decreases in new home sales could start to affect employment in the construction industry. In June, Polk builders pulled 571 permits, a 49 percent drop from 1,119 last year. The June 2005 total was Polk’s fourth-highest on record.

The area labor market posted a 3.4 percent jobless rate in June, down from 4.2 percent the year before but up from 3.0 percent in May. Polk County normally sees a summer rise in unemployment as tourism- and agriculture-based industries dump jobs, said Carl Brown, an economics professor at Florida Southern College in Lakeland.

In addition, Polk County posted more than $10.1 million in tourism revenue in May, the most recent monthly figuresw available from the County Tax Collector’s Office. May’s total, which includes hotel and vacation rentals, was up 3.5 percent from $9.8 million the year before.

Taxable retail sales totaled more than $707 million in April, the most recent month available from the Florida Department of Revenue. April’s total was an increse of roughly 6 percent from the year prior. Only time will tell if these trends continue, but experts are optimistic that a major market crash is not on the horizon. Check out the attached graph for a visual on how this particular segment of the Central Florida housing market is doing.

Real estate signs in Polk County may not be frozen over yet, but potential buyers would have difficulty seeing smoke rising from this formerly hot housing market. Home sales in the area dropped six percent last month from their total of 627 over the same period in 2005.

Based on figures from The Ledger, this total includes existing duplexes, condos, coops, manufactured and mobile homes, modular, single-family and townhomes, as well as new home sales by Realtors.

As sales dipped, prices rose - never the best indication for those on the lookout for an affordable Florida home loan. The median price for homes in the Lakeland and Winter Haven market jumped 43 percent - from $123,700 in March 2005 to $176,300 last month.

Lakeland Realtors had 350 home sales in March, down about 7 percent from 377 a year ago.

“The market is definitely soft,” said Beverly Page, a Realtor with Coldwell Banker Residential Real Estate in Lakeland. “We have an overabundance of listings that weren’t there last year.”

East Polk recorded 223 home sales, down 7 percent from 237. Bartow’s sales rose from 13 homes in March 2005 to 19 last month, an increase of about 46 percent.

“It’s bound to level off at some time,” said Matt Schreier, real estate broker for Garden Grove Realty in Winter Haven. “But what we are seeing is that new construction permits are up and resales are down. We are competing against developers who have inventories that are sitting.”

Those developers are able to give special deals, like covering closing costs, to attract more buyers, he said.

The trend in Polk County follows that around the state and nation. In Florida, sales of single-family existing homes totaled 18,881 in March, compared with 24,091 homes sold a year ago, for a 22 percent decrease. There are various views on this housing market decline.

“We may see some minor slowing in home sales as interest rates rise, but the market clearly is stabilizing,” David Lereah, chief economist for the National Association of Realtors, said in a written statement. “We now see appreciation cooling to single-digit rates of price growth, another sign that the market is normalizing.”

Foreclosures have also been on the rise, as those with an adjustable rate mortgage are feeling the interest rate crunch. It’s not an ideal time to possess a Florida home loan, but a soft landing is expected throughout the market.