Existing-home sales in Volusia County and Flagler County fell 29 percent in June compared with the same month a year ago, with the median sales price dropping 10 percent to $197,100. (more…)
Terri Ossi tried to sell her Ormond beachside home for $349,000 but only one person came by to take a look in three months. So she decided the asking price could drop $14,000 - with some incentives. (more…)
The number of permits for new single-family homes in Volusia County during the first quarter of 2007 fell nearly 45 percent from 12 months ago, according to a new report issued on U.S. housing markets. (more…)
After a two-year hiatus, developers are ready to once again start building large affordable housing projects in Volusia County. (more…)
Perhaps, the Daytona Beach News-Journal surmises, state legislators wrestling with how to revamp the property tax system should spend some time with Linda Fitzgibbons.
Home prices finally are dropping as sellers face the fact that it’s a buyer’s market in Flagler and Volusia County.
As the Florida real estate slowdown began tightening its grip on the local economy last summer, average wages in Flagler County dropped below $29,000, a 9.2 percent slide from the mid-2005 level, the state reported Monday.
Volusia County, meanwhile, moved above Flagler on the wage ladder, posting a 4.5 percent increase that pushed its average up to $30,192.
However, Volusia County’s figures showed a $576 decline from the annualized wage levels of last spring.
Economic development officials in both counties said they hadn’t analysed the figures released Monday by the state Agency for Workforce Development.
However, they said they were struck by the large number of good-paying jobs in real estate and Florida mortgage lending that had evaporated.
Flagler County, heavily dependent on home builders, construction and sales for its economic livelihood, serves as a coal miner’s canary for Volusia County, said Rick Michael, Volusia’s director of economic development.
“Flagler’s economy is so based on housing that we watch the Flagler market as a pre-warning of the Volusia County market,” Michael said.
Michael said his staff has been analyzing employment declines that have occurred since January.
He estimated Volusia’s workforce of 254,000 has shed about 5,000. Jobless figures, which had been hovering around 7,300 last year, rose to 9,200.
“We were surprised by the loss of 400-500 jobs in business and professional services,” Michael said. “We had been growing in that area every month.”
Michael said the cutback partly reflected the closing of Florida home mortgage offices and other reductions in financial services.
Flagler’s construction industry has lost about 150 jobs, slipping below 2,000, said Sharon Warriner, spokesman for the Workforce Development Board of Flagler and Volusia.
More significant, she said, was the “huge” cutback in the real estate and Florida mortgage loan industries, shrinking from nearly 2,000 workers in September of 2005 to 532 the following summer.
Overall, an average of 18,499 people were employed in Flagler County last summer, a decline of 254 jobs, or 1.3 percent, from the employment level a year earlier. Volusia’s employment averaged 165,068 last summer, or 1.3 percent more than the 162,899 at work the previous year.
SOURCE: Daytona Beach News-Journal
New home construction plunged 47 percent last year in Volusia and Flagler counties, dropping off even more toward the close of the year, a research firm reported this week.
Some home builders voiced cautious optimism that business has started to show signs of improvement lately, but a bank economist warned the decline is likely to continue through 2007, according to the Daytona Beach News-Journal.
Last year, building permits were issued for 5,707 new homes and apartments in Volusia and Flagler County, down from the 10,858 total issued in 2005, according to Hanley Wood, a Costa Mesa, Calif., firm that monitors local housing markets around the nation.
The slowdown worsened during the October-December time period. During that quarter, only 904 building permits were issued locally, or 63 percent fewer than the 2,414 issued during the same period of 2005, reflecting a major drop-off in the demand for Florida mortgages.
If any consolation could be taken from these numbers, it was the “hotness” rating that Hanley Wood gave the Volusia-Flagler area. Measuring the number of permits issued per 1,000 of population, the firm said the area’s rate of 9.6 per 1,000 was “hotter” than the national rate of 6.1 permits per 1,000.
It also was above the 8.4 average rate elsewhere in the South. But last year’s “hot” felt decidedly lukewarm or cool to many in the industry, as Florida mortgage demand and real estate activity overall remained slow.
“We still have a lot of inventory to clear out,” said Sue Darden, executive director of the Volusia Home Builders Association. “I hear inklings that the [Florida housing market] is starting to turn around, but we all know it’s never going back to what we had in 2005. The recovery is going to be slower than what we’re accustomed to.”
Stan Janzen, president-elect of the builders group, said he’s encouraged by a recent pick-up in the number of people making inquiries about new homes in Flagler and Volusia County.
“There seems to be a rebound in traffic, both from the tourists and from the locals. But it’s going to take a while before the market improves,” he said.
At the University of Florida, the Bergstrom Center for Real Estate Studies surveyed more than 300 real estate professionals throughout the state in the month of January and found a large increase in optimism since last fall.
The quarterly survey, scheduled for release later this week, suggests that “maybe we have bottomed out, and things are not heading in any worse direction, at least for the single-family market,” said Wayne Archer, center director. “For condos, though, it’s more volatile.”
However, Mark Vitner, a Wachovia Bank economist, said he expects for local construction to continue shrinking throughout 2007, even as Florida mortgage loan rates remain relatively low.
“Prices are no longer rising, so buyers don’t feel pressured to make a decision right away,” Vitner said. “They feel they can wait 6-9 months, and prices will be the same, if not lower.”
Mark Soskin, a University of Central Florida economist who has done ample consulting work for local home builders, said that younger builders don’t realize how precarious their industry is right now because they haven’t experienced a full-fledged recession.
“People need to be aware this thing could get a heck of a lot worse,” Soskin said.
The economy of Volusia County is expected to exceed the state’s average, bolstered by rising population and low unemployment rates, according to economic forecasters at the University of Central Florida.
But there are two sides to every story. The average wage for the Volusia County (also known as the Deltona-Daytona Beach-Ormond Beach metropolitan area) will continue to remain near the bottom of the 12 areas studied by UCF’s Institute for Economic Competitiveness.
Volusia’s average unemployment rate will continue to hover just below the state’s expected 3.2 percent unemployment rate for the next three years, according to the quarterly state and regional forecast by the UCF institute. Flagler County was not included in the report.
Overall, the Florida economy will continue to see economic growth from 2006 to 2009, with Volusia expected to rank in the top half of the state in employment and personal income growth, according to the report.
The UCF report predicts the county’s population will grow from 502,000 this year to 534,400 in 2009, a 2 percent a year increase (on average) that outpaces the statewide growth.
Sean M. Snaith, director of the institute, said Wednesday the Florida housing market, which was driving much of the state’s economy, has cooled.
“Florida’s current expansion is a marathon and not a sprint; and you can’t run four-minute miles in a marathon. The all-out dash fueled by the housing sector was not a sustainable path for the economy and will leave the economy catching its breath in 2007. Some may see this deceleration as the beginning of the end of this economic expansion; I see it as a sign that it has become sustainable,” he said.
Snaith said he never liked descriptions of the state’s housing market as a bubble, which makes it sound speculative. All things considered, Florida mortgage demand has remained high enough this year to put 2006 on pace for one of the best years ever in terms of sales, even if numbers are down a bit from the past two years.
He prefers the metaphor of a souffle, which he says rose fast and is about to cool down just as quickly. Housing starts peaked in 2005 and will fall off from 2006 to 2009 as Florida mortgage loan rates rise to around 7.25 percent by 2009, according to the UCF study. The level of housing starts for 2009 will still be 30,000 more than in 1999, according to the report.
Fewer new homes are being built in the Volusia-Flagler housing market, but commercial real estate projects keep coming out of the ground.
“It’s still a housing boom compared to most of the country, but compared to what we’ve had, it’s a softening of the housing market,” said Rick Michael, director of Volusia County’s economic development department. “On the positive side, strong commercial permitting shows there’s still some good things happening from a business standpoint.”
Michael’s agency recently announced 638 new home permits were issued countywide in the third quarter of the year, slightly more than a third of the 1,814 issued in the same period last year by the county. City and county permitting officials predict less than 3,500 residential permits will be issued for all of 2006, roughly half of the 6,856 issued last year.
During that same third quarter, 49 commercial permits worth $54.1 million were issued by the county and its municipalities. For the first nine months of the year, 198 new commercial and industrial permits worth a combined $204.7 million were issued countywide, up slightly from $192 million posted in the same period in 2005. This at a time when the South Florida housing market is in decline and leaving many observers worried.
“Businesses are still growing, jobs are still going up (in numbers) and the workforce is still increasing. There’s no slowdown in immigration into Volusia County,” Michael said.
It’s a similar tale in Flagler County.
“I don’t have any figures, but I know from working around the area the commercial side has a lot in the pipeline,” said Byron Lalande, business resource specialist at Enterprise Flagler.
Housing construction in both counties has slowed to a crawl because there is so much inventory and many homes remain unsold, said one builder.
“We’ve been overbuilding for a solid 24 months,” said Bob Fitzsimmons, a West Volusia home builder. “Everybody’s inventory has grown, so they’ve got to slow down or stop building until the inventory is absorbed.”
Fitzsimmons cited a monthly report from the University of Florida’s Bureau of Economic and Business Research. In August, the latest figures available, 231 residential building permits were issued in Volusia County, and 78 in Flagler County. A year ago, Volusia recorded 561 residential permits and Flagler logged 388.
The year-to-date numbers aren’t any prettier for residential permits, the report said. Volusia County and its cities issued 2,370 permits the first eight months of this year, versus 3,782 in the same period of 2005. Flagler County and its cities issued 1,339 this year, compared with 2,433 in the same period a year earlier.
“Some of the problem can be placed on flippers and investors, but the building community was stupid drunk with demand and produced more homes than the market could consume. The underlying household creation is still growing 3-4 percent a year, (which is) a solid foundation to the economy,” Fitzsimmons said.
The rise in Florida mortgage rates and cooling of demand has resulted in a downturn that has led to layoffs at many home builders. But some builders are still holding steady, or at least are doing their best to.
KB Home, for instance, doesn’t build unless a buyer is under contract, said spokeswoman Cara Kane, so its inventory of unsold homes is smaller than many other companies.
“KB doesn’t build on speculation, so we have less inventory on hand,” she said.
Still, some buyers walked away from their contracts, so KB does have a few homes without ready buyers, she said.
