ORLANDO, Fla. – Jan. 22, 2015 – "Has Florida found the secret to saving the economy?" That May 2014 headline in The Wall Street Journal shows how far the state has come since 2007 and points to a bright future in 2015, according to Florida Department of Economic Opportunity Executive Director Jesse Panuccio.
Panuccio was one of the business and economic leaders who spoke to Realtors® from across Florida Wednesday at Florida Realtors 2015 Economic Summit, which kicked off the association's Mid-Winter Business Meetings at the Renaissance Orlando Resort at SeaWorld. Other featured speakers included Ted Jones, chief economist and senior vice president for Stewart Title Guaranty Company; and Dr. Brad O'Connor, economist and director of economic research for Florida Realtors.
"Things have changed quite remarkably for this state," Panuccio said. "The U.S. Census recently announced that Florida has officially become the third most populous state … about 800 people move to the state each day now. Why are they moving here? We're a destination state again – people feel they can make a future here, and that's good for Florida, the economy and the real estate industry."
Over the past year, Florida's private sector growth rate was 3.4 percent, second only to Texas among the largest states, Panuccio noted. The economic recovery has been broad-based across all industries, and job growth has been consistent across every region.
"Our labor force is growing over four times faster than the national labor force (over the past year)," he said. "Of the 10 largest states, we are the fastest-growing labor force in the country." In November 2014, Florida's unemployment rate was 5.8 percent.
Looking at the national economy as well as Florida's economic future, Ted Jones said he is "bullish on what's ahead for 2015." Why? He pointed to several current positive factors: more jobs than anytime in the history of the U.S.; 58 percent of new jobs pay more; mortgage interest rates, while rising, remain highly affordable; significant demographic demand – think millennials; and continued strong population growth.
Jobs remain key, Jones said. "There were 2.95 million total jobs added in the U.S. over the last 12 months. To beat that growth period, you'd have to go back to 1999. We created 246,000 jobs in each month of the last 12 months. Here in Florida, we expect between 2.2 to 2.4 percent total job growth in the next year. I'm trying to tell y'all you're setting yourself up for a great year next year."
Jones added that a major plus for Florida's future is that the state has the 5th best business climate in the nation, according to a recent tax comparison study conducted by the Tax Foundation.
Florida's housing sector
Florida Realtors' statewide housing data indicates that the market is now growing along "normal" trend lines, according to Dr. Brad O'Connor, meaning that the pace of sales, median sales price increases and other statistics show moderate, sustainable growth.
"For the first time in a couple of years, we're seeing new listings outpace sales," he said. "Months supply has returned to hover between 5 to 6 months, which historically we say is a 'balanced' market. In 2013, we saw rapid price increases; in 2014, we saw a return to more historic levels of 4 to 5 percent price increases. Investor participation has started to decline again, slightly. However, as house prices have gone down, rents have gone up, so some of these investment properties remain attractive to rent out."
According to O'Connor, Florida's Realtors should keep these considerations in mind for 2015:
- Sales growth has slowed but remains positive (expect to see about 10 percent growth)
- New listings outpaced sales enough to bring inventories back into balance
- Growth in home values has returned to historical rates
- Investor participation is starting to decline (slightly)
- New construction is back, but only in some areas
- International sales remain robust
- Shadow inventory continues to decline