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Economic indicators paint bleak picture for S.W. Florida

By Staff | Nov 28, 2008

Due to my chosen profession, I have a tendency to view the world through a real estate-tinted lens. But because that lens has become so clouded over the last year, I’ve sought other ways to measure how our market actually is faring. Recently, the Regional Economic Research Institute (RERI) has been a tremendous source of pertinent information, thanks to the various studies it conducts.

I have been fortunate to discover a couple of them, including “Southwest Florida Regional Economic Indicators,” which discusses the state of the local economy. It was published last month by RERI Director Dr. Gary Jackson and economist Carol Sweeney, with assistance from the Southwest Florida Regional Planning Council and the economic development organizations of Charlotte, Collier and Lee counties, as well as their respective county and city permitting offices.

Collectively culling and disseminating such data is the only way to know how to forge a path to prosperity in Southwest Florida. But the road to regional economic development could be a rocky one, at least in the near term, based on the latest area facts and figures.

The report identifies and examines a handful of indicators that best illustrate the impact of the local economic slowdown. Among them: a decline in airport passenger traffic, retail sales and building permits. Although it shows that single-family homes sales are on the rise – a fact that was underscored in bold in October – the reason behind the increase in activity (tanking home prices) isn’t mentioned. Nonetheless, RERI has done a commendable job of tracking our area’s most revealing economic indicators.

Airport Activity

“Activity” is defined as the number of arrivals and departures at the area’s three main airports. The 2008 passenger activity at Regional Southwest Florida (RSW) airport in Lee County peaked in March at 1,030,151 as expected, but has fallen ever since. The August 2008 passenger level was 448,667, down year over year by approximately eight percent. This reflects not only the slowdown in the regional and national economy, but the impact of higher fuel and ticket prices.

While Sarasota (SRQ) passenger activity was 97,760 in August 2008 (approximately two percent lower than the year before), activity at Naples Airport (APF) plummeted to 149 from 2,527 in August 2007.

Single-Family

Building Permits

As of September, permitting in Lee County remained sluggish. It fell from 65 in August to 55 permits, down 121 year over year. Single-family permits for Collier County increased, from 40 in August to 56 permits in September. This compares to the county’s total of 65 permits pulled in September 2007. In Charlotte County, permitting rose from 27 in August to 33 in September.

Taxable Sales

Issued by the Florida Department of Revenue, these figures track consumer spending. However, because data collection tends to lag behind other economic indicators, July was the latest month available for monthly and annual comparisons.

Each of Southwest Florida’s five counties saw month-to-month taxable sales fall from June to July this year. The reductions began in December 2006 and grew more negative beginning in April 2007. Lee County’s year-to-year taxable sales declined 17.6 percent from July 2007 to July 2008. For the same period, Collier’s taxable sales declined 16.8 percent and Charlotte’s fell a whopping 29.2 percent. Meanwhile, Hendry and Glades counties reported a decrease in taxable sales in the 21-22+ percent range.

Unemployment

Southwest Florida in particular has been hit hard due to its dependence on housing and construction. According to the report, unemployment from August to September this year rose slightly in two of the area’s five counties to 9.5 percent in Charlotte and 9.2 percent in Lee, although modest .1 – .3 percent declines were posted for Collier (8.4 percent), Glades (8.2 percent) and Hendry (14.1 percent).

Overall, the latest year-to-year figures also are rather grim. For example, Lee’s October 2008 rate was 9.5 percent vs. 5.7 percent in 2007; Charlotte’s was 9.6 percent vs. 5.5 percent for the same period. And although unemployment in Collier fell for the second month in a row to 8.2 percent (vs. 8.4 percent in September), it is sharply higher vs. October 2007’s 5.5 percent.

Florida’s jobless rate was seven percent, up from 6.6 percent in September and 4.3 percent a year ago. Unemployment rates above five percent reflect cyclical unemployment and economic slowdown vs. long-term trends.

Home Sales and Prices

The number of existing single-family homes sold by Realtors this year in August vs. July rose in Collier, but fell in Lee and Charlotte counties. Month-over-month sales in Lee County fell to 684 from 768, while the median sales price also fell from $154,900 to $146,900. Charlotte sales fell from 200 in July to 176 in August, with the median price decreasing from $141,800 to $138,100. While Collier sales were up from 188 to 195, the median price fell from $302,000 to $260,000.

The downward trend continues in Lee County, according to figures released this week by the Florida Association of Realtors. (Updates for Charlotte and Collier counties were not available at press time.) The latest numbers reveal that the price of an existing single-family home in Lee dropped two percent between September and October to $139,500. Sales volume was down as well, falling three percent to 720. The silver lining: that number represents a 44 percent increase over last October’s 405 existing home sales.

While the jump in volume may not herald a market rally, it certainly signifies accelerated absorption of our area’s excess housing inventory. And at this point, I’ll translate any encouraging news as an indication that our area’s economic recovery might be just around the corner. I’ll be watching for additional statistical evidence in the coming months and promise to keep you posted.

Gary Tasman is executive director of Cushman & Wakefield’s Southwest Florida office. For more information, please contact him at (239) 489-3600 or gary.tasman@cushwake.com.