Florida Real Estate Blog

University of Florida says Floridians Remain Optimistic About Future

GAINESVILLE, Fla. – Feb. 28, 2012 – Consumer confidence among Floridians dropped one point in February to 76 from January, according to a University of Florida survey. The modest decline followed two months of rising levels of confidence in the economy.

“The pattern of consumer confidence in Florida over the last three months is exactly the same as it was a year ago,” says Chris McCarty, director of UF’s Survey Research Center in the Bureau of Economic and Business Research. “From December 2010 to February 2011, the overall level of confidence went from 70 to 77, then 76 – the same as this year.”

In 2011, however, confidence dropped four points in March. It continued to decline steadily until August as Americans reacted pessimistically to events at home and abroad. McCarty says March numbers will indicate whether the pattern mirrors 2011 or breaks the pattern.

For the moment, however, McCarty sees a few positive events. For example, recent stock market activity reached post-recession highs, lifting the Dow Jones industrial average over 13,000. This rise, McCarty says, tops a “psychological barrier that if passed could lead to increased investment.”

Florida’s unemployment rate in December dropped to 9.9 percent. Most of the new jobs were in trade, transportation and utilities. Home prices, which edged up to an average $134,300 in December, have stabilized since, though they are expected to decline again later in the year if the Florida Legislature approves a bill to speed up foreclosures on 368,000 properties.

Three of the five categories measured by the survey revealed a drop in confidence among respondents in February. For instance, their overall perception of being personally better off financially now than a year ago fell one point to 60. Meanwhile, expectations that personal finances will improve by this time next year dropped three points to 81. In addition, trust in the U.S. economy over the next five years also declined, dropping one point to 82.

Respondents, however, were upbeat in their assessment of whether now is a good time to buy big-ticket items such as a computer or washing machine, registering an increase of confidence, rising three points to 85.

Only one category showed no change. Confidence in the U.S. economy a year from now remains at 75.

While women’s confidence in the economy dipped three points from 76 to 73, men’s rose one point, from 78 to 79. Overall, those under 60 were more positive than their older counterparts.

New concerns could impact attitudes going forward, however. “This year, we have concerns over Syria and Iran, and the overhang of the European debt crisis,” McCarty says. In addition, gas prices, tensions between the U.S. and Iran, the presidential election, the possible expiration of the Bush tax cuts in 2013, a fresh round of budget cuts mandated by Congress, and possible fallout from European economic problems could impact Floridians’ attitudes.

“The sustained level of consumer confidence is welcome news, but it will be interesting to see how consumers react going forward,” McCarty says. “Consumer confidence in March should give us a good indication as to whether we will trend down or hold onto these gains.”

The index used by UF researchers is benchmarked to 1966, which means a value of 100 represents the same level of confidence for that year. The lowest index possible is a 2; the highest is 150. The UF survey was conducted between Feb. 12 and Feb. 23, and reflects the responses of 403 people statewide.

© 2012 Florida Realtors®
Reprinted with permission. Florida Realtors®. All rights reserved.

US Consumer Confidence on the Rise in January 2012

NEW YORK – Feb. 28, 2012 – The Conference Board’s Consumer Confidence Index, which had decreased in January, increased 9.3 points in February. The Index now stands at 70.8, up from 61.5 in January.

The Present Situation Index that gauges consumers’ outlooks about the current economy increased 6.2 points to 45.0 from 38.8. The Expectations Index, which gauges attitudes about the economy six months in the future, rose 11.3 points – to 88.0 from 76.7 in January.

“Consumer confidence, which had declined last month, posted a sizeable improvement in February,” says Lynn Franco, director of The Conference Board Consumer Research Center. “The Index is now close to levels last seen a year ago. Consumers are considerably less pessimistic about current business and labor market conditions than they were in January. And, despite further increases in gas prices, they are more optimistic about the short-term outlook for the economy, job prospects and their financial situation.”

Consumers’ assessment of current conditions
Those claiming business conditions are “good” increased slightly to 13.3 percent from 13.2 percent, while those claiming business conditions are “bad” decreased to 31.2 percent from 38.3 percent. Consumers’ appraisal of the labor market was also less pessimistic. Those stating jobs are “plentiful” increased to 6.6 percent from 6.2 percent, while those saying jobs are “hard to get” decreased to 38.7 percent from 43.3 percent.

Consumers’ assessment six months in the future
The proportion of consumers expecting business conditions to improve over the next six months increased to 18.7 percent from 16.7 percent, while those anticipating business conditions will worsen decreased to 11.8 percent from 14.6 percent. Consumers’ outlook for the labor market was also more upbeat. Those anticipating more jobs in the months ahead increased to 18.7 percent from 16.4 percent, while those anticipating fewer jobs declined to 16.9 percent from 19.1 percent. The proportion of consumers expecting an increase in their incomes improved to 15.4 percent from 13.8 percent.

Nielsen, a global provider of information and analytics, conducts the monthly Consumer Confidence Survey, based on a probability-design random sample, for The Conference Board. The cutoff date for the preliminary results was Feb. 15.

© 2012 Florida Realtors®

 Reprinted with permission. Florida Realtors®. All rights reserved.

House Price Index Rose in November 2012 - Perhaps Some Good News?!?

WASHINGTON – Feb. 23, 2012 – U.S. house prices rose 1.0 percent on a seasonally adjusted basis from October to November 2011, according to the Federal Housing Finance Agency’s monthly House Price Index released today.

The previously reported 0.2 percent decrease in October was revised downward to reflect a 0.7 percent decrease. For the 12 months ending in November, U.S. prices fell 1.8 percent. The U.S. index is now 18.8 percent below its April 2007 peak and the level is roughly the same as the February 2004 index.

The FHFA monthly index is based on transactions involving conforming, conventional mortgages purchased or securitized by Fannie Mae or Freddie Mac. Only mortgage transactions on single-family properties are included. Conforming refers to a mortgage that both meets the underwriting guidelines of Fannie Mae or Freddie Mac and that does not exceed the conforming loan limit. It doesn’t consider mortgages guaranteed by the FHA, VA or other federal government entities. Mortgage transactions on condominiums, cooperatives, multi-unit properties, and planned unit developments are also excluded.

© 2012 Florida Realtors®
Reprinted with permission. Florida Realtors®. All rights reserved.

Average Mortgage Interest Rates Head Upward from Record Low Levels!

Today, 2/23/2012, Freddie Mac reported that the average mortgage interest rate for 30 year fixed-rate mortgages was 3.95%, up from 3.87% last week. The average interest rate for 15 year fixed-rate mortgages was 3.19%, up from 3.16% from last week. A year ago the 30 year rate was 4.95%! At some point interest rates had to start rising again, and this week they did! Not significantly, but buyers should take note and watch further movements VERY carefully. You do not want to get stuck with high interest rates when still historically low rates are still available. A word to the wise is sufficient! Or so they say.

A Freddie Mac spokesperson said, "New data releases this week suggest the housing market is continuing to gradually improve. Loans that were seriously delinquent (90 days or more past due plus the foreclosure inventory) fell to 5.3 percent of prime mortgages at the end of 2011, representing the lowest quarterly share since the start of 2009, according to the Mortgage Bankers Association. The Census Bureau reported new residential construction starts in January outpaced the market consensus forecast, led by condominiums and apartment buildings, and December's figures had upward revisions. Finally, existing home sales were at the strongest pace in January since May 2010, according to the National Association of Realtors®"

To me, that looks like a lot of good news, especially after all of the "doom and gloom" of the past several years. It is quite true that our recovery will be slow, but there will be some parts of the country that will out-pace others in terms of the speed at which they get back on track. Here's hoping that Florida will be one of those pace-setters. There are some signs that this could indeed be true. Time will tell. Fingers crossed here.

Do keep in mind that we are a very large country, So figures that come out for the entire nation, may have little or no relevance for your particular area. In the end, it is best if you speak with a local REALTOR or financing expert to see what the situation is for your part of the United States. Florida is not Michigan, nor is Maine the same as California. Market conditions can be very different from place-to-place. Also, your own credit history, the property you want to buy, etc. will effect your specific loan options and interest rates. Your mortgage broker or bank loan officer can give you more specific information.

If you want to learn more about Freddie Mac or see the details of their survey, go to: www.freddiemac.com and click on the link for "Current Weekly Survey". They break down the survey by specific regions in the United States so you can see how your state compares to other parts of the country. They also explain the mission of Freddie Mac and offer a lot of useful information for consumers.

If you would like to speak with a lender you can find some at my website: www.jelwell.century21bnr.com . You can also speak with your own bank, credit union, or mortgage broker to see what your particular interest rate would be, should you decide to finance a home purchase.

I would also be happy to assist you in any way that I can. Just call JOHN ELWELL - REALTOR at CENTURY 21 Bill Nye Realty, Inc. : 813-783-4444 or e-mail me at: jelwell1@tampabay.rr.com You are also welcome at my webpage: www.jelwell.century21bnr.com  Licensed in Florida.

Positive Housing Signs for Florida Housing Market in January 2012

ORLANDO, Fla. – Feb. 22, 2012 – Florida’s housing market reported gains in median sales prices and a reduced inventory of homes for sale in January, according to the latest housing data released by Florida Realtors®.

“We’re seeing positive signs of a strengthening recovery in Florida’s housing market,” says 2012 Florida Realtors President Summer Greene, regional manager of Better Homes and Gardens Real Estate Florida 1st in Fort Lauderdale. “In both the statewide single-family and condo-townhome markets, pending sales are higher and the statewide median sales price rose – up 5.3 percent to $129,000 for single-family homes and up 18.8 percent to $95,000 for condo-townhomes. Improving the availability of affordable financing to qualified buyers and investors would continue to stabilize Florida’s housing market and economy.”

The median is the midpoint; half the homes sold for more, half for less. Sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes, according to housing industry analysts.

The national median sales price for existing single-family homes in December 2011 was $165,100, which is 2.5 percent below the previous year, according to the National Association of Realtors® (NAR). In California, the statewide median sales price for single-family existing homes in December was $285,920; in Maryland, it was $222,934.

Florida statewide sales of existing single-family homes totaled 12,044 in January 2012, down 5.5 percent compared to the year-ago figure, according to data from Florida Realtors Industry Data and Analysis department and vendor partner 10K Research and Marketing.

Looking at Florida’s year-to-year comparison for sales of condos/townhomes, a total of 5,963 units sold statewide last month, down 22.6 percent from those sold in January 2011. According to NAR, the national median existing condo price in December 2011 was $160,000.

“Even though closed sales are down from a year ago, there are two really bright spots in Florida’s housing market,” said Florida Realtors Chief Economist Dr. John Tuccillo. “One is a significant increase in pending sales. In fact, pending sales have been up every month since May. The barrier that stands between pending sales and closings is the difficulty consumers are experiencing in obtaining financing.

“The second positive is inventories, which are now at a point close to a balanced market,” Tuccillo said. The months supply of inventory stands at 6.4 for both the single-family homes market and the condos/townhomes market.

The interest rate for a 30-year fixed-rate mortgage averaged 3.92 percent in January 2012, down from the 4.76 percent average during the same month a year earlier, according to Freddie Mac.

To see the full statewide housing activity report, go to Florida Realtors Media Center at http://media.floridarealtors.org/ and look under Latest Releases, or download the report under Market Data at: http://media.floridarealtors.org/market-data.

The January 2012 Florida Realtors home sales release marks a new statewide housing market reporting partnership between Florida Realtors Industry Data and Analysis department and a new vendor partner, 10K Research and Marketing. Housing sales data from the state’s 63 local Realtor organizations is collected and organized with the goal of providing unique, localized market reports to the local Realtor boards and associations within Florida Realtors, enabling the groups and their Realtor members to serve as the definitive voice of real estate in their respective local markets.

At the same time, Florida Realtors is providing comprehensive statewide housing market statistics – but this new data series only includes statewide numbers. Beginning with this January 2012 housing data report, Florida Realtors is no longer reporting any market data for Realtor members’ sales in the state’s metropolitan statistical areas, as had previously been reported in partnership with the University of Florida’s Bergstrom Center for Real Estate Studies.

© 2012 Florida Realtors®

Reprinted with permission. Florida Realtors®. All rights reserved.

In US January 2012 Existing Home Sales were UP & Inventory Levels were DOWN

Washington, DC, February 22, 2012 - Existing-home sales rose in January, marking three gains in the past four months, while inventories continued to improve, according to the National Association of Realtors®.

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 4.3 percent to a seasonally adjusted annual rate of 4.57 million in January from a downwardly revised 4.38 million-unit pace in December and are 0.7 percent above a spike to 4.54 million in January 2011.

Lawrence Yun, NAR chief economist, said strong gains in contract activity in recent months show buyers are responding to very favorable market conditions. “The uptrend in home sales is in line with all of the underlying fundamentals – pent-up household formation, record-low mortgage interest rates, bargain home prices, sustained job creation and rising rents.”

Total housing inventory at the end of January fell 0.4 percent to 2.31 million existing homes available for sale, which represents a 6.1-month supply at the current sales pace, down from a 6.4-month supply in December.

“The broad inventory condition can be described as moving into a rough balance, not favoring buyers or sellers,” Yun said. “Foreclosure sales are moving swiftly with ready home buyers and investors competing in nearly all markets. A government proposal to turn bank-owned properties into rentals on a large scale does not appear to be needed at this time.”

Total unsold listed inventory has trended down from a record 4.04 million in July 2007, and is 20.6 percent below a year ago.

NAR President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami, said buying power is enticing more potential home buyers. “Word has been spreading about the record high housing affordability conditions and our members are reporting an increase in foot traffic compared with a year ago,” he said. “With other favorable market factors, these are hopeful indicators leading into the spring home-buying season. We’re cautiously optimistic that an uptrend will continue this year.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was a record low 3.92 percent in January, down from 3.96 percent in December; the rate was 4.76 percent in January 2011; recordkeeping began in 1971.

The national median existing-home price³ for all housing types was $154,700 in January, down 2.0 percent from January 2011. Distressed homes⁴ – foreclosures and short sales which sell at deep discounts – accounted for 35 percent of January sales (22 percent were foreclosures and 13 percent were short sales), up from 32 percent in December; they were 37 percent in January 2011.

“Home buyers over the past three years have had some of the lowest default rates in history,” Yun said. “Entering the market at a low point and buying at discounted prices have greatly helped in that success.”

All-cash sales were unchanged at 31 percent in January; they were 32 percent in January 2011. Investors account for the bulk of cash transactions.

Investors purchased 23 percent of homes in January, up from 21 percent in December; they were 23 percent in January 2011. First-time buyers rose to 33 percent of transactions in January from 31 percent in December; they were 29 percent in January 2011.

Forty-seven percent of NAR members report that contracts settled on time in January; 21 percent had delays and 33 percent experienced contract failures. Contract cancellations are unchanged from December but were only 9 percent in January 2011; they are caused largely by declined mortgage applications and failures in loan underwriting from appraisals coming in below the negotiated price.

Single-family home sales rose 3.8 percent to a seasonally adjusted annual rate of 4.05 million in January from 3.90 million in December, and are 2.3 percent above the 3.96 million-unit pace a year ago. The median existing single-family home price was $154,400 in January, down 2.6 percent from January 2011.

Existing condominium and co-op sales increased 8.3 percent to a seasonally adjusted annual rate of 520,000 in January from 480,000 in December but are 10.3 percent lower than the 580,000-unit level in January 2011. The median existing condo price was $156,600 in January, up 2.0 percent from a year ago.

Regionally, existing-home sales in the Northeast rose 3.4 percent to an annual pace of 600,000 in January and are 7.1 percent above a year ago. The median price in the Northeast was $225,700, which is 4.2 percent below January 2011.

Existing-home sales in the Midwest increased 1.0 percent in December to a level of 980,000 and are 3.2 percent higher than January 2011. The median price in the Midwest was $122,000, down 3.9 percent from a year ago.

In the South, existing-home sales rose 3.5 percent to an annual level of 1.76 million in January but are unchanged from a year ago. The median price in the South was $134,800, which is 0.3 percent below January 2011.

Existing-home sales in the West jumped 8.8 percent to an annual pace of 1.23 million in January but are 3.1 percent below a spike in January 2011. The median price in the West was $187,100, down 1.8 percent from a year ago.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.

Copyright National Association of REALTORS®. Reprinted with permission.

Six Questions Homeowners Should Consider When Buying Property Insurance

NEW YORK – Feb. 21, 2012 – Homeowners should work with experts to determine the type of homeowners insurance they need and the amount of coverage.

“Besides knowing the basics of what a standard homeowners insurance policy covers, consumers should ask a series of questions – and receive satisfactory answers to each of them – before buying a new policy or renewing an existing one,” says Michael Barry, vice president, media relations, Insurance Information Institute (I.I.I.). I.I.I. is a nonprofit, communications organization supported by the insurance industry.

According to I.I.I., there are six basic questions everyone should ask before buying or renewing a homeowners insurance policy:

1. How much would it cost to rebuild my home in its current location in the event of a total loss? Ideally, a homeowners insurance policy should cover the cost of building a new home from scratch. In general, homeowners policies cover partial or total damages caused by fire, hurricane, hail, lightning or any other disaster if it’s listed in the policy. Flood and earthquake-related losses must be insured separately because both perils are excluded in standard homeowners insurance policies.

2. How much is my personal property worth in the event of a total loss? A homeowners insurance policy should cover the cost of replacing all personal property (furniture, appliances, clothing) should it be stolen or destroyed by fire, hurricane or another insured disaster. Most companies provide personal property coverage equal to about 50 to 70 percent of the amount of insurance on the home’s structure. (A $100,000 policy for the structure would have perhaps $50,000 to $70,000 worth of personal property coverage.)

However, the best way to determine personal property coverage in a specific situation is to conduct a home inventory. I.I.I. provides online software to help homeowners catalog and value possessions (link underlined to: https://www.knowyourstuff.org/iii/login.html) as well as an iPhone app.

3. How much liability protection do I need? Liability covers homeowners against lawsuits for bodily injury or property damage caused to other people, including damage caused by pets. The liability portion of a policy pays legal defense costs and any court awards – but only up to the limit set in the policy. It’s effective not just inside the home but also anywhere in the world. Liability limits generally start at about $100,000, and many insurance agents will recommend at least $300,000. Homeowners with significant assets may want more; others may want less.

4. What level of additional living expense coverage do I need? The Additional Living Expenses (ALE) provision is found in standard homeowners insurance policies. It pays for the costs of living away from home if damage from an insured disaster makes the house uninhabitable. ALE covers hotel bills, meals and other expenses above customary living expenses.

ALE coverage differs from company to company. Many policies provide coverage equal to about 20 percent of dwelling protection. For example, if the structure of your home is insured for $100,000, you would have $20,000 of ALE coverage. Some companies impose a time limitation, such as 12 to 24 months.

5. Should I buy a separate flood and/or earthquake insurance policy? Flood coverage is available from the federal government’s National Flood Insurance Program (NFIP) and from a few private insurers. Earthquake coverage is usually available in the form of a supplemental policy.

6. Do I qualify for any discounts? Homes with smoke detectors, burglar alarms or dead-bolt locks often get a premium rate discount. Sophisticated sprinkler systems and alarms that ring at monitoring stations often reduce homeowners insurance premiums too. Ask an agent. If you are at least 55 years old and retired, for instance, you may qualify for a discount of up to 10 percent at some companies. If you have completely modernized your plumbing or electrical system recently, a few companies may provide a price break.

© 2012 Florida Realtors®
Reprinted with permission. Florida Realtors®. All rights reserved.

Little Time Left to Claim Your 2012 Homestead Exemption in Florida! Better Hurry!

This message is for those of you who purchased and occupied a home during 2011 that will be your permanent (homestead) residence. Or for those who have now decided to live in their vacation homes on a permanent basis and are no longer declaring a home in some other state as their homesteaded residence.

Do be aware that homeowners who plan to make their homes their permanent residences, or in other words, their homesteads, should apply for the exemptions just has they have in the past. That means that they had to close on the purchase of their home and occupy it before the end of 2011.

Then they need to file for their exemption(s) by the close of business on March 1, 2012. You need to check with your local property appraiser to see what ALL of the requirements are. Having a Florida drivers license and car registration are just a couple of them. Your appraiser can give you the complete rundown.

Do note that in addition to the Homestead Exemption, there are others for: widowed persons, disabled persons, diabled veterans, blind individuals, and active military personnel. Your local property appraiser can give you more details about what is available and which exemptions you might qualify for.

All of the exemptions you qualify for will apply to those persons who requested and got their homestead exemption by the deadline. But again, I suggest strongly that if you have any doubts at all, you should contact your local county property appraiser as soon as possible! Time is running out quickly!  The appraisers are the experts in these matters and their offices can answer all of your particular questions.

The main thing is to be sure you apply in time. If you meet the legal requirements, you have nothing to lose by declaring your homestead with the county. If you do not do so, you could be making a very costly mistake.

If you go to my website you will also find a menu button for our local county Property Appraisers. To get there just click on the following link: www.jelwell.century21bnr.com  Then click on the button for Property Appraisers. If you find your county listed, just click on that link. If your county is not there, then click on the bottom link that will show you a list of all of the counties that exist in Florida. 

Each of the appraiser's sites will have information concerning Homestead Exemptions and also contact telephone numbers if you wish to speak with someone in the appraiser's office. I am sure they will be happy to answer any questions that you may have. I have always found them to be very helpful.

If you like, you can click on the following link to download a brochure in Adobe PDF format that is currently on our Pasco County site. Your own county may also have similar documents. Click here if you would like to review this document:  Download Homestead Exemption Brochure 2011 for Pasco County, Florida

So if you believe that you qualify for a Homestead Exemption or one of the many others, I suggest that you start making some calls right now so you can be sure that everything is done correctly and in time. Do not wait until the last minute.  In this way you will get all of the exemptions that you deserve!

For more information or questions about this topic you can call JOHN ELWELL - REALTOR at CENTURY 21 Bill Nye Realty, Inc. 813-783-4444 or e-mail me at: jelwell1@tampabay.rr.com

Average Mortgage Interest Rates Unchanged Again This Week! Stuck at Historic Lows!

Today, 2/16/2012, Freddie Mac reported that the average mortgage interest rate for 30 year fixed-rate mortgages was 3.87%, unchanged from last week. The average interest rate for 15 year fixed-rate mortgages was 3.16%,unchanged from last week. A year ago the 30 year rate was 5.00%! This is the third week in a row that rates have been this stable!

A Freddie Mac spokesperson said, "Fixed mortgage rates were unchanged this week amid mixed confidence measures. Small business confidence ticked up slightly in January, representing a fourth consecutive month gain, according to the National Federation of Independent Business index. However, the Reuters/University of Michigan index of consumer sentiment fell in February by more than the market consensus forecast breaking a five month trend. In the meantime, home builder confidence rose in February to the highest reading since May 2007, based on the NAHB/Wells Fargo Housing Market Index."

So again, a mixed bag of reports. Some good, some not. But overall, what I am seeing on the news and hearing in the business groups, is that slowly, but surely things ARE improving in many areas.  We need more improvement, and we need it in all sectors. However, there is the perception that things are getting better and that the danger of falling back into a recession appears to be less than it was. Let's hope so.

Do keep in mind that we are a very large country, So figures that come out for the entire nation, may have little or no relevance for your particular area. In the end, it is best if you speak with a local REALTOR or financing expert to see what the situation is for your part of the United States. Florida is not Michigan, nor is Maine the same as California. Market conditions can be very different from place-to-place. Also, your own credit history, the property you want to buy, etc. will effect your specific loan options and interest rates. Your mortgage broker or bank loan officer can give you more specific information.

If you want to learn more about Freddie Mac or see the details of their survey, go to: www.freddiemac.com and click on the link for "Current Weekly Survey". They break down the survey by specific regions in the United States so you can see how your state compares to other parts of the country. They also explain the mission of Freddie Mac and offer a lot of useful information for consumers.

If you would like to speak with a lender you can find some at my website: www.jelwell.century21bnr.com . You can also speak with your own bank, credit union, or mortgage broker to see what your particular interest rate would be, should you decide to finance a home purchase.

I would also be happy to assist you in any way that I can. Just call JOHN ELWELL - REALTOR at CENTURY 21 Bill Nye Realty, Inc. : 813-783-4444 or e-mail me at: jelwell1@tampabay.rr.com You are also welcome at my webpage: www.jelwell.century21bnr.com  Licensed in Florida.

Florida Economy Made Gains in 2011 in Several Areas

TAMPA, Fla. – Feb. 16, 2012 – A State Monitor report released by BMO Capital Markets Economics finds that the Florida economy gained momentum in 2011, but activity still “remains depressed in the wake of the housing bust.” Real GDP (gross domestic product) growth likely underperformed the national average again last year as it has for the past four straight years according to.

However, job growth continued to pick up, with nonfarm employment in December 1.6 percent above year-ago levels thanks to gains in real estate (+4.2 percent year over year), accommodation and food (+3.5 percent year over year) and retail (+3.1 percent year over year). Construction job losses moderated in 2011, but Florida employment remains depressed, hitting the lowest level on record in October and 50 percent below peak levels. The jobless rate was 9.9 percent in December, one of the highest in America, but still dropped 2.1 percentage points for the past year.

“Population growth picked up 1.2 percent in 2011 as net outward state migration appears to have stopped, but growth remains well below the pre-housing bust pace of more than 2 percent per year,” says Sherry Cooper, chief economist, BMO Financial Group.

Housing shows early signs of stabilization, but it does not yet add meaningfully to economic growth. The months’ supply of homes for sale has fallen sharply in Miami, Tampa and Sarasota, due to less construction and higher demand. While foreclosures declined in 2011, the foreclosure rate remained high.

© 2012 Florida Realtors®

Reprinted with permission. Florida Realtors®. All rights reserved.