Official: Housing Slump To Be Worst In Lifetime

[Joseph Burkeson, CMI]

Q: What is the difference between a Florida home builder & a Pigeon?

A: The Pigeon can still make a small deposit on a new Lexus.

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Official: Housing Slump To Be Worst In Lifetime

By MICHAEL SASSO The Tampa Tribune

Published: Jan 11, 2008

TALLAHASSEE - Calling it the "worst housing downturn in our lifetime," an official with the Florida Home Builders Association said Florida's housing industry may finally bottom out at some point this year, but that's assuming the state avoids recession and the government eases the subprime loan mess.

On Thursday, David Hart, vice president of legislative and governmental affairs for the association, gave a bleak assessment of the state's housing industry to business reporters and editors gathered for a business journalism summit in Tallahassee. Editors also heard from David Denslow, an economist with the University of Florida's Bureau of Economic and Business Research, who said Florida likely has a 70 percent chance of falling into recession this year along with the nation as a whole.

If the nation and Florida go into recession, Florida could be hurt worse than other states, Denslow said. Central Florida could be hurt by its high percentage of subprime home loans, Denslow said. These mortgages, many of which will shift to higher interest rates shortly, have been defaulting in record numbers.

Hart cited a report issued this week by Raymond James & Associates. The report said Florida saw a 30 percent drop in single-family home sales in November when compared with the same month in 2006. Sales in the Tampa-St. Petersburg market fell 30 percent year over year, Orlando fell 35 percent and Miami fell 59 percent.

Meanwhile, 17 of 18 metropolitan areas in the state suffered from declines in the median price of homes sold. Prices in the Tampa-St. Petersburg area fell 15 percent. The only market gaining ground was Tallahassee, where the median sales price rose by 1 percent in November, Raymond James reported.

The median sales price of homes statewide fell 10 percent to $215,000 from $239,800 in November.

Although Hart said the Florida housing market may reach bottom this year, based on projections by the National Association of Home Builders, analysts at Raymond James gave no such prediction.

"Sales have been on the decline for over two years and it appears the market is still not close to a bottom or demonstrating any signs of stabilization," the investment banking firm noted.

Hart took the occasion Thursday to lobby for builder-friendly legislation at the upcoming legislative session, including more property tax reform and reducing construction impact fees, which he said have soared in some areas. Hart said impact fees on Florida new homes rose 149 percent on average between 2003 and 2007, rising to $10,558 from $4,243 during the period.

Reporter Michael Sasso can be reached at msasso@tampatrib.com or (813) 259-7865.