Monday, January 08, 2007

Orlando Real Estate Strong Market

The Orlando area is Florida's strongest real-estate market as the state heads into the new year, while Fort Myers and Miami are the weakest, according to a new, three-year forecast that has mostly good news for the region.

Metro Orlando's advantages include strong population growth, driven by "robust gains in employment," and relatively low levels of new-home inventory, according to the report, which is to be released next week by Attorney's Title Insurance Fund Inc."

Orange County's economy will grow strongly through 2009," and population growth "holds up well over the forecast horizon," said Orlando-based economist Hank Fishkind, who prepared the report for Attorney's Title, the state's leading title-insurance underwriter.

Fishkind said Friday that Fort Myers and Miami are the weakest markets in the state because of large inventories of unsold homes and lower rates of household formation.

In four-county Metro Orlando, Lake County could experience one of the weaker real-estate rebounds, as the report notes there is "little growth in the rate of formation of new households," and "housing starts are expected to slow through 2007 and remain stable through 2009."

Still, the Lake County economy overall is expected to expand strongly through 2009 as it integrates with the metro area's three other counties, the report predicts.

"They really have an [excess] inventory problem there," Fishkind said of Lake County's housing stock.

In Orange and Seminole counties, there is relatively little "standing inventory" of new homes, the report notes, and household growth in those counties "gives rise to sustained strength in housing starts."

Trouble in Osceola

Osceola County's new-home starts plunged from about 8,000 units in 2005 to about 4,000 last year, and it will likely remain at about that level through 2009, the forecast suggests. Though the county has little standing inventory of single-family homes, "high inventories of new and converted condominium units will keep prices stable as the market continues to slip."

The report, which analyzed 33 of the state's largest counties, predicts that, in Metro Orlando, "trends in the existing-home markets are expected to be similar to those of the new homes' marketplace."

Doug Buskers, a residential-real-estate sales agent in the Longwood office of Exit Real Estate Results, agrees with Fishkind that Metro Orlando is a strong market in comparison with much of the rest of the state, where speculative building was more rampant. But he said it is hard to generalize because demand varies so much at a local level.

"It depends on your market. Windermere is different from Pine Hills. So you really have to pay attention to your local area and educate your clients about that, " said Buskers, who moved to Central Florida three years ago from the Washington area.

"I do think this is a vibrant market overall and should be the rest of the year. But that doesn't mean prices will appreciate like before," he added. "We'll still see some adjustment downward."

Fishkind said that, in analyzing the data, he was also struck by how widely the various counties differ in terms of housing stock, buyer demand and other factors.

"There is very strong differentiation, even within a metro area," Fishkind said. "Lee County is overbuilt. Collier County, right next door -- not so overbuilt."

Market 'coming back'

Jeff Alexander, a Lake Mary resident and president of Homecrete Homes, a specialty builder based in Stuart on the Treasure Coast, said he concurs that the Orlando market has advantages over some areas of the state -- including more room for growth.

"The Treasure Coast is what's known as a scattered-lot market," Alexander said. "There are just no big tracts of homes, the way it is in the Orlando area."

Alexander, who has been in the home-building business since 1979 but moved to Florida from Chicago about six years ago, said residential construction in Florida is returning to more-conventional and cyclical patterns based on supply and demand.

"The market has flattened out, but it's coming back," Alexander said. Courtesy Orlando Sentinel 1/6/07.