NABOR®️ Economic Summit: Experts Discuss Migration and Regulatory Patterns
NAPLES, FL – More than 300 REALTORS® and real estate professionals interested in the economic health of Collier County attended the Naples Area Board of REALTORS® (NABOR®) 2019 Economic Summit, “A View from the Top,” on Thursday, May 9, 2019 at the Hilton Naples. Three guest speakers provided a qualitative look into factors affecting the economy and provided analysis surrounding influencers affecting growth and home sales activity in the near future.
The data-filled day started with a historically subjective presentation by the Summit’s resident Naples housing market pricing authority Cindy Carroll, SRA, with the real estate appraisal and consultancy firm Carroll & Carroll, Inc. Carroll assured the audience that the housing market was stable as reflected in an 8.1-months supply of inventory. In comparison, Carroll recalled inventory statistics from 2007, which were at 35 months and added that during the fall of 2015, inventory was at 4.27 months, which is when she considers Naples was at the top of its latest market cycle.
“Inventory today is split equally between condominiums and single-family homes,” said Carroll, who added that the, “$2 million and above single-family home inventory market increased 23% in April, but sales are not keeping up with inventory in this sector of the market.”
Carroll added that she will begin to worry when she starts to hear that builders are pulling back on speculative home building in areas west of U.S. 41 because lot prices have increased. “When builders start to tell me they can’t find land, then I know we are about to experience a shift in the market where we may begin to see values start to decrease.”
Carroll also warned REALTORS® that not all the details about a home are in the MLS. For example, in the condominium market, “issues like pending insurance claims, infrastructure repairs or modifications to association rules are not listed in the MLS and might affect a buyer’s decision.”
Carroll said about half the inventory in the condominium market (2,000 units) today is in the $0 to $300,000 range. In 2005, many apartment units were converted to condominiums and this may be some of that overflow inventory.
Carroll then pointed to the 80-square miles Golden Gate Estates area where new single-family construction is most active and represents 42 percent of all listings for this geographic area. “There’s just 5 months of inventory in the estates,” she said.
Carroll said the next 12 months for the Collier County housing market will look much like the last 12 months. But she warned REALTORS® that while the overall market will be stable, there will be pockets where values will increase and other pockets where it will decline. In closing, the veteran appraiser recommended REALTORS® look for the lowest priced comparative and start there. “Properly priced listings will prevail!”
Next to take the stage was Randy Krise, a long-time commercial REALTOR® in Southwest Florida and Chairman of the Lee County Port Authority Special Management Committee. Krise discussed the airport’s various revenue streams and how proposed and current expansion plans will improve the airport’s ability to serve the area’s growing number of visitors and potential homeowners.
“The airport receives no ad valorem taxes and must manage revenue and negotiate contracts with numerous lease holders including retailers, airlines, and businesses that operate on the airport’s 7,000 acres of land,” said Krise, who added that retail space at RSW is about $160 a square foot. “This doesn’t include the Page Field property, which, in addition to its airport operations, must also manage 22 retailers who contribute about $14,000 a month in rents from Page Field Commons.”
Krise announced that a $160 million airline ticket counter and gate podium renovation will include a new airport security check point and expand the lobby area. Currently, there are TSA checkpoints at each of the three concourses. According to Krise, redirecting passengers through one large TSA checkpoint will allow the airport to reduce spending on TSA personnel and increase revenue from retailers currently located outside security.
“RSW is the busiest single runway airport in the country,” said Krise, who said one incident on the runway could halt incoming and outgoing flights for several hours. “There is currently a proposal to also build an additional 9,100-foot runway.”
The final speaker was Sean Snaith, PhD, an economist with the Institute of Economic Competitiveness at the University of Central Florida, which does economic forecasting for the state and its 22 counties. Dr. Snaith began his presentation by stating he is less interested in which political party is in power and more concerned with the policies associated with the majority party. So far he feels the current administration’s policies are creating a healthy economy and this has improved his outlook.
“When the corporate tax rate was cut from 35% to 21% this not only put us in line to be more competitive with other countries, but increased our revenues since many companies were no longer incentivized to move production outside the U.S.,” said Dr. Snaith, who added that “the lower 15.5% repatriation tax rate is also helping bring money back to our shores.”
“The secret sauce for this administration is regulation,” remarked Dr. Snaith. “There are currently 22 deregulations for every 1 new regulation.” In comparison, Dr. Snaith said there were 22,000 pages of federal regulations in 1949; while in 2005, the country’s federal regulations consumed 140,000 pages.
“These federal regulations over 50 years reduced real output growth on average by about 2%,” said Dr. Snaith. “If these regulations had not been in force, the real GDP in 2005 would have been $53.9 trillion instead of $15.1 trillion.”
To explain further, he said the 1970s were a great time of innovation, but slow productivity. This was also a time when there was an acceleration of regulations. Interestingly, he also pointed out that regulations typically increase during the last two years of a two-term president.
Addressing trade agreements, Dr. Snaith said trade negotiations and higher tariffs on imports from China will benefit the U.S. economy. “Trade agreements are not the 10 Commandments,” he remarked.
In closing, Dr. Sean Snaith said “2019 will produce another 3%+ a year in GDP growth, and that if we want faster economic growth, we must put more people in Florida’s workforce.”
The Economic Summit is a collaborative effort of the NABOR® Board of Directors, Media Relations Committee, and the Economic Summit Task Force under the direction of Bill Poteet, Economic Summit Task Force Chairman.