Economist: Hard year ahead for region
Hank Fishkind predicts a new flood of foreclosure filings
Economist Hank Fishkind, with Orlando-based Fishkind & Associates, spoke Thursday morning at an event hosted by the Manatee County Chamber of Commerce's Economic Development Council. Fishkind shared his economic forecast, saying that 2010 was going to be a difficult year for the Sarasota-Bradenton housing market, but he predicted 2011 would bring improvement.
By Aaron Kessler
Published: Friday, January 22, 2010 Herald Tribune
BRADENTON - Economist Hank Fishkind predicts 2010 will be "an ugly year for foreclosures" in the Sarasota-Bradenton area and across Florida, putting further pressure on home prices, and that new housing starts will be "miserable."
Fishkind told a gathering of the Manatee Economic Development Council on Thursday that thousands of more jobs were likely to disappear this year in Southwest Florida. But the economist with Orlando-based Fishkind & Associates predicted that the situation on those fronts would improve in 2011, and that signs of recovery may begin to take place later this year.
Fishkind joined a growing chorus of economists who expect a surge in foreclosure filings this year that they say will eclipse the large numbers for 2009. Collectively, Southwest Florida finished 2009 with 27,129 properties in some stage of foreclosure, a 20 percent increase from 2008, according to data from California-based RealtyTrac Inc.
A flood of new foreclosures could further weigh down the market with increased housing inventory and thus continue to put pressure on home values. Fishkind said the largest concentration of foreclosures will take place in the early part of this year. He is forecasting another 20,000 foreclosures in 2010 for Manatee County, which would be about double the 10,000 of 2009. Though he sees a more promising 2011, Fishkind said that there would likely be another 10,000 foreclosures that year in Manatee before the phenomenon recedes -- meaning 5,000 foreclosures actions in 2012 and 2013.
For Sarasota County, Fishkind does not predict as dramatic a rise in 2010, though he is expects as many as 12,000 filings. He sees foreclosures ebbing in 2011, but remaining at 2009 levels. In 2012, he expects 4,000 filings and about 2,000 more in 2013. Housing starts in Sarasota County will be almost negligible this year, but Fishkind predicts they will pick up in 2011.
Manatee County is expected to have a slightly better performance on housing starts this year, but will still face difficulty until 2011 as well.
The upside of the local housing market, Fishkind said, is that buyers have been flocking to take advantage of low prices, which would likely mean the number of home sales will continue going up as prices remain low or drop even further. "This past year has proved that given enough affordability, people will buy houses," he said.
Overall -- in terms of economic growth -- Fishkind said Manatee County was in a much more advantageous position than Sarasota County. He called the "Sarasota 2050" growth plan a "failure," and said the community was "squandering its opportunity," and would no longer be able to use its reputation alone a physically beautiful place to sustain its economic future.
Statewide, Florida will be slower coming out of the recession than other parts of the country, and it will likely take most of 2010 before the state will find anything resembling an economic bottom, Fishkind said. Some hard-hit areas of Florida may not be able to return to anything approaching normal activity anytime soon, he said. "There may be parts of Cape Coral and Lehigh Acres that won't recover," Fishkind said. "It could be that 10 years from now, they are still having problems."
Fishkind did not see that kind of fate for Sarasota and Manatee counties, but the region will still take some time to come back; 2010, in particular, will be very difficult, especially the first half.
On the national economic front, Fishkind said the stimulus programs have been working, and that fourth quarter gross domestic product numbers, when they are released, could show as much as 5 percent growth. But he cautioned that the GDP figure would not represent "self-sustaining gains" because it will be mainly due to increases in inventory rather than consumption. "In order to see a real recovery, we need to see that consumption, and to spur that we need employment," Fishkind said.
Time is running out on the jobs front, Fishkind said. It will be important to see substantial job creation taking place before the government stimulus programs begin winding down later in 2010. If the economy is not creating jobs by May or June on the scale of 150,000 per month, then a sustainable recovery may be at risk of slipping away.