Positive indicators show improvement in local economy

There is a silver lining - more than one the experts believe - in the dark recession cloud that has been hanging over Florida and the country.

The Associated Press reported in a story earlier this month that the Federal Reserve said the economic recovery is spreading to most parts of the country. Merchants are seeing better sales and factories are boosting production.

The story went on to say that retailers in the South saw traffic and sales increase and the sales outlook improved. New orders and production rose in factories.

Also, according to the AP, employment was up in 33 states last month, with the strongest gains in Maryland, Pennsylvania and Virginia.

Good news, bad news

Rebecca Rust, the chief economist for the state Agency for Workforce Innovation, said she is "cautiously optimistic" about Florida's outlook as a result of several positive indicators.

Rust said the rate of job loss has moderated and that is "very significant."

Layoff notices are down from previous months, home prices are stabilizing in some places and housing sales are up from this time last year.

Rust noted that population growth is resuming. 2008 was the first year Florida had lost population since the 1940s.

Rust said that the export market is important to the state. If the economies are better with trading partners Canada, Brazil and Asia that helps Florida.

"These are all good indicators to help Florida," she said.

The negative news revolves around jobs or the lack thereof. March's unemployment rate of 12.3 in Florida was the highest in the recorded series going back to 1970. Florida's unemployment rate remains higher than the national rate, which was 9.7 percent in March.

Rust expects the unemployment rate to increase for a number of months. She added that people who have dropped out of the labor force might begin feeling better about the economy and will try to get a job.

"No one knows what it is actually going to do," Rust said.

Sean Snaith, an economist with the Institute for Economic Competitiveness at the University of Central Florida, said Thursday during a speech in Sebring that it will be 2012 before unemployment falls below 10 percent in Florida.

"The labor market will take a long time to recover," he said.

The percentage of unemployed in Highlands County was 11.9 in March. It was 12.3 percent in February. Although the rate has fluctuated a little in recent months, Rust said is "relatively unchanged."

Dan Murphy, the executive director for the Highlands County Economic Development Commission, who spoke briefly before Snaith during the annual Business Development Day Breakfast, said Highlands has not had widespread layoffs.

He also said, "There is an incredible degree of uncertainty in the national, state and local economies."

Roger Hood, CEO and president of Heartland Workforce, said his office has seen an increase in orders for office-related jobs such as secretaries and administrative assistants. Hood wonders if that is a precursor for things to improve.

"Any job category that adds is a positive," said Rust, the state economist.

Hood noted that he has not seen many layoffs in the service industry.

"We are seeing favorable signs but don't have any statistics," he said.

On the other hand, Hood is not seeing construction jobs open up.

Home sales have increased

Steve Fruit, a Realtor with REMAX/Realty Plus 2, tracks sales from the Multiple Listing Service in Highlands County. He said from April 18, 2009 to April 18 of this year there was a 28.7 percent increase in residential property units sold. Residential property is defined as anything a person can live in on land that he owns.

According to the Multiple Listing Service, the number of single-family residential closings increased during each of the first three months of this year in Sebring. There were 42 closings in January, 49 in February and 56 in March.

They doubled in Lake Placid from January to February. Eleven closings were recorded in January and 23 in both February and March.

Avon Park had nine closings in January, 15 in February and 11 in March.

In Lorida, there was one closing in January, two in February and none in March.

Lower prices and an incentive program involving tax credits are apparently influencing the housing market.

The expiration of federal tax credits for house purchases is less than a week away. Buyers must sign a purchase contract by April 30 and close on the deal by June 30.

First-time buyers get up to $8,000 in tax credits and existing owners can get up to $6,500 in tax credits.

"The tax credit has made a big difference," said Maureen Cool, a Realtor with RE/MAX Realty Plus in Sebring.

Cool said first-time home buyers "are back in the market." She added that professionals such as teachers and police officers had been priced out of the market.

Homes under $100,000 are selling well, Cool said.

Sheila Richards, association executive for the Lake Placid Board of Realtors, said buyers are looking around and are looking at more than one property.

"With mortgage rates still low, it truly is the time to buy," Richards said.

Jeanne Warner, president of the Lake Placid Board of Realtors and a Realtor with Century 21 Compton Realty, said prices seem to be stabilizing a little bit. Other Realtors say it depends on the price range.

"You have to be ready to market your home and can't high ball," Warner said. "It is still definitely a buyer's market."

Home prices have dropped almost 50 percent since 2006, according to the Highlands County Real Estate Marketing Conditions report that is compiled by Allen Cooper of A.C. Real Estate Appraisal Services.

The median sales price of a single-family home in the county this year is $85,000. It was $169,000 in 2006 and has declined every year since then.

The median price was $150,000 in 2007, $125,000 in 2008 and $95,000 in 2009.

Warner said she doesn't think prices will ever get back to where they were four or five years ago.

Companies interested in region

Lynn Topel is the executive director of Florida's Heartland Rural Economic Development Initiative. The region includes Highlands, Hardee, Hendry, DeSoto, Glades and Okeechobee as well as communities in Collier and Palm Beach counties.

Topel said she sees "significant opportunities" particularly in the southern part of the region for companies interested in relocating.

"I see more activity right now than in the last five years," she said. "People are looking and are ready to expand."

FAST FACTS

First-time buyers get up to $8,000 in tax credits and existing owners can get up to $6,500 in tax credits.