2017 Economic Summit Featured Speakers: (l-r) Chairman of the Collier County Planning Commission Mark Strain;
Partner at Carroll & Carroll, Inc. Cindy Carroll, SRA; Nationally Acclaimed Economist Dr. Elliott Eisenberg;
and NABOR® President Dominic Pallini
Naples, Fla. (May 11, 2017) – More than 400 REALTORS® and real estate professionals interested in the economic health of Collier County attended the Naples Area Board of REALTORS® (NABOR®) 2017 Economic Summit, “The New Future: A View from the Top,” on Wednesday, April 26, 2017 at the Hilton Naples. Three industry experts provided national, state, and local analysis of recent and future growth projections in home sales and business growth activity as well as predictions on what to anticipate from lending institutions and federal regulators in the next 12 months. (see gallery of photos below)
“It looks like we turned a corner,” said Cindy Carroll, SRA, with the real estate appraisal and consultancy firm Carroll & Carroll, Inc., who presented a detailed analysis and comparative review of local housing sales activity. “In the last 12 months we’ve seen inventory increase 23 percent, but that is lower than the previous year, which saw a 35 percent increase. Our inventory may be slowing, but we still have an eight month supply of homes for sale.” Carroll considers a 12-month supply of homes in Collier County a balanced market.
With decades of experience that builds on a family legacy in the real estate appraisal business, Carroll combined her earned wisdom with data collection from the First Quarter 2017 Market Report released by the Naples Area Board of REALTORS® (NABOR®), which tracks home listings and sales within Collier County (excluding Marco Island), and reports generated from the Southwest Florida Multiple Listing Service (MLS), to ascertain a long-view of market behaviors. During her presentation, she shared a surplus of data from these reports and her own conclusions including:
“We are wealthiest county in Florida with an average per capita income of $78,000,” said Strain. “Our population has increased over 10.7 percent between the years 2010 to 2016. At this rate, we will reach maturation in the year 2030.”
An audible gasp was heard from the audience when he revealed that 32 residential developments were approved in the last year, amounting to an additional 4,182 new lots for sale. He also reported 76 new commercial developments approved in 2016, and 56 senior living facilities currently existing with an additional 13 planned but not yet built.
“The Immokalee Road/I-75 and Collier/US 41 corridors are the fastest growing areas in the county,” added Strain. “And a recent request to change the building height limits at the entry to the City of Naples may produce some rapid new construction, as laid out in an ambitious redevelopment plan for the Gateway Triangle area.”
Rounding out his presentation, Strain shared with the audience that Collier County has one of the lowest crime rates in the state despite its rapid population growth (Collier saw a 5 percent reduction in crime in 2015 followed by a 7.8 percent reduction in 2016). Also, as we continue to grow there are over a dozen additional schools planned at all grade levels throughout the critical growth areas of the county.
After breaking to visit the Summit’s sponsors, which included event sponsor Quail Creek Country Club, technology sponsor Supra, and table sponsors The Arlington, Zillow, Collins & Dupost Design Group, Mattamy Homes – Compass Landing, London Bay Homes, Lake Michigan Credit Union, Stock Development, Marketplace Homes Mortgage, Seeman Holtz Property & Casualty, and Quail Run Golf Club, Summit audience members were hushed by the fast and humorous presentation style of Dr. Elliot Eisenberg, a nationally acclaimed economist and founder of Graphs and Laughs.
Eisenberg’s presentation to local REALTORS® coincidentally coincided with the release of President Trump’s proposed tax plan. In response, he quickly remarked that Trump’s proposed plan would hurt the deficit. However, he is confident that there is a low probability of it being passed in its current form.
“The economy is improving,” said Eisenberg and added that, “we are feeling tail winds, not head winds anymore.”
But he was quick to warn the audience that he is seeing a mild deterioration in the quality of new home loans. “There are several proposals out there that intend to do a lot of things including loosen regulations, begin housing finance reform, and provide relief for community banks,” he said. “But the devil’s in the details and it remains to be seen if any one of them will be delivered.”
Eisenberg also pointed out that while consumer confidence is up, household spending has been weaker as of late. “There are two things Trump has to do to get our Gross Domestic Product (GDP) above 2.5 percent: increase labor supply and increase productivity,” stated Eisenberg. “But the labor force is going down. Productivity growth is going down. The only way to get a better GDP is to have more productivity, which requires more capital investments and less regulation. There also needs to be a focus on career retraining to develop new skill sets. These steps are not in the proposed Trump tax policy.”
Another concern Eisenberg has for the economy is the fact that there is roughly the same number of people retiring as there is entering the workforce. “We are slowly running out of workers,” exclaimed Eisenberg. “10,000 workers are quitting their jobs every day.”
In terms of inflation, Eisenberg said the Federal Reserve is going to have to keep increasing interest rates. How high? “Not much,” he said. “The Federal funds rate is .875 percent now. We can expect two hikes in 2017, maybe three next year, and another three in 2019, at which time it should reach 3 percent. But it won’t grow fast enough to cause another recession.”
Pivoting to the housing market, Eisenberg had many projections to share. First, residential fixed investment is on the rise, and overall household formation is improving. Millennials are getting older and beginning to leave rentals and enter the housing market. But first-time homebuying activity is still low as this generation continues to face a lack of credit and wealth as many remain burdened with student loans.
Surprisingly, Eisenberg recommended REALTORS® suggest short-term adjustable rate mortgages because people don’t intend to stay in their homes for 30 years anymore. For Millennials, this may mean looking at loans that better correlate with how long they intend to stay in one place.
Another factor impacting the housing market, according to Eisenberg, is available land.
“Land use is the biggest problem driving prices up,” he said, followed by “the rising costs of inputs like wood. Trump has increased Canadian wood tariffs 20 percent. This is going to make it costly for Americans to build new homes.”
As a result, this astute national economist predicts we’ll see housing inventory change very little as people will choose to live longer in the same place.
In conclusion, Eisenberg said, “Housing prices are increasing faster than wages, and cash sales are down from its peak. But home values in the Northeast have recovered. When the markets up there are good, then Florida will be ok.”
The NABOR® Economic Summit is presented by the Media Relations Committee and Economic Summit Task Force, under the leadership of Task Force Chairman Bill Poteet.
NABOR® would like to thank Jeff Lytle, former Naples Daily News Editorial Page Editor, for moderating the event, and Quail Creek Country Club, its primary event sponsor.
The Naples Area Board of REALTORS® (NABOR®) is an established organization (Chartered in 1949) whose members have a positive and progressive impact on the Naples Community. NABOR® is a local board of REALTORS® and real estate professionals with a legacy of nearly 60 years serving 6,000 plus members. NABOR® is a member of the Florida Realtors and the National Association of REALTORS®, which is the largest association in the United States with more than 1.3 million members and over 1,400 local board of REALTORS® nationwide. NABOR® is structured to provide programs and services to its membership through various committees and the NABOR® Board of Directors, all of whose members are non-paid volunteers.
The term REALTOR® is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribe to its strict Code of Ethics.
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