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Pensacola Economic Summit Hosted at Pensacola Association of Realtors

02-02-09
Ranae Stewart

Recently the Pensacola Association of Realtors Hosted their yearly economic summit recapping 2008 and forecasting trends into 2009.

The summit was led by three local industry experts; John Priller a local appraiser, Al Muller a representative of Metro Market Trends and Dr. Rick Harper a University Professor and the head of the Haas Center for Business Research and Economic Development.

John Priller opened the summit with a quick overview of current market conditions. He first mentioned that local appraisers in the greater Pensacola area have recently been forced to adhere to increasingly restrictive HUD guidelines regarding the required number of comparable listings as well as the elidgeability of the listings to be used as comparables. Restrictions dealt not only with time period of sale but also absorption rates. Local appraisers are having to do much more work on each appraisal and consumers should expect appraisal prices to rise accordingly.

John estimated that local prices are falling, on average about one percent per month. This calculated decline is expected to continue throughout the 2009 calendar year and possibly into the first quarter of 2010. He predicted that the high-end residential properties were closer to recovery in terms of price than lower properties. He added that the lower end of the price spectrum can expect to see the continued declines as mentioned above. As with any decline, he forecasted a slowng of declines followed by a period of stagnation prior to the recovery of local area prices.

Dr. Rick Harper was the next to address the associationa and its members. Dr. Harper provided concrete evidence of Johns earlier predictions. He agreed that the recovery process in the greater Pensacola housing market would begin in the first quarter of 2010.

The greater Pensacola area currently has approximately 17 months of current listing inventory, a healthy market carries about six months of housing inventory. We currently have excess supply and not enough demand. Dr. Harper's proposed solution includes reforming current immigration policies in order to increase the number of people in Floridas population. Population growth has long been known as a major driver for the housing industry, as Dr. Harpers logic follows an increase in the population of the state would aid housing sales and the recovery of our housig markets.

On a positive note, Dr. Harper pointed to some highlights of our local economy. Northwest Florida has always been a more affordable housing market than other sectors in Destin or Miami for example. The greater Pensacola area experienced inflated prices but on a much smaller scale than the rest of florida, this allows our prices to correct more quickly and efficiently than other parts of the state.

Al Muller was the final summit speaker. He echoed many of the same sentients at the other speakers and agreed that we are in a slow decline, whicgh is a neccesary correction for the industry. He also pointed out that while prices increased very rapidly during the 2002 to 2006 boom, they have been slower to adjust downward. He anticipated a much slower return to a Seller'smarket. He also agreed that prices in the Pensacola area will continue a steady decline until early 2010.

The basic finding was that there is a great window of opportunity in the greater Pensacola area for prospective home buyers to take advantage of historically low interest rates and an overage in supply. Sellers must list their property only if they must sell and be prepared to price thier home accordingly!

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