boom

Florida Boom Soon to Slow Down

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Currently Florida’s robust real estate market is suffering from its own success because of the large influx of investors and other buyers paying cash. This is in addition to the rising interest rates driving up the prices.

There is a spike of new and would-be residents who are pushing up prices so quickly that they causing affordability issues and slowing up contract signings. This is likely denoting a softening market. A raise in price speed is paralleled by the slowdown, so the faster prices increase the greater the market will slowdown. Because Florida is a tourist market, investors are a potential factor because they pay with cash, but they will eventually no longer consider Florida a bargain and look elsewhere.

Many realtors are expecting it to slow up and the market to equalize. This should not worry potential buyers or sellers because the pace of price appraisals are not supporting values. This is still a good sign for the booming market of Southwest Florida because many potential buyers are attempting to escape the cold northern weather. The state and local government have also passed permit extensions that allow builders to continue stalled projects after the recession. This will continually strengthen the Florida market.

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Contractors Add Jobs That Hit Highest Level Since June 2009

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Contractors added 19,000 employees in March according to The Associated General Contractors of America, which brought the industry employment to the highest level since June of 2009 even though the employment rate is the lowest in 7 years. This is in effort to make contractors eligible to prevent labor shortages with the expanding demands of the market.

According to Ken Simmons, Associated General Contractors of America’s chief economist, this past year the rate of construction is greater than the amount of jobs in the industry. This is because there has been a balanced increase in both residential and non-residential construction over the past 12 months.

The federal, state and local governments are attempting to fight the labor shortages by developing a process to make it easier for firms, schools and trade associations to create training programs. These new training programs will benefit secondary-level construction programs as many experienced laborers have been leaving and returning to the industry but it is not enough to reach the demand necessary for the economic upswing. During a time when hope for recovery is so important, the last thing the country needs is a labor shortage.

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U.S. Mortgage Rate Eases

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Mortgage rates have declined a little since spring has gotten off to a slow start. Freddie Mac said the rate for the US’s 30 year loan has eased 0.04% and the average for the 15 year mortgage has gone down 0.01%.

National home prices are expected to go up this year by a few digits, which is better than the double-digit increase as the US recovers from the recession. The Federal Reserve will reduce its multi-million dollar bond purchases per month to maintain low long-term interest rates.

The Federal Reserve has been reducing its monthly bond purchases since the end of last year to keep rates low. Reducing purchases is a good sign the Feds believe that the economy is healing.

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United States Propelled Growth in April

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Transportation, warehousing, construction and retail are four of fourteen industries that grew last month and are fueling expansion. According to a non-manufacturing survey, this is the 57th month in a row that orders have been growing.

Many businesses are taking advantage of the pickup in sales, which is bringing back optimism for growth. This optimism is leading to more investments by businesses that will contribute to the accelerating growth.

An example is construction companies who see an increase in groundbreakings. Because of the increase in groundbreakings they are hiring more laborers, which is helping grow the industry. They are hoping to maintain stable growth. Southwest Florida is seeing investments in businesses locally by companies like Hurtz, Sam’s Club, and road work including US 41 and the I-75 bridge over the Caloosahatchee River.