Good news about housing and stocks lifts Florida's consumer confidence
GAINESVILLE, Fla. — Rising housing prices, stock market gains and the lack of any new setbacks in the national economy boosted Florida’s consumer confidence three points to 70 this month, according to a new University of Florida survey.
“We had anticipated an increase in consumer confidence in August based on what appeared to be an unjustifiable two-point drop in July following what was already a two-point decline the previous month,” said Chris McCarty, survey director of UF’s Bureau of Economic and Business Research. “While the economic environment is by no means bright, the decline in July seemed unsustainable given the lack of any very bad economic news and some encouraging signs in Florida’s housing market and the stock market.”
Three of the five components in the index rose, one fell and one stayed the same. Perceptions of personal finances now compared with a year ago remained unchanged at 43, still only four points above its all-time low of 39. Perceptions of U.S. economic conditions over the next year jumped 10 points to 73; perceptions of U.S. economic conditions over the next five years rose eight points to 80; and perceptions of personal finances a year from now increased five points to 84. The only component to drop was perceptions of whether it is a good time to buy big-ticket items, which fell five points to 72.
“We are not out of this recession yet, particularly here in Florida, but things are not nearly as bad as they were a year ago,” he said.
Home sales have picked up both nationally and in Florida, and falling prices suggest a bottoming out of the housing slump, McCarty said. The latest report from the Florida Association of Realtors shows median prices for existing single-family homes flat from last month and still up for the year, he said.
If foreclosures continue, they could depress home prices, McCarty said. The Mortgage Bankers Association has reported that 23 percent of Florida mortgages in the second quarter of 2009 were either in foreclosure or late on payments, he said.
The hardest hit area for foreclosures is along the southwest coast, including Fort Myers, Sarasota and Punta Gorda, all of which are disproportionately dependent on retirees, McCarty said. A slowing of the retiree housing market is a big factor in Florida’s population decline last year for the first time since 1946, which the Bureau reported last week, he said.
One area that has shown no signs of improvement is employment, McCarty said. “Employment remains an enormous problem for Florida,” he said.
The latest information from the Agency for Workforce Innovation shows Florida’s unemployment rate of 10.67 percent in July remained unchanged from the previous month, McCarty said. This number, which does not take into account those who have given up looking for work, is likely to increase through the end of 2009 and into 2010, he said.
“We expect consumer confidence to stay mired in the upper 60s and low 70s as the recovery develops,” McCarty said. “Unfortunately, while Florida housing is showing signs of improving, the overall state economy in the long run will likely lag other parts of the country given the prospects for a turnaround in employment.
“As the country moves into recovery over the next year, real estate, construction spending and tourism — all of which have been major sectors in Florida economy’s over the past two decades — will certainly stabilize, but not grow as they had,” he said. “Florida needs a new approach.”
The research center conducts the Florida Consumer Attitude Survey monthly. Respondents are 18 or older and live in households telephoned randomly. The preliminary index for August was conducted from 425 responses. The index is benchmarked to 1966, so a value of 100 represents the same level of confidence for that year.