Fishkind Presentation – February 2010

April 18, 2010

On February 25th, I attended a presentation by Hank Fishkind sponsored by the Naples Area Board of Realtors in Naples, FL.  The firm’s principal Dr. Henry Fishkind, Ph.D. is the principal of Fishkind & Associates, Inc., an economic and financial consulting firm with offices in Orlando, Naples, and Port St. Lucie, Florida. The company was formed in 1987, and has extensive experience in economic and fiscal impact analysis, forecasting and finance throughout Florida and the United States.  Dr. Fishkind was formerly an associate professor of economics at the University of Florida, and Director of the University’s forecasting program.

Dr. Fishkind spoke to a group of about 220 Realtors as part of an annual market forecast event held at the NABOR office. His projections included national and statewide trends, as well as Southwest Florida information.

During his presentation, Dr. Fishkind painted a less than rosy picture of Collier County’s current economic condition describing it as a kind of financial Hurricane Andrew.

As usual during his presentation, he provided a number of slides which provided historical as well as forecast information on various economic indicators. 

The following slide presented his summary for the U.S. during the next three years:

 U.S. Forecast Summary 2010 – 2013

Recovery underway but will underwhelm

  • Economy is slowly but steadily recovering
  • Job growth very modest – strong enough to sustain the recovery but not strong enough to reduce unemployment until 2011
  • Financial system remains impaired

2011-2013 Paying the Bills

  • By 2011 the recovery will pick up steam
  • Fed will end extraordinary measures
  • Deficit remains large
  • Interest rates rise significantly

Main forecasts risk – run away deficits and a collapse in confidence in the dollar collapse in confidence in the dollar

The following slide presented his forecast for the State of Florida:

Florida Summary

  • Worst Recession since 1975 – bottoms in 2010
  • National recession focused on households and banks
  • Soft housing markets limit migration into Florida 2010
  • Broken nest eggs
  • Hometown Democracy

Since the official start of the current recession in December 2007 to the “so-called” end in November 2009, the country has seen a 23 month of consecutive drop in the Gross Domestic Product, the longest slide in U.S. history.  The average for all previous recessions was 10 months.

florida-summary-post-war-recession-in-us

 Stronger Growth 2011-2013

  • Improving migration trends
  • Stronger housing markets
  • Higher rates limit the expansion

 

Paradigm shift – Florida less attractive

  • Average annual population growth 300,000 +/- 50,000 depending on business cycle
  • Still Florida remains one of the fastest growing state east of the Mississippi

The declining economy led to a huge slowdown in population growth between 2007 and 2008 and a population loss between 2008 and 2009. The loss was the first since military personnel left the state at the end of World War II.

florida-population-growth

Florida is expected to add about 23,000 residents between April 1, 2009, and April 1, 2010, following a loss of almost 57,000 residents the previous year, according to projections released by the University’s Bureau of Economic and Business Research.

Despite these gains, the report states Florida will not return to its average annual increase of 300,000 until 2014 or 2015. 

florida-growth-forecast

In 2006, the state gained 129,300 jobs, only to then lose 140,100 jobs the following year. In 2008, a stunning 346,700 jobs were lost, followed by 235,000 jobs in 2009.

From a real estate perspective, Fishkind believes Florida might have lost its “competitive edge” compared to other states. Some of the reasons he pointed to include:

  • 1. Some attractive areas built out
  • 2. Unbridled impact fees
  • 3. Poor land use policies
  • 4. Faulty property insurance market
  • 5. Faulty property tax system
  • 6. High cost/duplication local government services (police, fire, EMS, planning)

Dr. Fishkind summary of the commercial retail and office market in Collier County was startling.  In 2009, rental rates for both retail and office were the lowest since 2005-2006 with vacancies approaching the highest levels ever seen.  Both of these property types saw negative absorption during a significant portion of 2009.

Posted by Scott R. Lodde

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