Economic Outlook for Northwest Florida: Real Estate
Despite the recent slump in the housing market, there are bright spots on the horizon.
One of them is Northwest Florida - the Florida panhandle, or the Emerald Coast - where gorgeous beaches, a stable economy and favorable demographics lead CNN Money.com, American Express, Fortune Magazine and others to write encouraging words about the potential of the real estate market here.
One of them is Northwest Florida - the Florida panhandle, or the Emerald Coast - where gorgeous beaches, a stable economy and favorable demographics lead CNN Money.com, American Express, Fortune Magazine and others to write encouraging words about the potential of the real estate market here.
Florida Panhandle - An Undiscovered Gem
So we are excited about the area -- but what about the financial realities of buying real estate in Florida -- now?
Northwest Florida Is Vibrant
- Northwest Florida has a vibrant and steady tourist business.
- Northwest Florida has minimal unemployment.
- The new Panama City International Airport, projected to open in February 2010, will make the area quickly accessible from everywhere in the country and Europe.
- The airport is projected to provide a substantial boost to the region's economy, and will increase demand for real estate.
What the Experts Say about Real Estate Values in Northwest Florida
CNN Money.com (Feb. 12, 2007) chose Panama City, Florida as the #1 place to buy real estate in the country.
American Express says that Northwest Florida is one of its Top Ten vacation destinations in the country. Northwest Florida is second behind the Orlando area in Florida tourism. Northwest Florida beaches are world-class, drawing over seven million tourists each year -- more than any other East Coast beach area.
Real estate professionals in Walton County say that prices are lower than during the boom year of 2005. But they are expecting sales to increase, as more properties come on the market. Many residences are priced below the cost to build. "If you are looking for an investment to hold on to for the next five years, the time to purchase is now. We are still very undervalued compared to other regions of Florida."
The St. Joe Company (NYSE:JOE), whose corporate headquarters are in Jacksonville, FL, is the largest landowner in Northwest Florida, owning over 718,000 acres of prime development land -- half of it less than ten miles of the coast. St. Joe has been a large player in the Florida panhandle for a long time, starting out as a timber company but realizing in recent years that the value of its acreage was much greater as investment property. So now they're in the property development business, with major activity focused in Walton County.
According to St. Joe's Investor Relations Department the long-range prospect for Florida panhandle real estate is particularly upbeat.
Florida's Strong, Diverse Economy
- Long-term financial and demographic trends continue to favor Florida, whose economy is fundamentally strong and diversified. The state's population is expected to increase by three-fourths (to 28.6 million) by 2030. Its demographic growth rate regularly outperforms that of the rest of the country: over the past forty years, its annual rate of growth has outpaced the national average by 100%. By 2010 Florida will pass New York to become the country's third most populous state.
- Florida's strong, diverse economy routinely outperforms the U.S. average, with a vibrant tourism industry, lots of high-tech jobs and a strong high-tech manufacturing sector. A big military presence with a number of busy and growing bases provides stability to the area's economy. Within Northwest Florida, Walton County has one of the lowest unemployment rates in Florida and the United States.
- Florida is the strategic and economic center of the Americas. Geographic location, as well as financial and political stability, puts the State at the heart of trade and business throughout the region. Vacation property sales to retiring Baby Boomers are robust, and the State is a favorite spot for retirement relocation.
Growing Tourism
Beaches in Northwest Florida rate as some of the most spectacular in the U.S. and the world. Beaches in Walton, Bay and Gulf Counties have been chosen for the number one ranking by Dr. Stephen P. Leatherman, an expert on beach quality and author of America's Best Beaches.
The Florida panhandle enjoys a temperate climate, with mild winters, lots of sunshine and clear days. Northwest Florida lies in U.S. Climate Zone 8, the same climate zone as exclusive and highly successful vacation areas such as Hilton Head (SC), Amelia Island (FL), Kiawah Island (SC) and St. Simons and Sea Island (GA). Florida's beauty and diversity is well-known. The Florida panhandle has a distinctive geography, culture and cuisine that is unique.
Northwest Florida entertains approximately seven million visitors each year. According to Visit Florida, Florida's tourism and visitor department, 33 percent of these tourists are from households with incomes over $75,000 and 16 percent are from households with incomes over $100,000.
The number of elite resort communities in the Florida panhandle is increasing. At communities like Seaside, Rosemary Beach, WaterColor and WaterSound Beach, beachfront lots have sold for $40,000 per linear beachfront foot to wealthy individuals who have chosen Northwest Florida.
The new Panama City airport now under construction is projected to be in operation by first quarter 2010. It will be a major international airport, thus opening the area to easy access from the East and West coasts, the Midwest, Canada and Europe. Previously, access to the area by air was limited to regional airports.
Economists predict that the new airport will become a strong economic development engine for the region. Historically airports have a powerful track record for accelerating economic growth.
New Airport Will Boost Area
Economists predict that the new airport will become a strong economic development engine for the region. Historically airports have a powerful track record for accelerating economic growth.
The new Panama City airport will be the first major airport constructed in the country in over 15 years. As a large-scale greenfield airport development, it offers unique opportunities and tremendous flexibility for companies dependent on aviation and logistics infrastructure.
Examples of how airport construction stimulates business may be seen in Huntsville, AL, Savannah, GA, Jacksonville, FL, Fort Myers, FL and Northwest Arkansas. All of these airports have stimulated significant adjacent development.
The State of Florida projects that over its first ten years, the new airport is likely to create 8,000 new jobs and at build-out a total of 13,000 jobs. An important comparison is the building of the new Southwest Regional Airport in the Ft. Myers/Naples area in 1983, which had a huge impact on real estate values. Since the opening of the airport in 1983, total residential real estate values in the surrounding area have increased an average of 11 percent per year.
Long Range Forecast Is Strong
In the quickly changing economic climate, it is necessary to research and ask questions before making any investment choice. Yet the reality is that the Florida panhandle is a rare gem, with a delightful climate and stunningly beautiful, uncrowded beaches.
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