UF economist: Real estate recovery has begun

TALLAHASSEE, Fla. – Sept. 14, 2009 – Speaking to real estate executives on Friday, UF research economist David Denslow predicts even better times soon as the baby boomers retire.

The comments came during the University of Florida Center for Real Estate Studies’ annual Real Estate Trends and Strategies Conference. In addition to Realtors and property managers, attendees included bankers, investors and other industry professionals.

According to Denslow, the U.S. is headed for a rebound, in part, because other nations invested in relatively-secure U.S. treasuries. However, he also issued a warning: That won’t happen the next time unless the U.S. gets a handle on the national debt.

Denslow also pointed to retiring baby boomers as a salvation for the Sunshine State. He sees that number fueling state growth for the next 15 years, though many boomers must first recoup some of their wealth lost during the recession before they can sell homes and move south.

Denslow also posed a question: If an influx of baby boomers boost the real estate market that trickles down to other industries, will Florida once again put economic diversity on hold?

Most experts agree that Florida must expand its job base beyond real estate and tourism if it wants to avoid roller coaster changes in the economy, but growth and an appeal to retirees could hamper that growth. Denslow says that the amenities preferred by retirees – good restaurants, the arts, extensive airline service – also appeal to professionals. But retirees don’t generally support other functions necessary for a diversified economy, such as good schools or better roads.

“But (how we handle that type of growth) is in our own hands,” Denslow said. “All that’s subject to how you, the Legislature and others guide us.”

Many attendees shared information about growth in their community. In Jacksonville, two new shipping lines will add about 50,000 jobs. In Central Florida, a new medical school, two hospitals, the Burnham Institute and a University of Florida research facility will add high-paying jobs. In Southwest Florida, however, retirees will continue to create service jobs and remain the primary engine of growth.

In the meantime, attendees were encouraged to expand and diversify to focus on existing business opportunities until the full economic rebound arrives.

Source: Gainesville Sun, Friday, Sept. 11, 2009, Anthony Clark