I recently attended the 2012 Economic Summit, a first-time event sponsored by the Naples Area Board of Realtors (NABOR). The panel of speakers included:

  • Lawrence Yun, chief economist and senior vice president of research for the National Association of Realtors
  • John Tucillo, a chief economist with Florida Realtors
  • Shelton Weeks, a real estate professor and director of the Lucas Institute for Real Estate Development & Finance at Florida Gulf Coast University
  • Doug Duncan, vice president and chief economist for Fannie Mae
  • Cindy Carroll, vice president and manager of the residential division at Carroll & Carroll Real Estate Appraisers and Consultants in Naples

The biggest nugget of news that came out of the Summit was the prediction by these economists that Naples home prices will appreciate by 10 percent by the end of 2012.

But here are some other interesting nuggets from the meeting:

  • We are at a 5-year high for monthly existing home sales outside of the tax credit period.
  • Sales are not as huge as they could be because people cannot get loans due to strict regulations.
  • There’s been an overall stable trend in home prices since the drastic fall in 2008 and 2009.
  • The United States is growing by 3 million people per year and we need housing to accommodate that growth. Small builders who would like to build and represent 80% of the construction market cannot get loans.
  • Housing starts in the U.S. are at their lowest since World War II.
  • Shadow inventory has been trending down. The so-called “tidal wave” is not developing, it is diminishing.
  • The financial industry has come “roaring” back; corporate profits are soaring. Most banks have plenty of cash to survive a period of distress, but they are not lending. They are uncertain about the legal environment as well as the lending regulation environment.
  • If banks returned to “normal” underwriting standards, home sales would likely increase 15% to 20%.
  • All cash deals are at a record high. Investors are concerned about inflation and as a result are buying real estate.
  • Every form of household wealth except home equity has been restored to pre-2007 levels.
  • The Florida population has begun to grow again.
  • Florida is the third fastest growing state in employment. Jobs have increased every month in 2011. It is more important to look at the number of jobs lost and created than the unemployment rate.
  • 225,000 private sector payroll jobs were added December 2011, January and February 2012.
  • Shadow inventory will be another property type for a few years to come but it will not disrupt the market.
  • January 2012’s tourist revenue was up 19% over January 2011 in Collier County; up 12% in Lee County; and up 24% in Charlotte County.
  • Pending sales in Collier County increased 14% first quarter 2012.
  • Inventory in Collier County decreased 13% first quarter 2012.
  • Overall median closed price in Collier County increased 27%.

“Everything happening in our market is very logical. We are recovering as we should,” said Cindy Carroll.

As Lawrence Yun pointed out, the potential positive is lending opens up. The potential negative is Washington policy.