Money, Real Estate, and Preservation
A surging stock market, positive Dec. jobs reports, and anticipation surrounding the incoming President have sparked optimism throughout various sectors in the financial world.
Florida’s November employments figures revealed that the unemployment rate remains just under 5 percent (4.9). The sunshine state gained 29,600 jobs over the month, and throughout the year, have added 263,900 jobs. Monroe County has the state’s lowest unemployment rate at 3.2 percent.
The industries that have been the biggest creators of jobs are the professional and business services sector, education and health services sector, and trade, transportation, and utilities sectors. But what does this all mean for Monroe County residents?
President and CEO of First State Bank Karen Sharp, says the Keys economy has stabilized over the last several years.
“We do not see any reason for that stability to change in the coming years. The Florida Keys remain one of America’s most attractive destinations,” said Sharp.
First State Bank will continue its commitment to Monroe County growth through a range of services that includes paying the highest rates on customer deposits in the marketplace, and financing the community’s economic growth says Sharp. While there is an expectation of fiscal deregulation for commercial and investment banking, Sharp anticipates those changes will come very slowly.
Lenders, such as banks and credit unions, rely on interest rates, amongst other factors, to compete against each other. Federal Reserve Chair Janet Yellen anticipates interest rates to rise three times in 2017. Along with that expectation comes an increase in mortgage interest rates, due to the Fed’s portfolio containing a large portion of mortgage-backed securities.
But how indicative is the real estate market of the economy’s health?
“It is certainly reflective of it,” says Brian Schmitt, co-owner of Coldwell Banker Schmitt Real Estate Co.
Schmitt says that a good indicator of the market are listings and sales, which simply translates to the number of buyers and sellers. While the Florida Keys real estate market has seen more listings and less sales in 2016 compared to the year prior, the average sale price has increased throughout the Keys.
The sale prices’ largest contributor has been the luxury market – which Schmitt says is generally defined as properties priced at a million dollars or more.
“The luxury market, the healthiest portion of the market, drove prices because of the disproportionate number of higher end homes on the market,” Schmitt said.
While prices are up, Schmitt says there has been a tapering off and slowing of the market caused by a lag in supply and demand calculations.
“If you go back and look at what happened after Hurricane Wilma, you’ll see that prices continued to rise, even though the number of sales plummeted and listing sky rocketed. Prices continued to rise into 2006.”
Another factor to consider in the Keys real estate market is the expected 8.9 percent increase in windstorm insurance rates. Schmitt says that premiums that have been added to reflect additional risk to pre-FIRM houses are dramatically higher, and are having an impact on the desirability of those homes.
Just as important as beginning new business ventures is protecting current assets and investments. Florida House Representative Holly Raschein, who was recently named chairman of the Natural Resources & Public Lands Subcommittee, sees ecofriendly initiatives as pro-growth investments worth considering.
Representative Raschein says the budget at the state level is going to stall, with relatively small surpluses. That hasn’t stopped her from pursuing funding for to help keep Monroe County properties and business prosperous.
“I’ve submitted requests to fund the Florida Keys Stewardship act, which will impact our water quality. We’re owners of a national gem, preserving and investing in that is the right thing to do,” said Raschein.
Raschein says Florida’s Congress will decide on her request during the 2017 Legislative Session beginning on March 7. Among other appointments, Raschein was also chosen to the Tourism & Gaming Control Subcommittee. She believes tourism in the Keys will continue to flourish in the up-coming future, despite this past year’s issues with Hurricane Matthew and Zika.