by Mike Sharkey
Staff Writer
The hundreds of residential and commercial real estate agents who attended the First Coast Real Estate Economic Outlook Conference on Tuesday probably left with mixed emotions.
Economist Hank Fishkind said the worst of the current recession is yet to come, while Mayor John Peyton insisted the long-range outlook is good, especially based on the current activity and growth potential at the port.
“There are no two ways around it — this is a significant recession,” said Fishkind, president of Fishkind & Associates, which specializes in real estate analysis and its effect on the overall economy. “There is full-fledged economic panic.”
Fishkind puts the blame on several factors including high energy prices and a housing market in a tailspin nationwide.
“We are in the midst of a major housing correction not seen since 1986 through 1992,” he said. “There will be a relatively slow recovery.”
According to Fishkind, there’s an end to the tailspin, but those involved in both commercial and residential real estate will have to be patient. Using housing starts as a primary indicator, Fishkind said the overall recession will “bottom out this year.” However, it won’t be until the fourth quarter of next year that the housing market bottoms out and slowly starts to recover over the next two years.
While Northeast Florida isn’t immune to the recession, Fishkind did say its non-real estate-based economy keeps the area more insulated than other parts of the country. The area’s banking, insurance and “back office” industry helps negate some of the real estate slowdown. At the same time, once the economy does start to turn around in a couple of years, Fishkind said the Northeast Florida area won’t immediately notice the positive changes.
“It takes time for the national economic recovery to affect this area,” he said, adding that Jacksonville is still better off than other parts of the state where growth is virtually stagnant. “Compare Jacksonville to Fort Myers or Naples. They don’t build new roads there.
“The housing market will be better in 2009 and better still in 2010.”
Peyton called the current economic climate “interesting times” and put part of the blame — and potential serious future budget issues — squarely in the laps of lawmakers in Tallahassee who insist on leveling the taxation playing field across the state.
Peyton said the high millage rate and subsequent high property values in South Florida are dramatically affecting how state lawmakers view the North Florida area, Jacksonville in particular.
“South Florida has a legitimate revenue problem,” said Peyton. “We have the lowest millage rate in Florida. The average home in North Florida is $160,000 while the average home in South Florida is $360,000. That’s a huge discrepancy. We have been running at bare bones to provide services.”
Over his last 39 months, Peyton said he intends to focus on public safety and the local economy. The port, he said, will play a vital role in the North Florida economy over the foreseeable future.
Peyton’s recent trip to China with members of the Jacksonville Regional Chamber of Commerce and other elected officials and business leaders served to reaffirm that notion. He said when the Panama Canal widening project is complete in 2015, the Jacksonville port will quickly become the third biggest on the East Coast.
“This is big, big news,” said Peyton, who also visited Japan with Jerry Mallot, executive vice president of the Chamber, to begin initial trade talks that could come to fruition in the middle of the next decade.
Peyton said the only way to take full advantage of the port’s potential is to build the infrastructure around the port to haul cargo and utilize Cecil Field as a potential distribution center for the entire Southeast.
“My concern is a failure to in-vest has long-term damaging ramifications. We have to invest in road infrastructure,” he said. “I think we are at a pivotal time in our history.”