Naples Area Board of REALTORS® Economic Summit Experts Discuss Migration and Regulatory Patterns

NAPLES, FL – More than 300 REALTORS®, real estate professionals, and local leaders interested in the economic health of Collier County and its effect on the local real estate market attended, either in-person or virtually, the Naples Area Board of REALTORS® (NABOR®) ninth annual Economic Summit, “A View from the Top,” on Tuesday, September 7, 2021, at the Hilton Naples. Three top economists provided a qualitative look into factors affecting the economy and shared their analysis of influencers affecting growth and home sales activity in the near future.

The data-filled hybrid event began with a welcome message from NABOR® President Corey McCloskey followed by remarks from event sponsor B.J. Cottrell, who is managing partner of the FIRPTA Group. Long-time Summit moderator Jeff Lytle set the tone of the day by assuring attendees that they would hear answers to questions about the pandemic’s impact on the economy and whether it will continue to influence the housing market.

First to take the stage was Dr. Brad O’Connor, Florida Realtors®’ chief economist and head of its Industry Data and Analysis department. After giving a comparative overview of Florida and local housing activity, Dr. O’Connor revealed that data showed the luxury home market in Florida has improved more than other price segments in the last year. He then referred to data from the United States Postal Service (USPS) which showed New York had the highest number of residents who relocated their permanent address to Florida in 2020. The USPS data also revealed new residents came from mostly urban cities and boroughs like Manhattan, Chicago and Boston.

Dr. O’Connor’s presentation included an historic perspective of pricing data. “Prices have not gone down in 10 years in Florida. But, while the median closed price for single family homes appears to have plateaued in the last few months, condominium prices have continued to rise.”

Dr. O’Connor added that, “If all the homes currently in forbearance in Florida were on the market, we would have eight-months of inventory.” He was quick to assure the audience that the current home default situation does not have the same qualities as what happened 10 years ago because of tighter lending rules.

Presenting virtually, Dr. Lawrence Yun, the chief economist for the National Association of REALTORS® announced that the “work-from-home” trend will outlast the pandemic and predicted it will also continue to have a big influence on where people choose to buy a home in future years.

Because America is experiencing a home supply shortage, Dr. Yun pointed out that rents have increased 8 percent over the last year. He also predicts rents may continue to rise because home prices are also expected to continue to increase due our inability to meet demand. In fact, he said, “One year ago home prices were 20 percent lower, so some buyers are getting priced out today.” Dr. Yun also revealed that for these future buyers, rental payment history will be used as a factor to qualify for a mortgage.

Dr. Yun predicts home prices will continue to rise 5 to 10 percent in Florida, and possibly up to 20 percent in the Naples area.

Last to present at the Summit was Dr. Elliot Eisenberg, a national economist and acclaimed speaker who was the former senior economist with the National Association of Home Builders. Dr. Eisenberg, whose presentation style injects humor into an often-mundane topic, made it unequivocally clear that “the above trend growth will continue through next year”. He showed several graphs that identified consumer behavior activity during the pandemic including how retail sales spiked when everyone was in quarantine, and how the services sector is expected to overtake retail consumption as a preferred way to spend money now that consumers are becoming less timid to leave their homes.

Dr. Eisenberg said, “Under normal conditions, when you exit a recession, supply and demand go up together. But not now.” That’s because demand has skyrocketed as people are hungry to return to pre-pandemic consumer behavior, but the pandemic’s influential grip caused all production to stop – for both the retail and service sectors – and production can’t keep up.

Dr. Eisenberg said the stock market provided a 10 percent return annually, on average, over the last 10 years, but predicts the average return may temper to around 5 percent annually over the next 10 years. Of importance to REALTORS® he said, “Household balance sheets are spectacular. We want to spend and consume and do, it’s just that we can’t get people to make [goods] and service [our needs]. However, when the [pandemic] recession began, we were forced to stay at home and it created forced savings. As a result, this forced savings allowed many people to save $25,000, which is why we saw an increase in first-time homebuyers in 2021.”

In conclusion, Dr. Eisenberg said he does not anticipate the Federal Reserve will raise rates until late 2022. However, he warned that we need to keep an eye on housing because “if rents continue to rise, it will drive the inflation numbers up and the Fed may be forced to raise rates before it wants to.”

The Economic Summit is a collaborative effort of the NABOR® Board of Directors, Media Relations Committee, and the Economic Summit Task Force under the leadership of Rick Fioretti, Economic Summit Committee chair.

NABOR® would like to thank its event sponsor The FIRPTA Group, technology sponsor Supra, program sponsor Stuart Kaye Homes, media sponsor SWFL Home Inspections, reception sponsor DR Horton, as well as table sponsors: Gulfshore Insurance, Law Offices of Sam Saad III, Honc Industries, Old Republic Exchange, The National Association of Hispanic Real Estate Professionals (NAHREP), Women’s Council of REALTORS®, and Keep Collier Beautiful.

NABOR® is located at 1455 Pine Ridge Road in Naples. For additional information on the Economic Summit, contact Marcia Albert at (239) 597-1666.