Wednesday, September 19, 2018
Business

DeWitt: Sales figures indicate growth in Hernando, for good and bad, is on the horizon

A decade after the peak of the boom, the Hernando County real estate industry appears to be fully and finally over the bust.

We haven't yet returned to the land of rapid growth. But it's close enough that we can see it from here, close enough that we can start thinking about how to grow smarter this time around — which really shouldn't be that difficult.

The median sale price of a house in Hernando climbed a robust 9.1 percent in November compared to the same month a year ago. Also up during that period were the volume of home sales and the number of listings in the pipeline.

Meanwhile, the average time houses spent on the market fell by 36 percent, an indication of surging demand.

It's to the point that the main complaint about the market is one that hasn't been heard for a decade.

"Inventory still needs to increase, but everything else is looking good," Barry Stafford, executive vice president of the Hernando County Association of Realtors, wrote in an email accompanying the November statistics, the most recent available.

There were only 1,339 homes on the market at the end of November, or enough to last about 3.6 months; six months of inventory is considered ideal.

Some Realtors say they don't want the market to get much hotter, for fear of creating another bubble.

"If I could dial up a perfect market, I'd love for us to continue doing what we're doing," said Brooksville Realtor Gary Schraut.

What's happened?

Basically, things have been good enough for long enough in the counties to the south that the prices there are driving buyers to consider homes in Hernando.

Chuck Morton, owner of Coastline Realty Services in Weeki Wachee and last year's president of the Association of Realtors, deals mostly with homes in Hernando Beach.

"You look at our waterfront property as opposed to anywhere else in the state, and we've got some real bargains," Morton said.

The continued large number of cash purchases — 53 percent of sales in the county in November — is an indication not of investors, as it is sometimes interpreted, he said, but of the type of buyers who traditionally have flocked to Hernando: people from the North or from counties to the south, many of them retirees, who have sold higher-priced properties to move to Hernando.

But there are also signs the county may be developing a steadier pool of purchasers: local workers with enough money to buy rather than rent.

The county is still far too dependent on poorly paying retail and service jobs, said Dave Hamilton, operations manager for the Pasco-Hernando Workforce Board. But the most recent labor statistics show a recent uptick in higher-paying construction jobs and a long-term rise in the manufacturing sector.

The number of construction workers, which dropped from a high of more than 11 percent to 5 percent of the labor pool in the aftermath of the recession, has recently accounted for more than 6 percent of the county's employees.

In 2005, factories employed about 1,100 people in Hernando. As of the end of June, the most recent month for which statistics are available, that number had climbed to almost 2,000.

Even the market for new homes is overcoming the obstacles that stalled it for years.

Short sales for houses on the road to foreclosure were long blamed for driving down prices to the point that new homes couldn't compete. These cut-rate deals are now almost a thing of the past, and the average sale price of a home in Hernando County in November was $131,446.

The number of permits the county issued for new homes in the past year, 402, is still far from boom-time numbers. But the low and aging inventory of homes on the market indicates it should start to grow rapidly.

We probably don't yet have to think about high density and mixed use and all of the other long-forgotten — and, in Hernando, generally ignored — concepts designed to reduce sprawl.

But we should start thinking about impact fees. If the ongoing suspension of the fees charged for roads and schools is lifted on March 1, as scheduled, county commissioners probably will tell you they already have.

Not really. The fees have been reduced to a fraction of the true impact of every new home built in the county — less than one-third of the cost of a school to house new residents' children, a mere 22 percent of the price of the space they will occupy on the roads.

Looked at another way, every new house that goes up puts us $4,499 further behind in road-building costs.

Which is not at all a smart way to grow.

Contact Dan DeWitt at [email protected]; follow @ddewitttimes.

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