Economist: Tough times to linger longer in Tampa Bay area

As the rest of the United States starts recovering this year from the Great Recession, a job-shedding, home-sales-sapping and foreclosure-boosting shadow will continue to hover over Tampa Bay.

That was the gray forecast of Florida economist Hank Fishkind, who spoke Wednesday to dozens of real estate lawyers in Tampa.

Despite some limited success from government stimulus spending and a return to nationwide economic growth in late 2009, Tampa Bay will remain a laggard. Let Fishkind count the ways:

• The region produced record low housing starts of 3,500 in 2009. Could 2010 be worse? Fishkind thinks so. He predicts home construction to bottom this year, dragged down by lack of population growth.

• Real estate foreclosures should continue to swell through 2010, the crisis not dissipating until 2011. Last year, 62,000 Tampa Bay properties got foreclosure notices. Fishkind said many funny-money mortgages have yet to work their way through the system.

• Tampa Bay lags the rest of the state in employment and should continue to shed jobs through most of 2010. While jobs should trickle back in 2011 in Pasco and Hillsborough counties, unemployment could rise in Pinellas next year.

• Land prices will come "back down to earth." Despite Tampa Bay home price declines of 40 percent, prices for undeveloped land have yet to correct. That should happen this year. Developers just aren't buying much raw land, and banks refuse to finance such purchases.

"We've got some tough sledding over the next 6 months," Fishkind told the lawyers, members of the Bay Area Real Estate Council, which gathered for lunch at Maestro's restaurant in the Tampa Bay Performing Arts Center.

Even Fishkind's longer-term economic predictions weren't anything to inspire hallelujahs. Just when Tampa Bay's housing industry regains its legs, higher interest rates could appear. Fishkind assumes the Federal Reserve, which has been pumping the economy with more-or-less free money, will have to suck up much of that stimulus to avoid inflation. You can say goodbye to 5 percent, 30-year fixed mortgages. "Mortgages will be north of 8 percent when we get to 2012," Fishkind said.

Few of the real estate lawyers in attendance seemed surprised at Fishkind's weak-to-mixed forecast. Foreclosure defense has become a big part of business for many of them.

"We're still hunkering down," Tampa lawyer Scott Fitzpatrick said.