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Hernando County can't build its way out of housing glut

Realtors will tell you the estimated value of individual homes on Zillow.com can be wildly off the mark.

But the site is better at measuring housing values for entire markets and can be especially useful in comparing the worth of one community's housing stock with another's.

Which is why we should pay attention to its recent report of stunning declines in Hernando home values and what it says about the local economy:

We still have a glut of houses. And despite last week's recommendations from the county's Business and Economic Development Committee, giving impact fee relief to promote more building is the last thing our economy needs.

"This market is not going to clear up until we rid ourselves of excess supply," said Chris Lafakis, the Moody's.com economist who analyzes the Florida real estate market. "Any increase of building not met with a corresponding increase in demand will prolong the period it takes to stabilize home prices."

Got that? Giving breaks to builders to construct houses we don't need will only make things worse.

Okay, on to those numbers from Zillow.com, which are based mostly on recent sales and the company's own "Zestimates" of home values.

The worth of houses in Brooksville fell 43 percent in the year ending June 30, the steepest decline of any city or neighborhood in the Tampa Bay area and almost double the area's overall drop of 21.6 percent.

Of the 109 nearby cities and neighborhoods covered by Zillow.com, eight of the 10 with the most dramatic declines were in Hernando, including: Spring Hill, 28.6 percent; Ridge Manor, 30.4 percent; Masaryktown, 33.8 percent; Hill 'n Dale, 37.1 percent.

Yes, these numbers may be high, considering, for example, that the Hernando County Property Appraiser's Office found the value of single-family homes fell an average of 15 percent during 2008.

Still, Zillow.com's findings fit a national trend — that housing on the fringes of metropolitan areas is losing value faster than in urban cores, Lafakis said.

These outlying areas saw proportionately more speculative buying during the boom, Lafakis said, meaning more inflation and, when the bust came, more foreclosures. Also, last year's bump in gas prices left a lingering fear of long commutes.

Nobody wants to hear more bad news about housing, but the obvious economic message here — that we need to break free from our over-dependence on residential development — doesn't seem to be sinking in with some of our county commissioners.

Why not? Well, soft money contributions and independent advertising campaigns by Realtors or builders, notably Blaise Ingoglia, helped elect development committee members John Druzbick and Jim Adkins to the County Commission last year.

Judging by a recent fundraiser for Commissioner Rose Rocco, hosted in part by Tommy Bronson and Tom Barnette — who in 2008 contributed to the campaign to defeat Diane Rowden — we can expect more of the same influence in next year's election.

And at this point in the county's history, to paraphrase the old saw about General Motors, what's good for the housing industry is not necessarily good for the rest of us.

Hernando County can't build its way out of housing glut 08/22/09 [Last modified: Saturday, August 22, 2009 9:58am]
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