Businesses are scarcely hiring, banks are scarcely lending and consumers are scarcely consuming. So it's probably no surprise that Tampa Bay builders are scarcely building.
Tampa Bay housing starts spiraled to a new low in 2009. Builders broke ground last year on 3,545 homes in Hillsborough, Pasco, Pinellas and Hernando counties.
That's an 83 percent dive from the 21,438 housing starts in the supercharged real estate year of 2005. The previous low was 4,721 in 2008.
The numbers were compiled by Tony Polito, housing consultant with Tampa's Metrostudy.
"We've been here since 1986, and this was by far the lowest housing start total since then," Polito said Monday.
The end-of-the-year news wasn't all bleak.
Piggybacking on the government's $8,000 first-time home buyer tax credit, Tampa Bay builders ended the year with a flourish, selling 1,342 new homes in the final three months of the year. Some builders whispered a word not uttered for years: profit.
The credit requires a contract be signed by April 30 and a closing by June 30. The deadlines limit the credit's future usefulness to builders, who require at least a couple of months to complete a house.
Steve Kempton, west Florida president for Taylor Morrison Homes, vouched that the tax-credit fueled a sales pickup in late spring/early summer. Among Taylor Morrison's Pasco and Hillsborough communities: Connerton, Stonebriar, Avelar Creek and FishHawk Ranch.
"We had a fantastic May, June and July in Hillsborough and Pasco," Kempton said. "The sweet spot was homes under $200,000."
Polito predicted 2010 would be "marginally better" than 2009. Starts will probably rise by 300 to 500. But Tampa Bay's 12.3 percent unemployment rate is doing builders no favors. It's hard to select floor tile and kitchen cabinets when you think you might be one paycheck away from a layoff.
"All this is smoke and mirrors if we don't get job growth," Polito said.
At a Tampa Bay builders breakfast last week, Polito pointed a way forward for the Florida housing industry. Despite the rotten returns in 2009, sales rose for one category of new home: those priced below $150,000.
That suggests to Polito that empty-nester baby boomers, the first cohort of which is reaching retirement age, will prefer smaller homes. The same goes for so-called "echo boomers," the children of baby boomers buying their first homes in their 20s and 30s.
"Unfortunately it's going to be a 10-year period with less demand for 3,000-square-foot homes," Polito said. "The youngest baby boomers, who are 46 this year, have probably bought their larger, move-up houses already."
Mortgage borrowing remains a problem. Many buyers can't access the record low, 4.8 percent interest rates because of down payment requirements. If you don't snag an FHA loan — 70 percent of the market — banks want 20 percent down.
"We cannot have capitalism without capital," Polito said.
That has forced builders to slash prices. Taylor Morrison, for example, is selling 1,300-square-foot stand-alone houses in Ruskin's College Chase neighborhood for $99,000, a price not seen in about a decade.
After the price bloat of 2006, Tampa Bay homes are again cheaper than North Carolina's. That might help steer retirees back to a Sunshine State many abandoned because it was too expensive.
The Tampa Bay housing market also continues to whittle down its surplus of unoccupied new homes. By the end of 2009, vacant new homes totalled 1,931, down from 2,665 a year earlier.
The new homes also have to compete with a huge volume of existing homes for sale — 28,000 at last count around Tampa Bay. That so many of those homes belong to people struggling with their mortgages only makes things worse.
"I would settle for prices picking up just a little bit this year," Kempton said. "I think we've got a whole other year to bleed through all these short sales and foreclosure homes."