Commission's tricky task: prodding Hernando economy

Economist  Hank Fishkind  told county officials that the local housing crisis has hit bottom.

Economist Hank Fishkind told county officials that the local housing crisis has hit bottom.

BROOKSVILLE — When Orlando economist Hank Fishkind told county commissioners last month that Hernando's housing crisis had hit bottom, observers heard different messages.

On the one hand, the assessment confirmed what many feel in their own wallet. Things are abysmal.

On the other, the situation can only get better.

Still others wondered how Fishkind could say that Hernando County's stagnant housing market and flagging economy could finally be evening out when so much is uncertain.

"From Fishkind's mouth to God's ears,'' said Spring Hill real estate agent Jeanne Gavish, who worries that every recent prediction of a looming recovery has been met with a new curveball shoving the market still deeper.

"Just when we think it's turning around, sure enough something else comes along from out of the blue, something that has never happened before,'' Gavish said. "We keep saying, 'Can we exhale yet?' ''

On Tuesday, county commissioners will be talking about what they can do to provide the spark needed to help stimulate the community's economy, which is heavily dependent on the housing market. One idea is to lower the county's impact fees — one-time charges on new construction that pay for infrastructure — by 25 percent for the next 18 months. That would allow Hernando to gain access to a pool of $20-million set aside by state legislators this year for affordable housing initiatives.

Proponents say this program would help get the economy moving by helping first-time home buyers get into a house and would help reduce the county's home inventory, which stood at 3,595 single-family homes as of late last week.

The added plus would be the encouragement of new home construction with lower impact fees.

Other ideas to help the building industry — plus new incentives designed to pull in new businesses, manufacturers and industries — are also on the table.

Commissioners will use the information provided by Fishkind as they make their decisions about what role county government should play in pumping up the economy.

Even as Fishkind was finishing up his recent presentation, Commissioner Dave Russell said that what he heard from Fishkind is what he is hearing from the community.

"He called it bouncing along the bottom,'' Russell said last week. That meant small peaks and valleys in the economic indicators that track along a flat baseline. In a free-market economy, that's good news, Russell said. "It gives some stability to the market.''

Russell likened it to the fear of gas prices continuing to rise without a plateau. But now prices seem to have peaked, leaving a greater feeling of certainty. He points to national statistics that show a slight improvement in the most recent consumer confidence numbers.

"There is a significant mind-set that if you feel things are getting better, things do start to get better,'' he said.

• • •

Alvin Mazourek, Hernando County's property appraiser, doesn't know whether the housing market has bottomed out. His office doesn't analyze the economic factors. Fishkind based his conclusions on a variety of factors, including the sales prices of new and existing homes as well as the number of home sales.

Anecdotally, Mazourek still sees values slumping, and he warns that efforts to put a positive spin on what lies around a blind corner might be coming from ailing real estate businesses.

"Everyone is wanting to say something positive,'' Mazourek said.

He said he has seen plenty of economic forecasts and they don't agree on when the economic slide will stop and when all the factors will begin to move back up.

"It's hard to have a crystal ball,'' he said.

What is certain is that the news right now is bad. In June 2007, Mazourek's office recorded 319 sales of improved property for a total value of $57-million. For June of this year, 186 sales were recorded for a total value of $30-million.

Of Fishkind's optimism that the bottom has come, Mazourek said: "We don't show that, but I hope he's right.''

Grant Tolbert trusts Fishkind's skills. As the county's development services director, he needs good economic data each year to plan his budget, and he has used Fishkind for years.

Over 30 years in the development business, Tolbert said he's seen the ups and downs in the market.

"This one has been extreme. It was so high when it was good, and it's so bad when it's down,'' he said.

"I think we have bottomed out and the market will start a very slow process of climbing."

Real estate agents have told Tolbert that once people begin pricing homes where they would have been without the value spikes of two years ago, homes will start moving.

"As soon as consumers see that — that values are steady — they will get their confidence back,'' he said.

County Commission Chairman Chris Kingsley said he bought into Fishkind's assessment of the housing market bottoming out. There had been predictions that when the bottom came, the statistics would take on a "V" shape, showing a plummet down and then a sharp turn back up.

Instead, Kingsley said, "we're languishing at the bottom of a 'U.' ''

"It's bad that it's bad, but it will go up,'' he said.

• • •

Dudley Hampton Jr., president of the Hernando Builders Association, has a front-line view of how the housing market has tanked.

"Have we hit bottom? How do you know when a dead body is dead?'' he asked. "It's been pretty bleak, and if you're not building anything you've hit bottom. If you're building one or two houses, it's pretty bad but you're not at the bottom.''

In June, Hernando County's Development Services Department recorded just 31 permits for single-family homes, down from May's 43 and June's 42. But the numbers were even lower in February and March, when just 27 and 30 were recorded, respectively.

That's down from monthly numbers in the 70s last spring and summer and a whopping 149 in January 2007.

"I'm taking jobs that I would have never taken two years ago,'' Hampton said. "It keeps the lights on. It keeps the bills paid. It keeps people working.''

If Hernando's economic slide has hit bottom, Hampton said, "you still have to have some stimulus to get it started again.''

He supports the proposal to lower impact fees and gain access to the state's pot of affordable housing money, saying that it will allow some of the existing inventory of homes to be sold. But he is willing to hear other ideas as long as they give the economy a kick.

"I don't know if reducing the impact fees is the right answer, but if there is a right answer, maybe we'll hear it on Tuesday,'' Hampton said.

Gavish, the real estate agent, runs classes for new real estate agents and mortgage brokers, and she tells her students that now is a significant time with all the factors combining to pull the housing market to such a low point.

"We're living in history,'' she said. "It's being made right now, and we can't know what tomorrow brings.''

Barbara Behrendt can be reached at behrendt@sptimes.com or (352) 848-1434.

Commission's tricky task: prodding Hernando economy 08/02/08 [Last modified: Monday, August 4, 2008 3:12pm]

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