The increase in homebuilding has obviously not been enough to meet the demand for Charlotte County's growing population and the replacement needs from folks displaced by Hurricane Charley. As a result, the demand for existing homes has remained exceptionally strong. Sales have averaged a record 4,100 unit pace during the ten months following hurricane Charley. Prices for existing homes have surged 34 percent over the past year, to $236,600. While that is still affordable by Southwest Florida standards, it marks a huge change for the region. The median price of home in Charlotte County is now 12 percent higher than the national average. Five years ago, the median home sold for one-third less than the national median.
The rapid increase in housing prices during the past five years is changing the complexion of Charlotte County's economy. The region is becoming a less attractive destination for middle class retirees and is instead rapidly becoming a bedroom community for workers priced out of Fort Myers and Naples. Retirees will still account for a large proportion of the region's growth, however. A larger share will opt for detached single-family homes and townhouses.
Sarasota-Bradenton-Venice-North Port
Strong job growth, an influx of new businesses, and a continuous tide of well-to-do retirees and visitors/part-time residents from overseas have sent Sarasota's housing market into overdrive. Permits for single-family homes in Sarasota and Manatee counties have surged 18.3 percent over the past year, to a record 10,900-unit annual pace. Permits for condominiums, townhouses and apartment have risen 17.1 percent, to around 3,000 units. A total of 49,500 homes of all types have been built in the past five years.
New construction is barely keeping pace with demand. Sarasota and Bradenton have added 71,000 new residents over the past five years and 31,000 new households. When you take into account the growing trend in homeownership and the strong demand for second homes and vacations properties, there was demand in place for slightly over 50,000 homes over the past five years. With the supply of homes lagging behind demand, prices for existing homes have soared. The Florida Realtors Association data show the median sales price of an existing home soaring 32 percent over the past year to $333,900. The cumulative increase over the past five years is a whopping 134 percent.
Sarasota and Bradenton have a strong economic foundation. Nonfarm employment has risen 4.7% over the past year, and the unemployment has fallen to just 3.0%. Growth is being driven by a diverse mix of industries, including business and professional services, health care, and the leisure and hospitality sector. Sarasota and Bradenton have also been successful at landing several major relocations and expansions in recent years, and have a strong base of headquarters and professional services firms.
Residential and commercial development is rapidly spreading to the eastern portions of Manatee and Sarasota counties and also to the southern portion of Sarasota County in the town of North Port, located near the Charlotte County border. The driving force is the availability of land and more developer-friendly zoning. North Port has seen its population surge more than 50% over the past four years, adding just over 12,000 residents. Growth will likely remain strong in coming years, as a large proportion of the land currently approved for new residential development in Sarasota County is in North Port. Moreover, office and retail development is following the influx of new residents, making the area even more attractive for potential new residents.
Jacksonville
Jacksonville is another historically affordable market that has seen significant price gains in recent years. The median sales price of an existing home, which historically had averaged around 75 percent of the national median, has surged 81 percent over the past five years to around $190,000 today. That still leaves Jacksonville as a relative bargain compared to Florida's other large metropolitan areas, and is also the lowest home prices of any large metropolitan area along the East Coast.
Housing affordability has been one of Jacksonville's largest selling points, and has enabled the city to attract a number of notable corporate relocations and expansions in recent years. The five-county Jacksonville area has historically had an abundance of land available for residential and commercial development, with most of the activity confined to the southern portion Duval County and the Beaches communities. Strong population and employment growth in recent years has changed this somewhat, driving values up in Duval County and sending more development across into northern St. Johns County and northern Clay County.
Economic conditions remain very favorable. Nonfarm employment has increased 2.8 percent over the past year, with solid gains in financial services, wholesale trade, construction, and health care. The port has always been an important component in Jacksonville's success and is making an increasing contribution of late. Mitsui O.S.K. Lines Ltd. recently announced plans to work with the Jacksonville Port Authority to develop a $200 million 158-acre shipping terminal at Dames Point. The facility will vastly increase port traffic and likely lure new industries to the city's north side.
Job and income growth has set off a wave of in-migration. The five-county metro area has added 125,000 residents over the past four years, which has added over 45,000 new households to the Jacksonville area. Builders have done their best to keep pace with demand. A total of 56,000 single-family homes were built in the past five years, and more than 17,000 townhouses, condominiums and apartments were completed. As fast as these homes were built, however, buyers have snatched them up.
In our view, Jacksonville will continue to enjoy solid employment and population gains in coming years. The area remains an attractive location for customer services centers, mortgage companies and insurance firms, and regional and national headquarters. Transportation and distribution is another growth industry. We expect residential development to continue to spread out into the surrounding area, including the north and west sides of town, where property is even more affordable. With more land opening up to development, housing prices should rise more modestly in coming years.
Pensacola
Pensacola's economy has managed to post solid gains, despite having to deal with direct hits from two hurricanes in the past year. Last fall, Hurricane Ivan destroyed more than 7,000 homes and damaged thousands more. Damages to the Pensacola area both insured and uninsured totaled nearly $4 billon. The area has recovered remarkably well but was dealt a set back recently when Hurricane Dennis came ashore in Santa Rosa County. That storm destroyed another 900 homes in the Pensacola area and damaged thousands more.
Throughout all these travails, Pensacola still managed to eke out solid economic gains. Nonfarm employment has increased 1.8% over the past year, producing a net gain of 2,900 new jobs. The unemployment rate has fallen to 3.9 percent, which is about a percentage point lower than it was the month before Ivan hit. Not surprisingly, some of the strongest gains have been in the construction sector. Most of the work so far has been for repairs to infrastructure and homes. There is still quite a bit of rebuilding to be done, particularly along the beach.
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