Light at the end of the economic tunnel?
Hope may break through the drab economic storm that has covered Southwest Florida for the last two years following an analysis by BizJournals indicating that the Cape Coral-Fort Myers area has the greatest potential to bounce back from the recession.
After analyzing five years worth of data from metropolitan centers across the United States, BizJournals determined that Cape Coral has the potential of gaining some momentum over other flailing cities due to its record of continual population growth.
The city was ranked third out of the top 100 metropolitan locations with potential. It had a growth score of 30, as compared to Raleigh, NC, at 31 and Las Vegas at 38.
“I hope we are No. 2 and 1,” said Mayor Jim Burch. “We have an infrastructure system that is state of the art and now we have affordable homes. That is a very desirable element to come into.”
From 2000 to 2007 the city population ballooned from 102,286 to 167,572 with a median age in the 40s. For the study, BizJournals looked at population, private sector employment, per capita income and gross city product to determine a growth score, according to its published story.
While downtrend cities like Detroit, which scored last place in the study, continue to experience a mass exodus of jobs and citizens, locations like Cape Coral and Las Vegas will continue to see high population growth even in a poor economy, the article states.
It’s these trends that may help the city fend off the devastating effects of the economy by allowing the dormant construction industry to awaken.
Patti Schnell, executive director of the Cape Coral Construction Industry Association, explained that the most pressing issue is dealing with the abandoned and foreclosed homes, an inventory that spiked when the bottom fell out.
“I do hear from my builders that there are empty houses selling,” said Schnell. “It looks bleak because we aren’t building a lot of new stuff.”
Home prices are at a record low and demand by prospective homeowners remains high. Once the inventory is sold off, she said, further demand will allow the construction industry to begin taking on projects. This will create jobs and decrease Lee County’s near 10 percent unemployment rate.
“We have people buying houses. If you are going to buy a home now is the time,” said Schnell. “We will all be fine if we can get through 2009.”
Nationally, the unemployment rate is 6.7 and the Associated Press reported that 533,000 jobs were eliminated last month by financially-strapped employers. These are worst rounds of job cuts in 34 years.
Real estate expert Gary Tasman, executive director of Cushman and Wakefield in Fort Myers, said that Cape Coral’s continued population growth will make it stable once again.
“Our salvation in Cape Coral is the continued population growth,” said Tasman. “We led the country into the housing bust and I believe we will lead the country out.”
The mortgage industry also will have to stabilize after countless foreclosures and delinquencies.
Nearly 10 percent of all U.S. mortgages are in a stage of foreclosure, he said, but the problem is being dealt with.
“The interesting thing about our economy is our resiliency as it relates to selling houses,” said Tasman. “We are going to rebound and maintain our growth spurt because of the availability of inexpensive homes, low cost labor and the quality of life.”
Officials with BizJournals concerning the story could not be reached for comment Friday.