ESTERO — Amid the clouds outside, speakers at the Bonita Estero Market Pulse at Florida Gulf Coast University had a mission Friday — to create sunshine inside.
Their version of sunshine included data-packed presentations about the improving local and regional economies.
The keynote speaker, president of the Federal Reserve Bank of Cleveland, offered a perspective of the U.S. economy, drawing national media from Reuters and Bloomberg.
"We've graduated to a world stage," boasted Joe Murgalo, board chairman of the Bonita Springs Area Chamber of Commerce, organizer of the event.
The breakfast event, in its eighth year, attracted 260 people, including Florida Gulf Coast University students studying business, economics and finance. They heard bright news about the economic recovery locally, regionally and nationally, but that was tempered by clouds of uncertainty.
Gary Jackson, an economics professor and director of FGCU's Regional Economic Research Institute in Estero, noted that home prices are starting to rise in the region, though slowly, and that employment is improving with retail emerging as the top employer in both counties.
Collier County's unemployment rate is 7.6 percent and Lee County's is 8 percent, but 6 percent is where it needs to get to be considered normal, Jackson said.
The median price for homes — the price at which half the homes sell for more and half for less — has increased in Collier and Lee but remains far from the peak during the housing boom in 2004 and 2005.
"Expect a somewhat choppy economic recovery," he told the group.
Brad Hunter, a chief economist who directs Metrostudy's market research operations in Southwest Florida, said there is a growing disparity between what he described as "A" locations, or the best ones, and what he classified as C, D or F. He labeled Bonita/Estero with an "A," saying home builders in the leading markets in Southwest Florida are now selling 10 homes a month.
"It's something we haven't seen for a long time," Hunter said.
Now, he said, there's more of an urgency to buy because prices are improving.
But he warned that as construction picks up, the supply of lots is dwindling and that eventually builders could face material and labor shortages, factors that could drive up their costs and home prices. If builders try to raise their prices too much, there would be "price pushback" from potential buyers, who will walk away, Hunter said.
He quickly ran through some numbers, saying housing starts for new single-family homes were up 137 percent in Collier and up 70 percent in Lee from their bottom a few years ago.
By the numbers
In Collier, where the house market is recovering more quickly, he said, there's only a 1-1/2 month supply of finished new single-family homes on the market. Last year, there were 641 homes started in the Bonita/Estero market, up 30 percent from 2011.
In Collier, where the house market is recovering more quickly, he said, there's only a 1-1/2 month supply of finished new single-family homes on the market. Last year, there were 641 homes started in the Bonita/Estero market, up 30 percent from 2011. The productivity was more than double what it was in 2008, Hunter said.
"We have a low supply of lots and it's getting lower all the time," he said.
Much of the demand for homes is coming from move-up buyers, who are finding it easier to sell their homes so they can buy new ones, Hunter said.
Sandra Pianalto, president of the Federal Reserve Bank of Cleveland, made a return appearance. She spoke at the event in 2010.
"We have seen real improvement in the economy, and yet we still face uncertainty around when the economy will be able to stand on its own two feet, without extraordinary help from the Federal Reserve," she said.
She talked about all the steps the Federal Reserve has taken to try to get the national economy back on track, including buying mortgage-backed securities, reducing the federal funds rate to nearly zero and purchasing U.S. Treasury securities.
"Our actions have helped the economy go from a point where it was shrinking in 2008 and 2009, to the point where it is growing today, albeit at a moderate rate. When the Federal Reserve first announced our purchases of mortgage-backed securities in late 2008, 30-year mortgage interest rates averaged a little over 6 percent. Today, they average around 3.4 percent," she said.
However, she cautioned that the benefits of her agency's actions may diminish over time and there are risks involved.
"At some point, we will have to stop buying assets, and ultimately we will have to unwind our now large holdings of Treasury and mortgage-backed securities," she said. "We should be sure that when the time comes, we can exit without adversely impacting markets, without allowing an undesirable increase in inflation, and without risking the progress that has already occurred in our economic recovery."