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Economist: Local real estate market should stay on track
Area chambers get an optimistic view of increasing population, falling unemployment and rising real estate values.
By HELEN HUNTLEY
Published January 19, 2005
Worried the hot real estate market is a bubble threatening to burst? Listen to Wachovia economist Mark Vitner for a few minutes and you'll get plenty of reassurance.
"We're blessed that we live in one of the strongest, most dynamic economies in the country," Vitner said as part of an economic update delivered to chambers of commerce in Tampa and St. Petersburg on Tuesday.
Vitner sees the state's population and job growth continuing, unemployment falling and housing prices continuing to go up - albeit at a more modest pace.
"I do not think there's a housing bubble developing in Florida," he said.
Other than in the Miami-Dade County condo market, Vitner said "prices are not being driven by excessive speculation."
He said last year's double-digit gain in housing prices probably will not be repeated, but gains in the "medium to high single digits" are likely. He said that's partly because housing prices in Florida are still relatively low compared to other coastal areas of the United States.
But higher interest rates are part of the Wachovia forecast and Vitner said if mortgage rates get to 7 percent, the housing market will start to cool.
Vitner said he expects the building boom in China to continue putting pressure on prices for commodities and building materials such as steel and cement.
Brian Wesbury, chief economist at Griffin, Kubik, Stephens & Thompson in Chicago, gave an optimistic forecast for the U.S. economy as part of the Wachovia program. He predicted the economy will grow at a rate of better than 4 percent and the stock market will rise more than 20 percent this year.
"I'm looking forward to a good year for profits, so I'm very optimistic," he said.
Helen Huntley can be reached at huntley@sptimes.com or 727 893-8230.
[Last modified January 19, 2005, 00:32:23]
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