New construction activity remains
strong; commercial gains, housing starts decline
The white-hot
residential real estate market appears to be cooling, but the
overall result is healthy expansion and smart growth opportunities
for Volusia County, according to real estate and economic experts.
According to
building permit data collected by the Volusia County Department of
Economic Development from the county and city building permit
offices, construction activity during the first quarter of this year
was just shy of $265 million, but that’s down from $393 million in
the fourth quarter of last year. The number of residential permits
fell from 1,641 to 937 while the dollar value of permits fell from
$353.7 million to $185.5 million. However, commercial and industrial
permit activity surpassed the fourth quarter totals of 2005. There
were 63 commercial permits issued compared to 52 in the fourth
quarter with dollar values increasing from $39 million to more than
$79.3 million.
“We should
look at this as a positive thing,” said Volusia County Economic
Development Director Rick Michael. “Commercial and industrial is
catching up and the balance between the two is becoming healthier.”
Residential
permits continue to dominate the construction activity in the
county. Unincorporated Volusia topped all jurisdictions with more
than $43 million in first quarter housing starts. New Smyrna Beach
was second with $40.5 million followed by DeLand with $26.9 million.
Orange City led the commercial permitting activity for the first
quarter with more than $24.3 million followed by Holly Hill with
$16.8 million and the county’s unincorporated area with $11.3
million.
According to a
February report by the Florida Association of Realtors and the
University of Florida Real Estate Research Center, the median sales
price for single family homes in Daytona Beach was $227,000, a 34
percent increase over 2005 prices. And insiders say that although
the bubble is not bursting anytime soon, the residential market is
in the early stages of a few changes.
"Economists
have informed us that Florida, in particular central Florida, is in
the midst of a soft landing," said Sue Darden, executive officer,
Volusia Homebuilders Association. "Things are evening out."
Homes for sale
are staying on the market longer and the number of residential
permits is down significantly from the last quarter of 2005. "The
big speculator investors are gone from the market," Darden said. "I
have noticed that builders are offering incentive packages now. A
year ago, builders didn't have to advertise, people just walked in
the door."
Darden said
it's natural that commercial growth has not flattened, but is
catching up to residential growth. "The more residential you have
the more commercial you need to support it. We're in dire need of
this commercial development."
Greg France,
building official for Daytona Beach, said he has not seen a
slowdown. "Our permitting activity has increased significantly for
the three years I've been here. We're overwhelmed with both
commercial and residential permits."
Daytona Beach
commercial developers have made good use of the mixed-use concept,
according to France. "A lot of the current activity is focused on
development where residents shop where they live and have
transportation sources that are close. That's the concept for
downtown Daytona Beach with the condos and nearby shops." France
cited Wall Street Lofts as an example of mixed-use that has worked
wells – a variety of shops below condos.
"In Daytona
Beach, we have an international airport, residential properties,
buildable lots, beachfront investment and activity and a resurgence
of downtown area," France said.
Orange City
understands the appeal of commercial activity. In the fourth quarter
of 2005, Orange City issued more commercial building permits than
any other city in Volusia County. In this year's first quarter,
Orange City ranked at the top of the list again with the second
highest number of commercial permits of all cities in the county.
Orange City is the commercial hub of southwest Volusia County,
according to Jim Kerr, Orange City assistant city planner. "We're in
the center of DeLand, Deltona and DeBary," he said. "Orange City is
a retail center for these areas -- historically and traditionally."
A substantial
number of Orange City's first quarter permits were issued for new
buildings within the Orange City Towne Center, a new professional
and general office park. Orange City also can look forward to
Hospice of West Volusia coming to the city - a 29,000-square-foot
facility with 18 beds. The facility will be just south of the
county’s PFC Emory Bennett Park on Veteran’s Memorial Parkway.
Orange City's
Villa Grande, an upscale 120 condo residential project, is not
permitted but in the works with the planning commission meeting on
the project soon. Like most other areas of Volusia County, there is
no end in sight to the development on the horizon for Orange City.
"We do not see this growth slowing down anytime soon," Kerr said.
Although
Orange City has seen some nonresidential development over the past
several years, the recent approval of the new high school likely
will bring an increase in residential development, Kerr added.
"Orange City has experienced some multifamily residential over the
past three years, but also will be adding some mid-scale and upscale
single family residential as well. This will be developing over the
next three years."
In the end,
people are moving to Volusia County to live in a warm weather
climate. According to an April U.S. Census Bureau study, Florida
remains a major draw for those relocating within the country. In
fact, Florida led the nation in average yearly net gain of new
residents from other states between 2000 and 2004. During these five
years, the number of people moving to Florida outnumbered those who
left the state by a yearly average of 190,894.
"In case of an
economic downturn, development might slow down a bit, but it never
will go backward,” Kerr opined. “People want to retire in a warm,
sunny climate, and that's Florida."
