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State economists say turnaround will take longer

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By CATHERINE DOLINSKI

cdolinski@tampatrib.com

Published: July 18, 2009

TALLAHASSEE - Median home prices could drop below $128,000 and unemployment could reach 11 percent before Florida's economy turns around next year, state economists predicted on Friday.

Florida's economy will continue flagging until the third quarter of 2010, mirroring what now is expected to be an equally slow recovery nationwide, the analysts for the legislative and executive branches forecast during a conference at the Capitol.

That's about six months slower than the economists had predicted as recently as March, before revising their national outlook.

"Originally we had thought we would see a good bit of recovery in January, and then building from there, said Amy Baker, coordinator of the Office of Economic and Demographic Research. "It's going to be six months later."

Home sales and construction remain major factors in the turnaround, as do foreclosures. The economists were still tweaking their predictions at the conference's end late Friday; final results will not be available until Monday, they said. Their preliminary estimates showed median house prices dropping as low as $133,882 this quarter; by this time next year, they may barely exceed $127,000.

Employment rates are likely to recover even more slowly than the rest of the economy, Baker said.

Next year, the state's jobless rate could hit 11 percent, the economists said. It's already slightly higher than that in the Bay area.

Tourism rose slightly during the first quarter of 2009 but is expected to drop during the next several months. Economist Clyde Diao was particularly pessimistic about the global recession's effect on international travel.

Diao, who works for Gov. Charlie Crist, was hopeful that Florida's appeal can offset some of the damage. "It really is the No. 1 tourism place in the United States."

Reporter Catherine Dolinski can be reached at (850) 222-8382.

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