April 3rd, 2012
Poinciana housing market, hard hit by recession, may be poised for a big bounceback.
POINCIANA – What goes up, it’s often said, inevitably has to come down, and that was definitely the case for the Central Florida real estate market, which soared for a while, before finally coming to a complete halt.
And one of the communities that rode the wave with a major building boom, and then fell equally hard when the market tanked, was Poinciana. During the boom years, between 2004 and 2007, homes were getting built here every 90 days, to meet a seemingly insatiable desire for new homes among the home buying public.
But when the housing market collapsed, that left Poinciana with a painfully high number of unsold homes and foreclosed properties.
Now that may be changing.
“I remember Poinciana a few years, when there were thousands of homes on the market,” said Realtor John Rivera of Sun Star Realty Group.
Inventory, he added, has come down — way down.
“Now if you go over there between Polk and Ocseola counties, there’s only about 200 homes for sale on 40,000 acres of land,” he said. “That is a low inventory.”
It nearly harkens back to the days when Poinciana’s housing market was booming.
“Poinciana was growing by gangbusters,” said Keith Laytham, a Poinciana resident. “For a while, it was the fastest growing community in the United States. When the real estate market crashed, Poinciana got left holding the short end of the stick – too much money being asked for in a down market.”
Former Osceola County Commissioner Atlee Mercer said what’s odd about the housing market is how the boom times ended.
“It didn’t really crash, even though that’s what everybody says and how it was reported,” Mercer said. “It just stopped. People stopped buying.”
For Poinciana, which is made up of 10 villages cut across Polk and Osceola counties, that meant a lot of homes built when demand was high have sat vacant ever since.
“As a result, about three years ago, there were about 17,000 homes on the market at any given point in time in Poinciana,” Laytham said. “That was about a one year supply.”
But as the nation and the state of Florida have struggled to cope with the recession and the credit crunch at the banks, Laytham said there are signs that the local housing market is beginning to shift in significant ways: namely, that the supply has shrunk considerably.
“Today if you look in those same markets for Osceola, Orange and Polk counties, there’s about 6,000 homes on the market today, and that’s a reduction of 11,000 homes,” Laytham said. “But out of those 6,000 homes, there’s 4,000 condos. If you went to a Realtor and said ‘I want to buy a single family house in this area,’ there’s only about 2,000 single family homes on the market right now. That’s kind of healthy as a matter of fact, as far as supply goes.”
Laytham is the chairman of Poinciana Residents for Smart Change, a local civic group working to make Poinciana a better place to live. The group recently held a meeting that focused on where the real estate market in Poinciana was headed. Rivera, who spoke to the group, said the signs are increasingly encouraging for a community that once seemed like a poster child for the prolonged foreclosure mess.
“That’s the thing that’s thrown a monkey wrench into this,” Laytham said. “There’s still a lot of foreclosures out there, and short sales.”
Short sales are homes being offered for less than the homeowner owes on the mortgage. The seller’s hope is that the banks and mortgage lenders will accept the lower bid and write off the remainder of the owner’s debt, rather than allow the home to lapse into foreclosure.
Rivera said supply has gone down so significantly that as the local economy improves, and with interest rates still very low, the Poinciana housing market could pick up – and fast.
“What’s happening is if someone had called me a year ago asking for a home in Poinciana, a lot of times you’d hear ‘I want a home for $40,000 to $50,000, and they were a dime a dozen,” he said. “Now they rarely exist anymore. There’s been an average increase of $10,000 to $15,000 on the asking price, across the board.”
As a result, Realtors like Rivera “suspect the Poinciana numbers will go up faster than in other places,” Laytham said. “We have very low interest rates now. Those people who walked away from houses and handed the keys to the banks, they’re free and clear now. As time goes on, the banks become more forgiving. Over time you can repair your credit history rating. Even though they did walk away from a mortgage three years ago, they’re now able to qualify again.”
Rivera said the housing market is recovering as the local economy does.
“One of the main issues is going to be the Poinciana hospital,” he said of the new Poinciana Medical Center being built now.
“Another thing is people can buy again, people who in 2006 had a bankruptcy and foreclosure on their record,” Rivera added. “Now anybody who from 2006 to 2010 had a foreclosure, they can purchase another home. That’s the guidelines that the lenders came up with. They’ve gotten a little bit more lenient. It’s not as easy as when people were buying homes and I used to call it the ‘fog in the mirror’ test — if you fogged the mirror, you got approved. Now they’ve verifying the jobs and income and whether you’re working, but the buyer is a little more educated, and more serious. They’re doing exactly what they need to do to earn a home.”
Another big benefit not to be overlooked, Laytham said, is how far prices have fallen from the peak in 2006.
“The houses are so much cheaper now than back in 2006,” he said.
There are reasons to believe the local economy is about to get much stronger as well. Poinciana is expected to become the beneficiary this year, and in the next few years, of up to 7,000 new construction jobs that are on the way, courtesy of several major building projects. But unlike the boom years of the housing market, these projects won’t be residential home building.
They include the widening of Poinciana Boulevard, construction on a new toll road called the Poinciana Parkway, and the building of a commuter rail station in the community as the final stop on the SunRail light rail line.
But the biggest project, which started construction on Feb. 17, is the Poinciana Medical Center, the first hospital and emergency room in this community. It’s being built by Osceola Regional Medical Center in Kissimmee.
“The community of Poinciana has been hearing about it for years,” Rivera said. “But now that they actually see the dirty being moved.”
Nick Murdock, the chairman of the Poinciana Economic Development Alliance – which is working to promote more jobs and business growth in the community – said after the construction has been completed, there will be 200 medical jobs at the hospital, as well as jobs associated with any spin-off companies that relocate here to be close to the medical center.
“We’d like to get a very high percentage of the Poinciana Medical Center staff to be Poinciana residents,” he said.
Laytham said jobs means more people employed locally – and looking for a place to live.
“You can kind of tell what’s going on in a community by looking at the amount of dirt that’s flying,” Laytham said. “You start looking at some of the commercial projects being built here now. Make no mistake about it, these companies that come in and open a Race Track (gas station) or put in a new Wendy’s franchise, they’re not doing it on a whim. They’re doing it because they’ve got some pretty smart people telling them when Poinciana comes out of this economic downturn, there’s some opportunity for commercial growth.”
And that means more customers for the real estate market.
“We think there is going to be an upturn in the market here,” Laytham said.
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