In April of this year, the Lake County Board of County Commissioners increased school impact fees to $7,719. Coupled with the huge increase in road impact fees in 2014, this has started to significantly slow down housing activity.
For Lake County, single- and multi-family building permits totaled 306 in April, with permits declining each of the next four months. The total number of Lake County permits for August was 222, 27.5 percent below April’s total.
When compared to 2014, permits from January to August are down 1.3 percent.
The Villages shifted some of its construction from Sumter County to the new Fruitland Park development, which means 381 permitted homes were included in those totals. Had The Villages not shifted into the edge of Lake County, Lake County permits would be down 20.7 percent.
For 2015, total Lake County permits are trending 2,912. This is 54 percent below the boom level of 2005.
In September, the median price of a home in Lake County was $169,000. This is still 32 percent below the median home price in 2005. Thousands of homes are still underwater financially.
While housing in Lake County is significantly better than the 514 permits pulled in 2011, the housing market continues to encounter serious economic headwinds.
Consider this fact: Housing permits this year are trending 22 percent below 2001 levels (the year of 9/11). However, the biggest difference between now and then is that there are 97,000 more people living in Lake County today than there were 14 years ago.
The biggest concern for many in the Lake County housing industry is that the Lake County Board of County Commissioners just increased school impact fees again to $9,324, the highest in the state of Florida. Total impact fees for a 2,600-square-foot home in south Lake County are $13,421, and this does not include $4,000 to $6,000 in probable building and utility fees.
The real issue with impact fees is they do not add any value to the property. With median home prices 32 percent below the 2005 level, and new building codes that have increased the cost to build, it is very difficult to build a home that can appraise out for financing.
This pushes new homebuyers to come up with more of a down payment, which many do not have, or for the new home market to rely on wealthy cash buyers. It appears the recent declines are pushing cash buyers to the sidelines, which will exacerbate Lake County’s housing woes and keep home prices from rising.
The other huge issue is jobs. Construction is one of Lake County’s top employers, and 161 different jobs are created when a home is built. Since 2006, at the end of the housing boom, Lake County’s unemployment rate increased by 50 percent to 5.1 percent. In nine years, despite adding 15,000 residents, the county has only created 9,400 jobs. The biggest problem in Lake County since 2006 remains the lack of job creation.
Here is the takeaway from these numbers. Housing is not booming in Lake County. In fact, since the implementation of the new impact fees in April, it is plunging. Housing prices are not rebounding as they are in other markets because there are fewer people buying homes. Finally, the county’s job creation is dismal and the jobs lost in construction will make it much worse.
Having the state’s highest impact fees is causing the economic headwinds to blow much harder.