By Sean Snaith
UCF’s Dr. Sean Snaith said Florida has a “solid safety net” if the economy stumbles. Snaith will share insights during the Florida Real Estate Trends summit on Jan. 19.
SARASOTA – The United States may be entering an economic slowdown in the coming months, but Florida's economy will be largely sheltered from this storm in 2024.
After the 2008-09 and 2020 recessions hit Florida's economy disproportionately hard, a slowing national economy won't have the same devastating impact on the Sunshine State or in the Tampa Bay and Gulf Coast regions.
Instead, we've got “sandbags” of population growth to protect us, shoring up the economy here and helping curtail the erosion of economic activity that was so destructive to our region's economy during those previous recessions.
While Florida's economy may slow some in 2024, our growth will remain positive for the year.
Keeping this overall economic outlook in mind, here are four predictions for how we'll fair in the coming year:
A softer labor market
The labor market will show some signs of softening with the unemployment rate drifting upward and some payroll jobs losses, but not in every sector of the economy, as the year progresses.
The good news is that the labor market is in a strong position as we enter this slower-growth environment and will not suffer the severe damage of those prior recessions.
Inflation woes
Inflation will continue to ease as we move through 2024 but at the current slow pace. Thus, it is unlikely that the Federal Reserve Bank will begin to cut interest rates until 2025 when the target inflation rate of 2% is clearly in sight.
Even higher-priced housing
The housing market in Florida and Tampa Bay has seen a dramatic slowing of transactions, but this slowing has not translated into an easing of home prices.
The combination of high prices, higher mortgage rates and the homeowners' insurance debacle has put the monthly payment needed for homeownership out of the reach of an increasing number of potential homebuyers.
Inventories of homes for sale remain depleted across the state and even more so in the Tampa Bay region. This shortage has prevented prices from softening, despite the diminished demand. The housing market will remain a key challenge for the region's economy throughout 2024 and beyond.
Transportation troubles
Our housing affordability woes are intertwined with another of the region's challenges: its transportation network.
A transportation network that can get workers from where they can afford housing to where they are employed is a key ingredient in addressing the housing affordability problem. Transportation projects like Brightline are just a piece of it.
At the start of 2023, many were convinced that the U.S. economy was headed for a recession. But as 2024 commences, it looks more like it will be a balancing act next year.
If the national economy was to stumble – and that is a real possibility – Florida, Tampa Bay and the Gulf Coast's economies have a solid safety net in place to help minimize the damage and “weather the storm.”
Sean Snaith is the director of the University of Central Florida's Institute for Economic Forecasting and is nationally recognized by Bloomberg News as one of the country's most accurate economic forecasters.
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