I was catching up on my reading this morning. (Yes, I’m that far behind.)
Business 2.0 magazine mentions little ol’ Lakeland in The Best Places to (Still) Invest. It seems they polled Moody’s Economy.com researchers to forecast — an economic word meaning “throw bones” — to identify which cities will see the greatest appreciation by 2011.
Appreciation is a simple term that means a rise in the price of goods. Property in this case.
Those considering coming here to flip houses are asked to visit the number one ranked community, Panama City, FL. The researchers project a 72% gain in home prices. That means if you go to Panama City you’ll make a ton of money. Go now! Hurry before it’s too late!
OK, I think they’ve left. Those of us living in Lakeland might be horrified (or delighted) to learn we ranked fourth with a 59% gain in home prices. Let’s see how Business 2.0 spun that number:
Aside from the panhandle and Vero Beach, few places in Florida scream out “buy now” like Lakeland. A house goes for a fifth less than the national median of $227,500, and Lakeland is just 30 minutes from Tampa, a juggernaut of 2.7 million people that’s projected to add almost 210,000 more residents over the next five years. Lakeland is the greenfield – actually, orange and yellow, because of the surrounding citrus groves – that developers are divvying up to house many of those newcomers. Meritage Homes (Charts), one of the fastest-growing U.S. builders, plans to build more than 1,300 homes in the area by 2008. “All the big national and regional builders have moved into town,” says Larry Comegys, Meritage regional president. “Lakeland has become major.” It also sits along I-4, where the density of development is beginning to mirror the Dulles corridor in Virginia. — Business 2.0
Wait, there is more. And I’m going to put this in bold. It’s just that darn important:
Caution: Prices tend to top out more quickly in areas like Lakeland that are largely populated by semiskilled service workers.
You see, if the median — the point at which half the homes cost more and half the homes cost less, and only a few can afford a home at all — truly reaches their projection of $282,000 by 2011 all those semiskilled service workers (blog writers) will have to find somewhere else to live.
Why? Business 2.0 projected that by 2011 the per capita income will be 39,100. Let’s say the interest rate for a 30yr term is still 5.9% in 2011. That means that average family would conservatively afford a $126,000 home.
Congratulations to those who currently own homes in Lakeland. Those moving here to flip homes? I hear the city is considering a 59% “flippers” tax.*
* OK, I made up that particular tax.