In case you missed the news—which is highly unlikely if you looked at TV, listened to the radio, read a newspaper or browsed the web in the past week—Florida has allegedly lost population for the first time since World War II. A huge problem, the journalists all agree, since the Sunshine State historically relies on steady growth to fuel its economy. (Doesn’t everyone?)
It must’ve been a slow news week. The media sank its teeth into this particular item like a pit bull on steroids; reporting it in such somber tones you could almost hear the death knell in the background. Please observe a moment of silence, it tolled. Florida has passed.
Here, for example, is how the New York Times reported the news:
Choked by record level of foreclosures and unemployment, along with a helping of disillusionment, the state’s population declined by 58,000 people from April 2008 to April 2009, according to the University of Florida’s Bureau of Economic and Business Research. Except for the years around World War I and II, it was the state’s first population loss since at least 1900.
“It’s dramatic,” said Stanley K. Smith, an economics professor at the University of Florida who compiled the report. “You have a state that was booming and has been a leader in population grown for the last 100 years that suddenly has seen a substantial shift.”
Of all the reports we saw or heard, only one took pains to describe how the survey was conducted. Details, it seems, always get in the way of a hot news story.
Back in 1976, Dr. Henry (Hank) Fishkind—today one of Florida’s leading economists—was an associate professor of economics at the University of Florida and director of its forecasting program. Dr. Fishkind had a hand in designing the methodology by which these population estimates continue to be compiled, more than three decades later. Each year’s final tally still depends on three related occurrences connected to new home construction.
The methodology is based on the issuance of new residential building permits, which creates a starting point. Then they calculate the total number of new electric customers. Every new house has a new electric meter; which when turned on—in theory anyway—indicates a new household has formed. They then calculate the average number of persons per electric household and multiply that number by the number of new meters to estimate new population growth. Conversely, whenever an electric meter is shut off, that same number of people is subtracted from the population.
Interviewed recently by reporter Judith Smeltzer for WMFE-FM—the public radio station in Orlando—Dr. Fishkind described a totally unforeseen glitch in the survey’s methodology that he believes contributed to this year’s conclusion that more people left Florida than arrived. That glitch was in not anticipating the gargantuan housing bubble that would occur some thirty years later during which numerous under-capitalized speculators purchased new homes—sometimes more than one—in which they had no plans to spend so much as a single night.
Now for some fuzzy math. Let’s say that a lone housing speculator (a respectable term for “flipper”) bought two new homes during the boom. According to the UF methodology, this person formed two new households. If the electric meters are subsequently turned on—which they invariably are—that reconfirms that two new households have formed. If, say, an average number of 2.5 people make up a typical electric-using household, then by UF’s count five people live in the two new homes.
If the meters are eventually shut off—as they usually are when a home slips into foreclosure—these same five “phantom” occupants are subtracted from the following year’s population estimate. With more than 385,309 Florida households—or 1 in every 22 households—receiving at least one foreclosure filing in 2008, it’s easy to see how our estimated population could show a significant loss based on this system of counting.
We’re in no way denying that people have had to leave the state. Many of those hardest hit by the one-two punch of the housing and economic crises—particularly in construction or dependent fields—have been forced to resume their lives and careers elsewhere. Simultaneously, many of those who might otherwise have moved here in the past year have put their plans on hold waiting for the economy to improve, their homes to sell and their confidence to rebound.
That’s all happening now. Nationwide, sales of existing homes were up in July for the fourth straight month, freeing many of these would-be buyers from our northern feeder markets to actively pursue their goal of owning homes in Southwest Florida. Spurred by the lowest prices in nearly a decade and some of the lowest interest rates in history, they have reduced the inventory of available homes here to the lowest level in three years.
Meanwhile, from Lakewood Ranch to South Sarasota County, every reputable builder will tell you that business has been on a noticeable upswing. Just this past week the Sarasota Herald-Tribune reported that Diamond Homes of Englewood has resumed building again after a painfully quiet three years; and is presently fielding multiple offers on its newest inventory. According to the same article, permits filed for new homes in Manatee and Sarasota counties rose by double digits during the first four months of this year. Nationwide new home sales jumped 9.6 percent in July—a fourth straight monthly gain.
With all this sales activity taking place, we’ll go comfortably out on limb and say that even if Florida did have a one-year freeze in population growth it’s certainly beginning to thaw. The New York Times had it on much better authority last weekend when it joined noted beach expert, Stephen Leatherman (a.k.a., Dr. Beach) in declaring Crescent Beach on Siesta Key the best beach in the continental U.S. That’s news we all know is true.
(Fuzzy Math, Photo Credit: merchantcircle.com)
