Beyond Disney: Orlando deals with demands of new industry, young homebuyers
This patchwork of lazy small-town streets, glittering high-rise luxury hotels, and all the enchantment of ``Disney'' is finally coming of age. Low- and high-tech manufacturing companies have poured into mid-Florida in the last few years, joining Orlando's traditional industries of tourism and agriculture, says Rick Tesch, vice-president of the Orlando-based Industrial Development Commission of Mid-Florida. These new and growing industries are bringing in more younger families who are looking for moderately priced homes, a demand investors and builders are working hard to fill.
One factor accelerating the flow of businesses into mid-Florida is Orlando's new airport (built in 1981), Mr. Tesch says. And today's communications revolution has made it less necessary for business to be near a large commercial center. ``With communications like they are now, you can talk to people with computers over phone lines and you can get in and out of here more easily and faster than New York.''
Orlando is one of the ``six real dynamic'' areas for real estate in Florida, says Thomas Powers, chief economist at Goodkin Research Corporation, a Fort Lauderdale real estate consulting firm. The others are Fort Lauderdale, West Palm Beach, Tampa, Jacksonville, and Melbourne. These six markets became very heavily focused into a ``job-driven market'' after coming out of the dip in demand for Florida real estate during the 1981-82 recession, Mr. Powers says. Job growth in high-tech and business service sectors has drawn many more young families to Florida. Previously, real estate demand had been mainly from retirees. Now it is shifting to these younger, primarily worker-aged households.
These working families need modestly priced homes. In fact, homes priced under $75,000 ``constitute now probably 60-65 percent of the market'' in Florida housing starts, Powers adds.
Although demand for more modest housing is heating up, demand for vacation homes is still cool in some areas, an effect left over from the era of higher mortgage interest rates.
``You don't have as much second-home purchasing today as you did before,'' Powers says. There's not much problem selling the $300,000 to $400,000 houses. People who buy these homes aren't bothered by high interest rates. If the ``super-affluent buyer wants to buy a unit, he'll buy a unit.''
But higher interest rates have moved second homes beyond the financial reach of some: Fewer people are buying the $150,000-to-$300,000 vacation homes in Fort Myers-Naples and Dade County. Others, perhaps expecting changes in the federal tax laws that would reduce the effective tax deduction of a second or third home, have opted for rental pooling and luxury time-sharing units instead of buying their own vacation homes.
There's a tremendous amount of discounting in the price of these slower-selling homes, Powers says. ``Nobody knows what they are selling for.'' Prices are agreed upon on a deal-by-deal basis. Comparing prices received for similar homes in the neighborhood is no longer a valid means of setting a selling price for homes in these areas. Homes are sold through auctions, buy-back programs, and other creative marketing programs.
Apart from some balky vacation home sales in selected areas, Florida real estate activity is up to its normal level. And this wave of activity has engulfed more than just the coasts of Florida. It has washed into mid-Florida, centering on Orlando.
Orlando industry has been diversifying into low-tech and electronics companies the last five years, building from a solid base of defense-related electronics industries. It has been guided in its growth by the Industrial Development Commission of Mid-Florida, an organization that has attracted businesses to the area by providing them information about the city.
All this activity has spurred Orlando, while wooing a variety of industries, to fix up its downtown area.
Orange Avenue, which runs north and south through Orlando's downtown center, was just like any main street in a little town a year ago, says Mary E. Douglas, 1985 president of the Orlando area Board of Realtors. The older buildings had lost a lot of their charm and ``people just didn't want to go down there very much.'' Now, the newly planted trees and brick circular walkways at the intersections have opened up the downtown area and made it more attractive, she says.
``Median price for single-family homes [in Orlando] is about $88,000,'' says Ms. Douglas. ``That could go up into several million dollars or it could go down to as low as -- there are a few left at $30,000-$40,000: `handyman specials.' ''
The big drawbacks in Orlando are shared by other fast-growing Southern cities -- traffic and water. There is too much peak traffic for the roads planned in a quieter era and not enough water for all the new businesses and individuals swarming to mid-Florida.