Fastest growing U.S. metro area hit hard by recession

By Colleen Jenkins
(2011-04-16) (Reuters)

PALM COAST, Fla (Reuters) - As snow blanketed the northern United States this winter, city leaders in Palm Coast, Florida, sent postcards to thousands of out-of-state landowners who have not yet built homes on their piece of paradise.
"It's sunny and 76 degrees in Palm Coast," the mailers read. "What's the temperature where you live?"
The postcards highlighted the scenic trails and uncrowded beaches that helped make this coastal community between Daytona Beach and St. Augustine the nation's fastest growing metro area in the past decade, according to new U.S. Census Bureau data.
What they didn't say: Palm Coast needs a boost after getting battered by the housing bust and foreclosure crisis.
"We grew too fast," said City Manager Jim Landon. "We fell very hard, too."
The Palm Coast metro area's population rose 92 percent between 2000 and 2010, far outpacing the second-fastest growing metro area of St. George, Utah, which increased nearly 53 percent, the census showed.
The metro areas of Las Vegas, Nevada; Raleigh, North Carolina; and Cape Coral, Florida, rounded out the top five.
Palm Coast also now ranks highest in unemployment out of Florida's 20 metro areas, according to national labor statistics. Its 14.9 percent unemployment rate in February was five percentage points above the national average.
Distressed property sales dominate the housing market. The city building division that once issued an average of 400 single-family home building permits a month during the construction boom has seen that number dwindle to about 10.
City leaders remain optimistic, in part because of the steady stream of national retailers including Kohl's, Belk and Lowe's that arrived during the economic slowdown.
But residents were surprised to learn of Palm Coast's fastest-growing status after seeing many neighbors move away.
"It's become a real depressed area," said retiree Phyllis Sieling, loading groceries from a Super Target into her car.
GROWTH, WITH EYE ON GREEN
It's hard to feel depressed in Waterfront Park, a 20-acre nature haven along Palm Coast's Intracoastal Waterway.
Opened last fall, the park boasts a fishing pier, playground and some of the city's 100 miles of connected hiking and biking trails. Recycling containers for bottles and fishing lines abound.
City leaders have worked to keep things "green" and to maintain the tranquil, outdoor lifestyle envisioned by developers who carved the planned community out of scrubland in the 1970s.
Back then, residents in northeastern states received Garfield the cat phones as gifts if they checked out Palm Coast for their retirement home.
There is still plenty of golf and tennis played, but good schools and a small-town feel also have drawn in families.
"That's what keeps us here, the schools," said 42-year-old mother Tommie Krawiec, who chose a move to Palm Coast over the more hectic Jacksonville.

On a sunny Saturday, Krawiec and another local couple watched from a shaded picnic table as their young daughters played along Waterfront Park's shoreline.

Ken Hemingway, 50, and his wife relocated from Connecticut in 1998, when the city of Palm Coast had just two stoplights and was a year away from incorporating.
He said the influx of residents -- from 49,832 in 2000 to 95,696 in 2010 -- hasn't hurt the quality of life.
"You couldn't drag me back kicking and screaming," he said. "Everybody says it's busy here. We're like, you have no clue."

Landon, the city manager, proudly notes that the only sign of this swiftly expanding city from I-95 is a blue water tower bearing Palm Coast's logo.
City officials said they have withstood pressure during the stalled economy to compromise on strict architectural standards. They require businesses to design attractive exteriors, plant thick vegetation and install signs that are monument-style rather than on poles.
On a main thoroughfare, a soon-to-open Mobil gas station features stone columns by its pumps, and the new ABC Fine Wine & Spirits store has a tile roof and lush landscaping.
"I defy you to find as attractive an ABC store in the state," said Mayor Jon Netts, a retired educator from New Jersey who drives a towing service tug boat on the side.
He's hoping the city can convince the owners of 18,000 vacant platted lots -- who received those tempting sales-pitch postcards -- to build homes and bring in new dollars.

Officials also expect a mixed commercial and residential development known as Town Center to fuel less frenzied growth. A 14-screen movie theater, Red Lobster and Olive Garden opened in recent months, and Panera Bread is on the way.

"We have great potential," Landon said. But, "I hope we're not the fastest growing community in the next decade."
(Edited by Greg McCune)
© Copyright 2011, Reuters

Good news for the housing matket in Palm Coast

Bargain prices on housing combined with low interest rates below 5 percent may bring the real estate market its busiest spring season in years, economists say. Distressed sales continue to put downward pressure on home prices, which may lure more buyers off the fence and ready to snag a deal during the typical prime-time buying season. Some builders are ramping up discounts on new homes as well as boosting commissions to brokers to try to spark more transactions. Sellers of existing-homes also are getting more competitive in pricing their homes

Single Family Delinquency Rate Less than 4%

Freddie Mac Chief Executive Officer Ed Haldeman said less than 4% of the government-sponsored enterprise's single-family home loans are at least three payments behind or heading into foreclosure.

Haldeman made that statement in an article he authored, "Three little-known facts about Freddie Mac delinquencies."

Haldeman said less than 1% of the firm's multifamily portfolio is classified as delinquent.

"It's among the lowest. The seriously delinquent rate for the industry as a whole was about 9% at the end of 2010," Haldeman wrote. "And the rate for subprime mortgages was approximately 27% – seven times higher than Freddie Mac's. On the multifamily side, the delinquency rate for banks and thrifts was slightly more than 4% – about 16 times higher."

Haldeman said the GSE saved 275,000 distressed loans last year, adding that the firm primarily operates as a buyer of 30- and 15-year, fixed-rate mortgages.