Villages leads region in economic revival

Construction continues in the neighborhood behind Water Lily Recreation Center in the Village of DeLuna.

The regional economic engine known as The Villages is reporting strong numbers. All economic indicators point to the resiliency of The Villages metropolitan statistical area as the pandemic grows dimmer in the rearview mirror, said Sean Snaith, Ph.D., a nationally recognized economist at the University of Central Florida. Name the economic indicator, and the result is the same. Home values are up, so is home equity, the foreclosure rate is far below other markets, commercial sales are improving and the number of businesses in the community is at an all-time high, according to a range of state, federal and private sources. “For one, COVID-19 did nothing to the fundamental trends that are driving The Villages,” Snaith said. “The data is consistent. This is the same conversation you and I have been having over the past decade. Sure, there’s been different bells and whistles, but the underlying foundation of what’s happening there is as solid as granite.”

Villages Market Appeal

What Snaith culls from market data, Scott Renick sees day to day as The Villages director of commercial development.

“It’s absolutely hot,” he said. “The bounceback that started with the business reopenings around this time last year has continued to build ever since.”

In some instances, The Villages market has never been hotter, Renick said.

“When we looked at retail and restaurant sales for March this year, sales were up substantially for our community businesses,” he said. “In some cases, they even set high water marks for their businesses.”

That increase in sales is fueling optimism in The Villages business community, Renick said.

“On balance, the majority of folks we’re talking to are very optimistic,” he said. “Everyone we’re talking to is very bullish where we are and where we’re going.”

That optimism, coupled with The Villages development south of State Road 44, also is having a positive impact on companies thinking about expanding to the community, Renick said.

“Residential demand points only to more optimism for our long-term future,” he said. “That strong economy and long-term economic horizon have opened the eyes of some larger retailers who are not here now that say they should be.”

Low Delinquency Rate

One factor accounts for this market resurgence The Villages — homeownership.

The median price of a home in The Villages is about $293,000, said Molly Boesel, principal economist at CoreLogic, one of the nation’s leading providers of real estate data and analytics.

“It’s up quite a bit over the years,” she said. “Sales have been very strong in The Villages. Sales in December 2020 were quite a bit higher than 2019. They’re not skyrocketing, but increasing at a steady rate can be a good thing for a market because you don’t have the boom-bust scenario.”

Homeowner wealth in The Villages also increased substantially in 2020, Boesel said. Homes in The Villages averaged $160,000 in home equity by the end of 2020.

“That’s $10,000 more than the end of 2019,” she said. “Across the country equity is going up. But $160,000 is a pretty big number. It’s interesting if you think back to the financial crisis of the Great Recession. Home equity across the United States was a huge issue because of the lack of equity. Now, it’s completely opposite, and it’s a good thing for the market.”

Mortgage delinquencies in The Villages also remain far below state and national averages, Boesel said.

The delinquency rate, mortgages 30 days or more past due, averaged only 1.7% during February in The Villages, one of the lowest rates in the country, according to CoreLogic researchers. That compares with a national rate of 5.7% and 7.1% in Florida.

Sales Rebound

One clear sign of this economic revival emerged from first-quarter 2021 gross sales produced in The Villages MSA, which includes all of Sumter but not The Villages in Lake or Marion counties.

Total sales grew by 7.6% to nearly $1.1 billion during the first three months, with three market segments recording strong gains, according to state revenue data. Lumber and other building material dealers experienced a 40% increase in first-quarter sales to $125 million; manufacturing, 11% to $108 million; and medical, 37% to $18 million.

Manufacturing sales corresponds with a new wave of industrial-commercial activity taking place throughout the MSA.

For instance, MAPEI, a global leader in the production of adhesives and chemical products for the building industry, recently broke ground on a 260,000-square-foot production and distribution facility in Wildwood.

It’s just the beginning of new commercial-industrial opportunities in the city, said Wildwood City Manager Jason McHugh.

“(MAPEI) really puts us on the map and shows we can compete with other cities, other parts of the country and really the world,” he said. “That we can attract an Italian manufacturer like MAPEI to invest in Wildwood really shows the potential we have here. It’s huge for us.”

Look to Future

The Gov. Rick Scott Industrial Park just south of Coleman is another example of just how attractive the MSA has become to the commercial-industrial sector, Renick said.

First-phase development is rapidly approaching buildout at the 424-acre commercial-industrial park, Renick said. Two of the tenants, DZ Block and The Villages Daily Sun, are getting national industry recognition for incorporating world-class technology into their respective production processes.

“We’ve got a handful of deals we’re currently working on there, and we have recently seen a big increase in interest,” he said.

Potential tenants at the industrial park also are taking note of a new rail spur, sidetrack and transflow facility now in design through a public-private partnership with Sumter County government, The Villages and CSX railroad, Renick said.

“Based on the deals we’re looking at, we’re filling up space,” he said. “Now, we’re doing some design work on what was to be a future phase, taking a harder look at that.”

Magnet to People

The outlook is bright for The Villages MSA, Florida and the United States, Snaith said. It’s particularly relevant in The Villages because of the population growth.

In fact, Sumter because of The Villages will grow faster than any other Florida county through 2045, according to the latest population forecast released by demographers at the Bureau of Economic & Business Research at the University of Florida.

“With the fast rate of growth of the (MSA), and the demographic drivers of growth still in place and the supply chain following where the demand is growing, that is something that will continue to grow,” Snaith said. “Keep in mind the demographics of the U.S. population is feeding into that growth. The baby boom isn’t going to suddenly disappear. There is a significant percentage of the baby boom that has not reached retirement age, yet.”

The MSA, and Florida as a whole, also benefits from the state’s institutional appeal not only to retirees but also all levels of workers and their families, Snaith said.

“Florida’s handling of COVID-19, and our relatively strong fiscal situation and, of course, no income tax continues to be a magnet for people from states that are fiscally imbalanced with higher rates of taxation that are poised to go higher,” he said. “COVID-19 was a temporary phenomenon. The likelihood of permanent change is fairly low. And all the trends in real estate, commercial or population are unaffected by what we went through the past year. The economic data shows the economy is continuing to emerge from the COVID-19 chrysalis that we all were trapped into.”

Specialty Editor David R. Corder can be reached at 352-753-1119, ext. 5241, or david.corder@thevillagesmedia.com.