Economist warns Sarasota commissioners of looming economic threat

Amid stubborn inflation, the surging cost of living and constant angst at the gas pump, Sarasota has not been immune to the national trends that have pushed the economy into a downspin.

Sean Snaith, the director of the University of Central Florida’s Institute for Economic Forecasting, presented a snapshot of the local economic situation this week to the Sarasota County Commission.

Florida is experiencing what Snaith described as a “ho-hum labor market.” Meanwhile, both bankruptcies and credit card delinquencies are on the rise.

“The labor market is in a state of suspended animation in many ways,” he told commissioners. “Unemployment rates are low by historical standards, but job creation is quite slow.”

Although fears of a recession over President Donald Trump’s tariff policies did not come to fruition, Snaith said the nation’s military engagement in the Middle East presents a looming economic threat. The most immediate impacts of the Iran War are felt at the pumps and in the price of airfare. But Snaith signaled that there could be other long-term ramifications.

“The longer this goes on (the war in Iran), the greater the damage, and the greater the potential for the economy to slip into a recession,” he told the commission.

The state’s unemployment rate in March was a few ticks above the national average at 4.7%. 

Unemployment in Sarasota County matches the state average. But that is still an increase of more than two-thirds from March 2023, when Sarasota’s jobless rate was at 2.8%, according to data from the Federal Reserve.

The Economic Development Corp. of Sarasota County has also found an increase in unemployment in the North Port-Bradenton-Sarasota metropolitan area during the past year, according to a report shared with Suncoast Searchlight.

The trends align with a general economic malaise following the first explosions of the Iran War. A CBS News poll this month found nearly two-thirds of Americans rate the economy as “fairly bad” or “very bad.”

U.S. Sen. Rick Scott, the state’s former Republican governor, said on May 6 that Florida has been losing tens of thousands of jobs a month, as workers in their prime ages flee the state and inbound migration from retirees drops off.

“Unfortunately, this morning’s jobs numbers confirm what I have been sounding the alarm on for months, and what many Florida families are already feeling,” Scott posted on X. “Florida is falling behind on jobs.”

Among the biggest losers, Snaith said the local financial and information sectors are trending downward. On the flip side, the EDC projects health care, construction and utility jobs are expected to grow within the next five years.

Commissioner Joe Neunder asked Snaith what impact the proliferation of artificial intelligence has posed on the labor market for younger workers. Widespread layoffs in the tech sector have been blamed on AI.

Snaith said it was unclear whether jobs were being cut because more positions can be done by digital automation or because some sectors, such as tech, have slowed down since their pandemic boom. Anecdotally, he noticed his students at UCF are having a harder time finding jobs upon graduation.

“We’re in that hype phase of – call it the AI bubble, and there’s going to be a shakeout,” Snaith said. “Don’t ask me when. I can’t help you time your investments.”

The local housing and condo markets have also largely stagnated.

The median sales price of single-family homes in Florida have stabilized at levels from the drastic boost during the COVID-19 pandemic. Home prices had gone up by about 60% since 2019 to more than $400,000 in 2022 and have hovered around there since.

The median sale price for a house in the Sarasota area was $490,000 in March, about 16% higher than the rest of the state. However, prices have dropped by about a percentage-point since one year ago. Housing inventory has gone down by 21% over that span – and homes are sitting on the market for longer.

The median sale price of a condo has also slipped by about 3% in the past year to $330,000. 

Robert Goldman, a real estate agent in Venice with Michael Saunders & Co., said the local housing market has adjusted to what he called “the new normal.” Prices have dropped by about 15% from their peak two years ago, but he cautioned potential buyers from waiting for an economic downturn to pull the trigger on a home.

“Property is still moving, and sales are actually up,” Goldman said. “I think activity has been strong relative to the less inventory.”