COMPREHENSIVE HOUSING MARKET ANALYSIS Crestview-Fort Walton Beach-Destin, Florida U.S. Department of Housing and Urban Development, Office of Policy Development and Research As of March 1, 2019 Crestview-Fort Walton Beach-Destin, Florida Comprehensive Housing Market Analysis as of March 1, 2019 Executive Summary 2 Executive Summary Housing Market Area Description The Crestview-Fort Walton Beach-Destin, Florida Housing Market Area (hereafter, the Crestview HMA) comprises Okaloosa and Walton Counties and is coterminous with the Crestview-Fort Walton Beach-Destin, Florida Metropolitan Statistical Area. The population is estimated at 282,600. The jobs created by more than 4 million tourists drawn annually by miles of sandy beaches and the presence of Eglin Air Force Base (AFB) and Hurlburt Field combine to provide a stable employment base. Tools and Resources Find interim updates for this metropolitan area, and select geographies nationally, at PD&R’s Market-at-a-Glance tool. Additional data for the HMA can be found in this report’s supplemental tables. For information on HUD-supported activity in this area, see the Community Assessment Reporting Tool. Comprehensive Housing Market Analysis Crestview-Fort Walton Beach-Destin, Florida U.S. Department of Housing and Urban Development, Office of Policy Development and Research Crestview-Fort Walton Beach-Destin, Florida Comprehensive Housing Market Analysis as of March 1, 2019 Executive Summary 3 Market Qualifiers Economy Sales Market Rental Market Strong: The Crestview HMA Balanced: During the 12 months Balanced: During the fourth quarter economy is strong with payrolls ending February 2019, new and of 2018, the average apartment rent up 2.6 percent during the 12 months existing home sales increased increased 7 percent compared with ending February 2019. 3 percent. the same period a year earlier. The economy has been growing since 2010, The sales market in the HMA is balanced, with The overall rental housing market in the HMA and nonfarm payrolls exceeded the 2006 pre- an estimated sales vacancy rate of 2.7 percent, is balanced, with an estimated vacancy rate recession high in 2016. During the 12 months down from 4.1 percent in 2010. During the 12 (including vacation homes and short-term rentals) ending February 2019, nonfarm payrolls averaged months ending February 2019, new and existing of 19.6 percent, down from 26.3 percent in April 116,300, up by 2,900 jobs, or 2.6 percent, from homes sales averaged approximately 12,050, 2010. Apartment market conditions are slightly the previous 12 months. Job growth was strongest an increase of 380 homes, or 3 percent, from the tight, with a vacancy rate of 3.6 percent during the in the professional and business services sector, previous 12-month period (CoreLogic, Inc., with fourth quarter of 2018, compared with 2.6 percent the fourth largest payroll sector in the HMA, which adjustments by the analyst). During the next the previous year when market conditions were increased by 1,100 jobs, or 7.2 percent, during the 3 years, demand is estimated for 6,275 new tight (Reis, Inc.). During the forecast period, past 12 months. During the next 3 years, nonfarm homes. The 1,050 homes under construction demand is expected for 1,900 units. Approximately payrolls are expected to increase an average of will satisfy a portion of this demand. 460 units that are currently under construction 2.3 percent annually. will satisfy a portion of the demand. TABLE OF CONTENTS Economic Conditions 4 3-Year Housing Demand Forecast Population and Households 8 Sales Units Rental Units Total Demand 6,275 1,900 Home Sales Market Conditions 10 Crestview HMA Under Construction 1,050 460 Rental Market Conditions 14 Notes: Total demand represents estimated production necessary to achieve a balanced market at the end of the forecast period. Units under Terminology Definitions and Notes 16 construction as of March 1, 2019. The forecast period is March 1, 2019, to March 1, 2022. Source: Estimates by the analyst Comprehensive Housing Market Analysis Crestview-Fort Walton Beach-Destin, Florida U.S. Department of Housing and Urban Development, Office of Policy Development and Research Crestview-Fort Walton Beach-Destin, Florida Comprehensive Housing Market Analysis as of March 1, 2019 Economic Conditions 4 Economic Conditions Figure 1. Sector Growth in the Crestview HMA, 2001 to Current Total Nonfarm Payroll os Largest sector: Leisure and Hospitality oods-Producing Sectors Mining, Logging, & Construction Manufacturing The leisure and hospitality sector has been the fastest growing payroll Service-Providing Sectors Wholesale & Retail Trade sector in the HMA since 2000 (Figure 1). Transportation & Utilities Information Financial Activities Professional & Business Services Primary Local Economic Factors Education & Health Services Leisure & Hospitality Located in the Florida panhandle, the Crestview HMA is a popular destination Other Services Government each year for millions of tourists who enjoy white sandy beaches, golf, fishing, -40.00 -20.00 0.00 20.00 40.00 60.00 80.00 100.00 dining, and world-class resorts. The leisure and hospitality sector is the largest Change in Jobs (%) sector in the HMA, accounting for 22,600 jobs, or 19 percent, of total nonfarm Note: Current is based on 12-month averages through February 2019. payrolls. (Figure 2). Payrolls in the leisure and hospitality sector have increased 34 Source: U.S. Bureau of Labor Statistics percent since the low point in 2010, after losing an average of 200 jobs, or 0.9 percent, annually during the local economic downturn from 2007 through 2010. Figure 2. Current Nonfarm Payroll Jobs in the Crestview HMA, by Sector In 2018, the economic impact of tourism on Walton County was estimated at nearly $4.7 billion (Visit South Walton). Hotel tax data show that visitor spending ocal Mining, ogging, Construction State in Okaloosa and Walton Counties increased 7.6 and 7.3 percent, respectively, in Manufacturing Wholesale 2017 from the previous year (HAAS Center, University of West Florida). Federal Okaloosa County is home to Eglin AFB, the largest military base in the United overnment Retail States, and Hurlburt Field, which supports the training of worldwide aviation 18% Other Services rade special forces. As of September 2018, Eglin AFB and Hurlburt Field are home to approximately 8,725 and 8,025 soldiers, respectively, including on-base otal and deployed personnel (Table 1). These are the two largest employers in the . ransportation Utilities nformation Financial Activities Table 1. Military Personnel and Dependents Residing on eisure Hospitality Military Bases in the Crestview HMA Name of Employer Military Dependents Combined Professional Business Services ducation Health Services Eglin Air Force Base 8,724 12,446 21,170 Hurlburt Field 8,033 10,478 18,511 Notes: Total nonfarm payroll is in thousands. Percentages may not add to 100 percent due to rounding. Current is based on 12-month averages through February 2019. Source: Defense Manpower System Source: U.S. Bureau of Labor Statistics Comprehensive Housing Market Analysis Crestview-Fort Walton Beach-Destin, Florida U.S. Department of Housing and Urban Development, Office of Policy Development and Research Crestview-Fort Walton Beach-Destin, Florida Comprehensive Housing Market Analysis as of March 1, 2019 Economic Conditions 5 Table 2. Major Employers in the Crestview HMA Crestview HMA (Table 2). Eglin AFB was established in 1935 and is home Number of to the 96th Test Wing. Neighboring Hurlburt Field, built in 1942, is home to Name of Employer Nonfarm Payroll Sector Employees the Air Force Special Operations Command. In addition to the $1.6 billion Eglin Air Force Base Government 5,000 in salaries, more than $2 billion was spent on direct expenditures by these Hurlburt Field Government 1,950 military operations in 2016. The economic impact on the surrounding region Sandestin Golf and Beach Resort Leisure & Hospitality 1,800 is estimated at more than $5.5 billion (Enterprise Florida). In Okaloosa County Walmart Inc. Wholesale & Retail Trade 1,363 Fort Walton Beach Medical Center Education & Health Services 1,222 in 2016, the military accounted for an estimated 72,000 jobs, including Northwest Florida State College Government 1,081 military and civilian payrolls as well as indirect positions supported by the Okaloosa County Government 936 bases (Enterprise Florida). Operations contribute to continued growth in the Reliance Test & Technology, LLC Professional & Business Services 750 professional and business services sector because many small companies in North Okaloosa Medical Center Education & Health Services 652 the HMA fulfill Department of Defense (DoD) contracts. BAE Systems, Inc. Manufacturing 545 Notes: Excludes local school districts and active military. Only civilian employees were included. Sources: Economic Development Council of Okaloosa County, Florida; 96th Force Support Squadron Current Conditions—Nonfarm Payrolls Marketing Office; Hurlburt Field 1st Special Operations Wing Public Affairs Office The leisure and hospitality sector, the largest sector in the HMA, has added Table 3. 12-Month Average Nonfarm Payroll Jobs the most jobs of any sector since the economic recovery began in 2011. in the Crestview HMA, by Sector During the 12 months ending February 2019, sector payrolls increased by 12 Months 12 Months Ending Ending Absolute Percentage 600 jobs, or 2.9 percent, compared with a gain of 800 jobs, or 3.5 percent, February February Change Change during the 12 months ending February 2018 (Table 3). The many hotels and 2018 2019 restaurants added along the southern coast of the HMA since 2014 continue Total Nonfarm Payroll Jobs 113.4 116.3 2.9 2.6 to add jobs. The Sandestin Hotel, which broke ground in 2018, is expected to Goods-Producing Sectors 9.8 9.9 0.0 0.4 Mining, Logging, & Construction 6.6 6.9 0.3 4.0 add 250 rooms to Village at Baytown Wharf in 2020. The government and the Manufacturing 3.2 3.0 -0.2 -7.0 wholesale and retail trade sectors are the next largest and account for 18 and Service-Providing Sectors 103.6 106.4 2.9 2.8 16 percent of all nonfarm payrolls, respectively.