1. An Economic Forecast in Uncertain Times Orlando, FL May 22nd, 2014

2. U.S. Forecast  Policy Uncertainty Still Hangs Over the Economy  Health Care Reform  Impact on labor market  Delayed mandates  Dodd-Frank Financial Regulatory Reform  Impact on credit flows & financial sector  45.7% (128)  Fiscal “Cliff”  Sequester, shutdown/debt ceiling …  Monetary Policy

3. U.S. Forecast  The economic impact of economic policy uncertainty Statistical analysis shows that higher policy uncertainty causes: 1.Lower private investment 2.Lower industrial production 3.Much lower employment

4. Economic Policy Uncertainty Index

5. U.S. Forecast

13.  Sky Mall™ Policy:  An Expensive Policy that Fails to Achieve its Desired Outcome

14. U.S. Forecast

17.  Sky Mall™ Policies:  T.A.R.P.  Foreclosure Prevention Act 2008  ARRA of 2009  Shovel ready projects  Making work pay tax breaks  Affordable Care Act  Dodd-Frank  HIRE Act 2010

18. U.S. Forecast  Lost housing wealth  Weak labor market recovery  Both have weighed on consumers  “Mini age of austerity”

19. U.S. Household Wealth (Trillions of $) 2005200620072008 2009 Q1* 2013 Q4 Total Assets 71.378.679.566.6 62.8 94.4 Financial Assets 42.949.051.442.2 39.6 66.9 Home Equity 13.212.810.37.0 6.1 10.0 Net Worth 59.165.1 52.4 48.7 80.6

20. U.S. Economic Outlook 2013 Q3 2013 Q4 2014 Q1 201420152016 GDP % Change, Annual Rate 4.12.6-0.82.42.62.9 Consumer Price Index % Change, Annual Rate 2.21.11.81.51.41.7 Consumer Sentiment 81.676.980.9 81.482.5 Consumption % Change, Annual Rate 2.03.32.72.32.62.9

21.  Monetary Policy  The job of the Federal Reserve is to take away the punch bowl just as the party gets going William McChesney Martin Former Fed Chairman U.S. Forecast

22. Florida Housing Market  Housing market recovery continues to unfold  Double-digit price appreciation  High level of investor activity  Housing finance still problematic  Will momentum be maintained?

23. Florida Housing Market

25. February 2014 February 2013 Percent change Closed Sales15,82615,5911.5% Median Sale Price $165,000$150,00010.0% Median Days on Market 6162-1.6% Inventory ( Months Supply ) 5.75.52.1% Florida Housing Market

26.  Investors are still active in Florida residential real estate  Evidenced by high share of cash transactions  Private equity & hedge funds  Is this a good thing or a bad thing?

27. February 2014 February 2013 Cash as % of February 2014 Sales Florida7,5967,92848.0% Miami1,4291,38049.2% Tampa1,1221,24347.4% Jacksonville50729044.2% Orlando 69584741.4% Housing Market Cash Sales

28. Housing Market  Housing Finance  Unsustainably high share of cash transactions  Mortgage availability has been restricted by  Dodd Frank  Capital Standards  Underwriting Standards  Limited Private Securitization  Demise of Mortgage Brokering  Shell shock  Is this a good thing or a bad thing?

29. Florida Forecast

38. 2014-2017 Averages; Q1 2014 Forecast Florida Sector % Average Annual Growth Construction8.7 Professional & Business Services4.3 Trade, Transportation & Utilities4.0 Education-Health Services2.3 Leisure & Hospitality1.9 Information1.8 Manufacturing1.3 Financial0.8 State & Local Government0.6 Federal Government

39. Region Population Growth Average % ChgRank Florida 1.4--- Deltona 1.18 Gainesville 0.412 Jacksonville 1.44 Lakeland 0.910 Miami 1.25 Naples 2.51 Ocala 1.73 Orlando 2.02 Palm Bay 0.911 Pensacola 0.99 Tallahassee 1.17 Tampa 1.26 2014-2017 Averages; Q4 2013 Forecast

40. Region Employment Growth Average % ChgRank Florida 2.4--- Deltona 1.811 Gainesville 1.512 Jacksonville 2.26 Lakeland 1.99 Miami 2.34 Naples 4.31 Ocala 2.63 Orlando 3.02 Palm Bay 2.07 Pensacola 1.98 Tallahassee 1.910 Tampa 2.35 2014-2017 Averages; Q4 2013 Forecast

41. Sean M. Snaith Sean M. Snaith, Ph.D.Director Institute for Economic Competitiveness (407) 823-1453 Sean@SeanSnaith.comWWW.IEC.UCF.EDUwww.facebook.com/seansnaith Twitter: @seansnaith Thank you