With an unexpected rise in gas prices this fall and a declining housing market, Florida's consumer confidence is expected to continue to dip despite a one-point increase to 79 out of 100 this month, according to a UF report.
"From a consumer's point of view, things are not going to be rosy the next few months, maybe even up to a year," said Chris McCarty, director of the Survey Research Center at UF's Bureau of Economic and Business Research.
Home equity, the value of a mortgaged property after deduction of charges against it, has been up in the last five years, said McCarty.
Equity loans have allowed for much of consumer spending during that period. With home prices decreasing, consumers will no longer be willing or able to depend on equity loans, he said.
Within the next year, homeowners will be unable to sell property and will be forced to rent.
Rental rates might drop in Gainesville, and the availability of rented houses could rise, McCarty said.The housing issue will also amplify the state budget crisis leading to cuts in student services.
"Now this is not going to be all doomsday stuff," McCarty said. "It will all turn around when house prices come down enough that inventory clears."
