Christopher Woodward Research

Category: Economics

  • The housing market in Navarre, Florida could be at risk with rising fuel costs

    The housing market in Navarre, Florida could be at risk with rising fuel costs

    Local transportation is the third highest household consumer expenditure for Navarre, Florida (U.S. Census Bureau, 2026). The mean commute time for people living in the Navarre, Florida area has historically stayed around 30 minutes (U.S. Census Bureau, 2024). If the mean commute time remains about the same as it has for many years while fuel costs continue to rise, the risk of household insolvency will substantially increase.

    Without localized job-growth in the Navarre area, inflated costs of transportation and high fuel costs will eventually make living in Navarre impossible for most people, which will lower property values correcting for housing inflation from 2021-2022. This correction is going to create a lot of bad debt from mortgages being more than the home is worth and people selling for a loss to move to an area that provides more opportunity.

    The more people move into Navarre, without jobs that pay a reasonable living wage or salary moving in with them, the more friction is added to Highway 98 as people must commute on Highway 98 to go somewhere they can work; the same is true of Highway 87. As bumper-to-bumper traffic sitting at a standstill becomes more and more a problem, fuel usage will increase substantially. If you pair this with rising gas prices, you get an unsustainable way of life for the majority of people. There is speculation that adding lanes to the highways is the solution, but I believe this is incentivized by a local county government dependent on residential development.

    Housing developments are historically easy to get approved when the developer builds the roads and sidewalks in the neighborhood and keeps it all private-owned within a home-owner’s association. This means the local government can collect property tax dollars without paying a dime to maintain the infrastructure. Inevitably, the underlying truth that the local government still must hook the properties up to city water and maintain the water lines, police the area, provide a school for the children, and maintain public roads these new residents will use daily catches up to them financially, and they are left with the simplest move to make which is approve more building permits and repeat the process. This nearsightedness is exactly what is creating the economic (and social) tension for the Navarre area. More and more people moving in without job growth creates fewer opportunities. This causes rising unemployment, which lowers wages and salaries, exacerbating the issue.

    This brings me back to my point that this increasing friction on the roadways from unsustainable residential growth, rising fuel costs, and diminishing opportunities will eventually trigger a trend in people selling their properties and moving closer to where they work. This is also going to cut into tourism development tax income for Santa Rosa County as people who were using platforms such as Airbnb and staying in hotels in Navarre to save money may decide it’s better to spend the money and stay in the areas where they want to spend their time avoiding having their vacation ruined by the traffic and frustrated other drivers. There are metrics local developers and small governments love to boast, but there is also on-the-ground truth, and the truth is Navarre is trending downward in appeal for residents, vacationers, and investors alike.

    The evidence of this playing out will start with symptoms of stretched budgets such as the roads decaying. Potholes go unrepaired, or fixed with patch work rather than roads being taken up and replaced with a good solid structure. The Navarre Beach Causeway will get a toll again because there isn’t enough money to maintain the bridge. Local sales taxes may increase. Then to support the growth narrative, the money will be used for funding expanding the highways rather than fixing the real problem. Navarre may eventually incorporate in an attempt to gain independent control over the area from the county, but will then impose new municipal taxes to pay payrolls for the locals who want to capitalize on the opportunity at a government job with government benefits in an area that doesn’t take care of them. There will be more local inexperienced politicians with incentives to please those who got them the government job which will drive costs even higher for businesses and residents, exacerbating the problem more.

    The reason Navarre is becoming an area to avoid is that eventually the county will run out of land surface area. The exact thing that draws so many speculators to real estate is the thing that kills small communities who run things this way: they run out of room to expand. When they cannot develop anymore the scheme falls apart, and the structure fails as it has no real foundation. This is the same ponzi scheme that shows up in private equity, only a local government gets away with it.

    Navarre is faced with a difficult situation where it needs more businesses that can employ many people and pay them well, but at the same time, it’s not a good investment to start a business in Navarre as most people likely cannot afford to spend more than they already are. The businesses would have to be there making enough to employ the residents so the residents would have enough money to spend, and that is likely to not happen.

    My opinion on this development is yes, it should be stopped immediately; however the local economy is dependent on this development as residential development creates property tax dollars the county needs and the new residents feed the service-based businesses that don’t make enough to provide jobs and don’t pay reasonable wages when they do, at least until those residents sell and go where the money is or go back where they came from.

    Santa Rosa County is depending on neighboring areas to provide a livelihood to Navarre residents who still have to pay property taxes and deal with the friction of living in the area among other demoralized and frustrated residents and drivers.

    References

    U.S. Census Bureau. (2024). COMMUTING CHARACTERISTICS BY SEX (American Community Survey, ACS 5-Year Estimates Subject Tables, Table S0801). https://data.census.gov/table/ACSST5Y2011.S0801?q=navarre+florida


    U.S. Census Bureau. (2026). Census Business Builder (CBB) report: Zip code tabulation area 32566 [Interactive data dashboard]. https://cbb.census.gov/cbb/#view=report&industries=00&clusterName=Custom+Industries&geoType=zcta&dataVariable=179&dashboardVars=15-17-1-64&centerX=-9676479&centerY=3558147&level=12&theme=default&geoId=32566&dynHeader=Custom+Region

  • How Unemployment Affects Businesses in Tourism and Service-Based Economies in Northwest Florida

    How Unemployment Affects Businesses in Tourism and Service-Based Economies in Northwest Florida

    Introduction

    The thing to remember about unemployment is when unemployment goes up, wages go down. If people don’t have any money, you don’t have a good economy.

    Businesses

    Unemployment first directly affects those unemployed. People with low or no income begin spending less and budgeting more aggressively. When their savings is used up, their spending stops entirely or they are forced to use credit (using credit to stay afloat is a vicious cycle I will dive into another time). Since all businesses are dependent on customer spending, revenues inevitably decrease leading business owners to begin the same pattern as the customers: cutting costs to stay afloat and maybe even depending on credit.

    The Cycle

    When the customers don’t have jobs, they don’t have money and have to stop spending; when customers stop spending, business don’t have money and have to stop spending. Businesses cut costs by cutting hours and hiring less people. Unemployment rises more. You get a slowing unsustainable economy.

    Tourism Economies

    These cycles occur frequently in tourism and service-based economies. There are little to no major career opportunities so you have a lot people working in hotels and restaurants for minimum wage. When unemployment rises, the labor pool is so competitive the business owners have no incentive (or the budget if the business is weak) to pay any more than they are legally required. This strains the local economy, and makes it even more dependent on tourism income.

    Real Estate

    When tourist and service-based economies experience this strain, a demand for real estate development appears to bring in more locals with money. This creates a housing boom in the area as the economy is strained because no one has money because there are no opportunities, so land and housing is cheap.

    Population Growth without Job Growth

    Most of the people that move in will be people with plenty of money looking for a simpler life and a lot more fun. Many of them will be cash buyers, while others will have a mortgage. It’s at this phase, these people moving in need to be creating more jobs. If they are not high-value job-creating members of the community, inevitably the labor pool will be even more saturated as their money dries up due to housing costs being inflated by the local housing boom and population increase in an area that did not provide them opportunities to sustain it.

    The Cycle Repeats

    This cycle will repeat over and over again until it is either broken by government intervention where zoning laws are increasingly more strict to cap residential building as time passes since it is hurting the economy for the people already there, or you have a housing crash where there is a major trend in residents listing their homes for sale and moving and/or a vast increase in foreclosures.

    Businesses Consistently Struggling

    Businesses will see their margins consistently thin no matter how much residential growth there is in the area as long as job growth doesn’t equal or outpace the residential growth. Many small business owners especially will believe more is better, and they will miss the caveat where the more customers there are, the more prices will be inflated, and lower the wages will be, and the higher the unemployment will be.

    This economic model is risky and common in emerging markets. Business owners should be brave enough to take a contrarian approach, focus on customer retention putting local regular customers ahead of one-off tourists, and manage their finances and business structure well because in this environment “growth” looks different than what people think.

  • Tourism is Slowing

    Tourism is Slowing

    Tourism in terms of real dollars has been on a downtrend in recent years. With inflation driving up prices and seasonal spikes in revenue creating illusions in surface-level data, it makes sense there would be pressure on margins for tourism-dependent business owners.

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