It’s only the beginning, but Florida pool builders think there might be reason for optimism

It was in Florida that the recession hit first. The land of sunshine, citrus and Disney World was in economic freefall before AIG and Lehman Brothers reached most-Googled status. In the process, the local pool and spa industry saw its numbers drop 80 to 90-percent.

But now builders in the state think they’ve hit bottom, and are maybe even beginning to hover a few inches above it.

“There is a glimmer of hope on the horizon,” says Dan Johnson, owner of Swim Inc. in Sarasota, Fla.

Several builders reported a slight uptick in activity beginning in December and continuing through the first two months of 2010. Make no mistake — this isn’t a miracle recovery. But the numbers are a little higher and customers seem slightly more confident.

“I think everybody’s feeling more positive,” says Wendy Parker, executive director of the Florida Swimming Pool Association. “I think that was getting across at the Orlando Pool & Spa Show. What I was hearing then was that people are just feeling better about everything right now.”

Gentle rise

The permit numbers would back up this cautiously optimistic mood.

December 2009 saw 652 pool permits pulled in most Florida counties, compared with 584 the same time last year. This January, 652 new installations were begun, compared with 594 the same month in 2009. And February brought 657 permits, compared with 602 the previous February. That’s an 11.6-, 9.8- and 9.1-percent climb, respectively, from December to February.

“We’re not talking tons of pools,” Johnson says. “But we sold 10 in December, which was more than we’d sold in the last three months. We were selling seven, eight, then we hit 10 in December and 11 in January.”

Urban centers seem to be enjoying this recovery the most, observers say. Orlando, Tampa, Jacksonville and Fort Lauderdale reported increases, with conflicting information from Miami.

The Space Coast, where the space industry is preparing to shut down, is understandably still lagging. But even some builders there report activity. “We have people buying entry-level pools who I wouldn’t have expected,” says Michael Schnider, president of Intercoastal Pool and Spa Builders Inc. in Melbourne, Fla. “I would have thought that it would be doctors or lawyers — people who have money available. But I’ve seen a lot more of just your regular people calling in here. There are a lot of tire-kickers, but a lot of them are buying, too.”

One reason discussed is that the state is seeing an influx of people in search of bargain homes. Prices have dropped as much as 75 percent from the heyday, which leaves a little money to add a pool. “There are some baby boomers who decided that they just couldn’t afford to wait it out,” Johnson says. “So they took a loss on their home up north and moved down here. They discovered that the savings on the home they bought here more than offset the loss they took up there.”

Some also suspect that the tax credits given to those who bought homes in 2009 already are helping and will bring in more business — both in new construction and renovations.

As would be expected, the high end seems to be recovering more quickly. “Because the stock market’s come back, the people who have money and don’t need financing are feeling comfortable about spending a little bit,” says Jeff Fausett, president and CEO of Aquatech Corp. in Costa Mesa, Calif. “They know they’ve got a job, and their savings and investment accounts are doing ok.”

Looking ahead

Besides enjoying the modest sales increases, these builders have found hope in other indicators as well.

Many believe that home prices have hit bottom and are actually beginning to move up. “We’ve had about five months where house pricing had actually gone up a little bit, and sales have gone up,” says Ken McKenna, president of Tampa Bay Pools in Brandon, Fla., a Pool & Spa News Top Builder.

The inventory of new homes seems to be nearly exhausted, and some builders even hear of activity from large home builders ready to work on spec homes. In addition, people seem to be moving back into the state. In 2008 Florida saw negative population growth for the first time since World War II, but it grew modestly last year.

Still, new-pool construction in Florida clearly has a long way to go, and competition over pricing remains as brutal as ever.

The bargain-hunting consumers that are causing home sales to rise have influenced the pool market as well. When customers see that homes are marked down 75 percent, they expect that pools should follow suit. “One customer, for example, got the house for $65,000. They want a pool, deck, screen and everything, and it’s at $40,000. They can’t understand that. They want it at $20,000,” says Pete Cocarro, president of Nautilus Pools in Port Charlotte, Fla.

As a result, Florida builders are still selling fewer feature-packed pools than before. “I would say, on an average, the pools are still probably 15-by-30 feet, and they’re mostly all getting a screen,” Schnider says. “As far as upgrades, most of them are getting some kind of sheet fall or little waterfeature —something inexpensive.”

But industry professionals hope that when the state moves past its metaphorical and literal winter — both of which have been the coldest in memory — the industry has even brighter prospects.