Business is good right now. Real estate analyst Charlie Clark said at last month’s SMC meeting that low interest rates and an appreciation of value made 2003 the best year in housing since 1978.
Our question to you is:
Real estate really seems to be booming since 2004 started. Why?
“I don’t think this is a new event of 2004. Business has been booming for the last three to five years. Why? I can answer that in one word – football. I lived in Tampa when they were awarded the Buccaneers in 1976 and the town went from a quiet little burg to a mass of incoming hoards as soon as those northerners heard Tampa existed. I believe the same is true for Jacksonville. Now that the world knows we’re here and they’re all descending on us and want to live in our little Eden. [Low rates help, too.]”
— Carolyn Minor,
Countrywide Home Loans
“With interest rates so low, folks are able to afford a house for the first time or upgrade to a larger home with the same payment. It wasn’t to long ago interest rates ranged from 8 percent to 11 percent. This could mean a difference of a couple of hundred dollars. Everyone is jumping on the bandwagon.”
— Eddie O’Keefe,
Praneta Financial
“A lot of it has to do with how attractive our area is and the growth we are having.”
— Walter Williams,
Coldwell Banker
Walter Williams Realty, Inc.
“Being on the mortgage side of real estate, and observing the market on a constant basis to ensure the best rate for my customers, the biggest reason is for investment. With the Enron crisis, the fall of the Martha Stewart empire, etc. and so many people losing money in the market over the last couple of years combined with the historically low interest rates, consumers have turned to property investment. I have actually had clients’ cash in nearly all stocks and retirement funds to use as a down payment on investment property. There will always be a demand for land.”
– Aleia Haney, Beckman Mortgage Company
“It seems that without a doubt that the low interest rates certainly allow more folks to qualify for home mortgages. I have heard a couple of economists, over the past couple of months; say that our economy should remain healthy for 2004 and 2005 and that the rates should remain low for that time period as well. Hopefully, Mr. (Alan) Greenspan will help the consumer by doing just that.”
—André Boutte,
Watson Realty
“Yes, low interest rates are certainly a factor. I believe this city is prospering because Jacksonville has always been a city that has been lifted up in prayer by our mayor, city officials and business leaders. The Northeast Florida Builders Association and the Sales and Marketing Council have always opened their events with prayer. God’s word says ‘whenever two or more agree in His name it shall be given to them by the Father’. God listens to the prayers of His faithful and blesses those who seek righteousness. Our economy, the city and the housing industry is blessed because knees are bent and hearts are faithful.”
— Cynthia Montello,
The Montello Agency, Inc.
“We have not experienced one single contributing factor. We have had people coming in from all over, in all shapes and sizes, old and young, rich and poor. I personally believe there are two economic factors driving the market: The stock market has gone back up enough so investors can cash in and move to real estate without taking such drastic losses losses, and investors with maturing Certificates of Deposit are not rolling them over at low yields. This is also driving cash to the real estate market.”
— Tom O’Connell,
Watson Amelia Island
“Three words: rates, rates, rates. As long as they keep the scare of change of rate and the rate continues to be reasonably better than our past, the market in Northeast Florida will continue.”
— Todd Arnold,
Kent and Associates Realty
Services
“The Jacksonville community has consistently done well in the real estate arena, assisted by such factors as a growing city, expanding businesses, and record breaking new construction permits. Coupled with low interest rates and a great place to live, our real estate market has never been stronger. And with Jacksonville being named the 19th best city for small businesses by Entrepreneur.com, it’s no wonder we consistently do well.”
— Phyllis Staines,
Re/Max Coastal Real Estate
“Real estate is still recognized as a wonderful investment! And 2004’s attractive interest rates just fuel that fire!”
— Clare Berry,
Berry & Co. Real Estate
“Low interest rates are always a key ingredient to a good real estate year, but we are also seeing many more investor buyers putting their confidence and their money into real estate rather than the stock market these days.”
— Pam Bingemann, Bingemann Realty Sales
“Lower interest rates are a big factor in the recent housing boom. The median income for a household in Jacksonville is $40,316, and the median income for a family is $47,243. If we take simple numbers we can say that the average family in Jacksonville makes $4,000 a month. I would estimate they have approximately $750 in car, credit card, and other debts. With this you can say at 8 percent interest rate on a 30 year fixed they can be approved for a home worth $107,000 with 10 percent down payment. You can say that at 5.5 percent they can be approved for $131,900 house with 10 percent down. Ask any Realtor and they will tell you that finding a good $131,900 home is easier than finding a good $107,000 home. The rates basically open up the range of homes to people that would otherwise not be able to buy. After that, simple economics plays a role in the appreciation. More demand is creating an inflation in housing prices.”
— Scott Patton, Patton Home Lending
“I agree with the statement about the great interest rates and appreciation of value statement. I also think that more of the general public is looking to real estate for their investments, and security for their financial future. I have even gotten phone calls from folks I would have never thought would have considered an investment property, just because of their actions and words from conversations previous.”
—Jason Hoffman, Coldwell Banker Palazzo Realty, Inc.
“I feel that the low interest rates combined with the marketing of the city is what is creating the boom. What I mean by that, is that the city by bringing the Super Bowl and the high paying jobs into this area have provided us in the real estate industry an enormous pool in which to draw our clients from. As long as we continue to market our fair city as an international city we will continue to grow.”
— Jon Gaskins,
Mercedes Homes
“I really feel that the interest rates have a lot to do with it, but I also feel that it’s the assortment of builders in choice location. Buyers have so many choices now that they can basically get what they want. Builders are building in every part of town with different price points to suit the buyer. That’s my thoughts.”
— Christopher Allen,
Admiral Homes
“Low interest rates and continued appreciation are definitely driving the market. Other factors do seem to be affecting our market, however. I believe the overall ‘positive’ atmosphere and visible growth in our community are also forces. The Super Bowl, even though it is only one event, is acting as a catalyst to make things happen in the way of growth and development that, otherwise, would have taken far longer to accomplish. Our city and the surrounding metropolitan area will be the beneficiary of a huge amount of both national and international recognition during the upcoming year. We are truly making our place on the map. Another factor that is sustaining the market is the fact that more and more investors are opting to invest in the real estate market instead of the stock market. Although this is having a definite effect on the supply and demand concerning rental property, this factor continues to contribute to a brisk sales market. All in all, I believe that anyone looking to buy property, whether as a primary residence, second home or investment, is feeling a sense of urgency to do so before interest rates go up or prices rise to the next level. I fully expect the market will continue at this fast pace throughout the better part of this year.”
— Sue Ann Ogden,
Suncastle Properties, Inc.
”I think because the interest rates are this low, sellers really want to sell and buyers really want to buy. So I think that when the rates are low like they have been there are more sellers which mean more property to choose from therefore it brings more buyers and more business for the real estate agents, banks/mortgage companies, title insurance companies, surveyors, pest control companies, insurance agencies, etc.”
— Deb Brunner,
Watson Title Services of St. Augustine, Inc.
“Add 300 thousand plus new residents in the state in 2003 with 20 million more predicted in the state by 2030. I believe another factor is the baby boomers in the cold north are retiring in record numbers and the ones with the means want to retire in Florida.”
— Wayne M. Jones,
Watson Realty Corp.
“Your best buy is real estate! The stock market is not predictable and the interest rates are great! I think it may turn and become a seller’s market because of the activity.”
— Josie Deal,
Coldwell Banker Real Estate
“Just look to the Wonderwood Connector’s completion and with it the possibility of a nuclear aircraft carrier at Mayport as well as the up spin there with the movement of Southern Command to Jacksonville. That coupled with the upcoming Super Bowl has put Jacksonville on the map and people want to live here. OakLeaf Plantation and the new Eagle Landing as well as the rapidly growing Dames Point areas have made our little jewel of Florida a hotbed of activity.”
— Bill Thompson, Watson Realty Corp.
“Business is booming since 2004 not only because of the great interest rates and appreciation of value but because our unique area is just awakening as a great city. I have several customers from outside our area who have fallen in love with what we have to offer: the ocean, beaches, river, southern hospitality, sports, culture, etc. Top all that off with great neighborhoods and schools!”
— Nina Marie Halter,
The Real Estate Resource
“While interest rates are certainly the major motivator for new home purchases, several other variables are working in our favor at the same time. Many consumers are realizing that real estate is a safe haven for their money and that history proves that the return on the investment is better than most other choices. Jacksonville is also now on the radar screen as a ‘great’ city to live and work in. In order to be competitive, builders are being forced to become better and more conscious than ever before of design and detail, and energy and environmental concerns. Many consumers are seeing this and are deciding that now is the time to purchase a new home. Companies considering Jacksonville as their new location also make housing availability and quality a number one priority for their employees and we fair well on this count. Jacksonville has all of the right elements aligned at the same time making the housing market in 2004 a win/win for all involved.”
— Karen Sutherland,
ICI Homes.