By Jean Sealey
Northeast Florida Builders Association
David Berson, the Fannie Mae vice president and chief economist, says North Florida’s future is “stronger as ever.”
Berson spoke on the national economy and Northeast Florida’s residential construction industry last month at the Bank of America on Southside Boulevard.
Citing data from the U.S. Commerce Department, Berson said business for home builders should be even better than last year. He said 2005 should be another record year for Northeast Florida.
“In general, we see unemployment edging down and inflation edging up,” Berson said. “Nationally, new-home sales may slip and prices are expected to go up but conditions are a little different here. Northeast Florida looks stronger than ever.”
Berson said the Federal Reserve Board is tightening monetary policy to rein in the economy and to avert inflation, which translates to a modest increase in long-term rates.
Berson pointed out that 69.2 percent of Americans are homeowners and, he said, there was a big jump in new-home sales in 2004.
“Two cyclical factors affect housing demand - affordability and consumer confidence,” he said. “Beyond those factors, demographics play a large role. In Northeast Florida, the demographics are very positive. People move here because of the climate, the large banking and services industry and the military bases.”
The Jacksonville metropolitan area has some of the strongest in migration in the country, Berson said, and that is not expected to change.
In summary, Berson said the economic growth has settled in at slightly above trend rates. Berson believes the Fed will tighten its monetary policy over the next two years. Nationally, he sees housing falling modestly in 2005, but the drop will be less - if it occurs at all - in Northeast Florida.
Sponsored by the Northeast Florida Builders Association and the Fannie Mae North Florida Partnership Office, the seminar was hosted by Ross McWilliams and Jeff Zimmerman of Bank of America.
Berson is considered the nation’s foremost authority on the trends and key events that will shape the housing industry and economy in 2005. He heads Fannie Mae’s Economics Department, forecasting and analyzing the economy, interest rates and the housing and mortgage finance markets.
He advises Fannie Mae’s chairman and operating committee on finance, economic, tax and housing policy issues. As a principal member of the Corporate Development Division, he is a senior participant in Fannie Mae’s strategic planning process.