by Mike Sharkey
Staff Writer
Things are going so well in the real estate industry in Northeast Florida these days you would be hard-pressed to find many folks who remember the dark ages. In the 1970s, the whole buying and selling process could take, literally, months. In the early ‘80s, interest rates peaked and home sales came to a virtual stop.
How times have changed. Northeast Florida is one of the hottest areas in the country as abundant land, a plethora of developers, a year-round climate that’s tough to beat and plenty of amenities have created a near frenzy. Interest rates, without a doubt, also play a role.
“I think the long term rates will stay relatively stable,” said Wyndham Manning, regional mortgage manager for Branch Banking & Trust Co. “The short-term rates will rise a little and the adjustable rates will go up a little over the next 24 months. Right now, the prime rate is right below six percent. Inflation can change that, but the market is keeping inflation under control.”
Manning has been in Jacksonville since 1973 and, with 32 years in the mortgage business, he has seen it all. He has survived near 20 percent interest rates, barren offices and technological advances that have made home buying as easy as buying a car.
“The basics have always been the same. The people change, the clients change and the builders change,” said Manning, who sat on a panel that discussed current interest rates at last week’s Sales & Marketing Council monthly meeting at the University Center at UNF. “Technology has changed the way we do approvals. In the 1970s, it was not unusual for it to take two to three months to get a loan approval. Now, it takes minutes.”
The worst of times for mortgage brokers was the early ‘80s. Technology hadn’t made the job easier yet and runaway inflation was crippling the entire country. Even Jacksonville, which is considered practically inflation-proof today, was in trouble.
“It hit 18 percent in 1981. Inflation was bad and we were dead in the water,” explained Manning. “We had four offices in town and three loan officers in them combined. It took about two years to get out of that cycle. We thought we would never see single digits again. Now, we’ve had about 10-plus years of single digits.”
Like most mortgage brokers, Manning sees the current trend continuing for several more years. Affordable, desirable land, a strong local economy and low interest rates all combine to given lenders reason to look at least 5-10 years out and see nothing but growth and dollar signs.
“The most important part of the real estate transaction may be the lending aspect,” said Brad King, vice president and mortgage loan officer for BB&T, who moderated the panel discussion. “The most important things to do are one, get the client on paper and two, make sure they can pay for the property.”
Carolyn McMoran of Countrywide Home Loans believes the current prime interest rate will indeed go up in the near future and says that rise may startle some in the real estate business.
“It’s going to go up, mark my words,” said McMoran. “All these new agents and loan officers have never seen a rising market. People will still buy homes, they will just have to get creative with their financing.
“I don’t think we will ever see anything like Black Monday (October 19, 1987) when rates went up two to three percent in a couple of hours.”
McMoran said her company is prepared for a slowdown in the local real estate business and has a plan in place to protect itself and local property owners.
“If things go south, investment property will go first,” she said. “Countrywide is going limit the number of investors to protect the community.”
Manning paints a rosier picture.
“Northeast Florida is extremely attractive for the Baby Boomers. They are coming from all over the country to retire here,” he said. “I think the next 10 years will make the last five look like we were going through a wall.”