January 2008 -- Experts say keeping on top of today's competitive housing market is a challenge that requires an innovative touch.
Without a doubt, it's a confusing time in the real estate market.
On one hand, existing single-family home sales in Northeast Florida declined by 38 percent and there were 30 percent fewer new homes built last year than in 2005. On the other hand, slowing sales and rising inventory means more bargains for buyers as builders try to work down excesses.
How long will the buyer's market last? Florida just recorded 60 consecutive months of job growth, which means plenty of people are still relocating and will need places to live. Likewise, Northeast Florida's underlying economy remains strong and its lifestyle is no less appealing today than it was two years ago, during the housing boom. So what will happen over the next 12 months? We've assembled a high powered panel of builders, developers and real estate professionals who'll offer some insight.
From the building industry we talked to Randy Long of J.A. Long, Richard Dalton of Morrison Homes and Glenn Layton of Woodside Homes. Weighing in on development issues were Paul Fletcher of Fletcher Management Company, Jay McGarvey of McGarvey Residential Communities and Joel Embry of Amelia Park Development. And our Realtor experts were Rob Holland of Marsh Landing Realty, Mary Ann Bongiorno of the St. Johns office of Watson Realty and Bonnie Siecker of Century 21 Dames Point Realty. Seicker is also president of the Northeast Florida Association of Realtors (NEFAR).
All agree that 2008 won't see a return to the frenzied building and buying levels of 2005. But they also agree that activity will begin to pick back up and that buyers now have a rare, and likely temporary, opportunity. Why? First, in Northeast Florida there are nearly double the number of homes for sale today than there were a year ago at this time. Second, excess inventory has eased upward pressure on prices. And third, mortgage interest rates are still hovering under seven percent.
Developers and builders are also getting more creative about setting themselves apart from the competition, says J.A. Long Chief Operating Officer Randy Long. "They're using green design, equipping entire neighborhoods with natural gas, and making hot items like summer kitchens or mother-in-law suites standard amenities," Long notes.
The best news is that buying a home remains an excellent long-term investment by just about every measure. "Real estate is a home, a shelter from the elements, a hedge against inflation and a place to raise your family," says broker Rob Holland of Marsh Landing Realty. "All with tax benefits."
Here's what else our panelists had to say about what to expect in the housing market this year:
Question: What is the outlook for the building industry for 2008?
Randy Long: The market still has an over supply of investor resales and new homes, but I think that recovery will continue slowly. There are still a lot of buyers out there because of relocations, people desiring bigger or nicer homes and enlarging families including a segment of the population taking in elderly parents.
What are the major factors influencing your outlook?
Randy Long: Unfortunately, there's still a lot of negativity in the media regarding housing issues. We've also heard from customers who are eager to begin designing a custom home but are facing uncertainty in selling their current one. One additional strain on the building industry is the effect of impact fees on new developments.
Are you employing any strategies to help with market conditions?
Randy Long: We've certainly stepped up advertising directly to customers and Realtors and have lowered prices. But, we've also focused on using innovative and exciting strategies in the homes we're building, adding popular features like summer kitchens, upgrading to wood and tile flooring and using green building techniques.
Are there any new building trends that buyers should be aware of in the upcoming year?
Randy Long: We expect the popularity of mother-in-law suites for aging parents, outdoor living areas with summer kitchens and multi-use entertainment rooms to continue. Homes will also continue to be more efficient and green as more builders become affiliated with organizations such as the Florida Green Building Coalition.
