Housing market kept shine in 2001
Jacksonville-area
home sales up despite a recession and terrorist attacks
By Earl Daniels
Times-Union business writer
Recession or not,
it was time for Bert and Marcia Keaton to buy a house.
The family had outgrown an apartment.
"My son needed more space, and we wanted a more stable home
environment," said Bert Keaton, who in October moved into a new
Northside house in Cambridge Estates with wife, Marcia, and sons,
Jatarvis, 11, and Jamal, 15 months.
| Affordable housing
Jacksonville is the most affordable housing market in the
state and among the tops in the nation when compared with the
area's median income. Affordability is based on what
percentage of houses in a certain market a family that makes
the median income can afford to buy a house. In Jacksonville,
households that earn a median income of $77,000 could afford
to buy 55 percent of the houses sold in the area, according to
the National Association of Home Builders.
Here is how the 2001 average price of a new house in the
Jacksonville area compares with other Florida cities:
Fort Lauderdale -- $138,000
Miami -- $134,000
Orlando -- $130,000
Jacksonville -- $126,000
Tallahassee -- $118,000
Tampa area -- $116,000
Gainesville -- $109,000
Brevard County, Melbourne area -- $104,000
Daytona Beach -- $100,000
Source: Northeast Florida Builders Association
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The
Keatons are among the thousands who bought new and existing houses
in Duval, St. Johns, Nassau and Clay counties in record numbers last
year.
The strong sales of new and existing houses during a recession
and the slowdown following Sept. 11 are an indication of the
resiliency of the housing market. Even though lower interest rates
motivated some home buying, lifestyle changes, such as a new job or
relocation to the Jacksonville area, created a strong demand for
homes. The idea of home ownership as a good investment also is
gaining popularity, especially when compared with investing in the
stock market in uncertain times.
Real estate observers say they expect 2002 home sales to mirror
2001.
Last year, sales of existing houses increased by 5 percent
compared with 2000, according to monthly statistics by the Florida
Association of Realtors in Orlando. The Realtors assocation will
release tomorrow its official year-end tally, which could adjust the
total 2001 sales figure.
New-home sales, which are gauged by the number of building
permits filed at local county building departments, increased 24
percent between 2000 and 2001, according to the U.S. Census Bureau.
The increase in home sales in the Jacksonville area was better than
state totals.
"Every area is as hot as a pistol," said Charlie Clark, a local
observer of the area's housing market. "There is not an area that is
not experiencing good sales. I have never seen it as good as this.
The real estate market only died for about 10 days following Sept.
11. We almost went unscathed."
For September, existing home sales in the Jacksonville area
decreased by 4 percent compared with September 2000, according to
the state's Realtors association. Existing home sales rebounded the
following month with an 8 percent increase over October 2000.
Permits for new houses were up 19 percent in September compared
with sales in September 2000, according to U.S. Census Bureau
statistics.
"It shows the resiliency of the real estate market," Clark said.
"It shows that we are going to buy clothes, take our families to
Disney World and buy houses."
Last year's sales gains in the Jacksonville area rivaled or were
better than those in 1999 to 2000.
The sale of existing homes increased by 7 percent in 2000
compared with 1999, and new home sales decreased by less than 1
percent during the same period, according to the Florida Association
of Realtors and the U.S. Census Bureau.
Overcoming obstacles
On the morning of Sept. 11, Sheri Bianconi pressed her finger on
the computer's mouse to confirm the online purchase of her family's
airline tickets for their trip from Connecticut to Jacksonville to
pick out a house.
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Pete Freeman and his
dogs, Allie (left) and Chloe, enjoy their home in Julington
Creek Plantation.
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After getting a
confirmation number for the tickets, her husband, Michael, called
her by telephone.
"He said, 'turn on the television,'" Bianconi said.
As they talked by telephone, they watched as the World Trade
Center collapsed in New York City.
The Bianconis boarded an airplane a few weeks later amid the
uncertainties that existed about air travel and flew to
Jacksonville, determined to find a house and make the move from
Connecticut.
"We didn't have a choice," said Bianconi, who is now a registered
nurse at Shands Jacksonville. "It was little nerve-racking to fly,
but we did it anyway."
They wanted to change their lifestyle, which included shoveling
snow and living in a house that had a second floor. An injury made
climbing stairs in their two-story Connecticut house a nuisance for
Michael Bianconi.
They moved into an existing one-story, 2,100-square-foot house
with three bedrooms and two baths at Julington Creek Plantation.
After finding the house they wanted and returning to Connecticut,
the Bianconis drove back to St. Johns County on Oct. 29 with their
children, Ashley, 13, and Karlyn, 6, Michael Bianconi's parents, and
a dog in a packed car and van.
Michael Bianconi's parents moved into a house around the corner.
A big investment
Some homeowners, like the Keatons, are finding out that home
ownership can be a good investment.
The Keatons, who are first-time home buyers, have seen about a 6
percent increase in the value of their house, which they bought for
$120,620.
Keaton said the house recently was appraised at $127,500.
For many homeowners, a house has proven to be a way to invest for
retirement instead of investing in the stock market.
Chris and Debbie Shagnea, who live in Julington Creek Plantation,
are finding comfort in their real estate investments. They don't
invest in the stock market.
Debbie Shagnea said the value of the houses in her neighborhood
have appreciated anywhere from 3 percent to 5 percent a year. In
comparison, the Standard & Poor's 500-stock index was down 13
percent in 2001.
The Shagneas own three houses, including the one they live in, at
Julington Creek Plantation. The houses are investment properties
they rent out.
"We bought them three years ago at $130,000 and could sell them
for about $155,000," said Debbie Shagnea, who is a Realtor. "We have
been able to buy smart and stay in the house a little while and pull
out our equity to move into a larger house each time."
The Shagneas and their daughters, Kristen, 16, and Kacie, 12, now
live in a 3,200-square-foot house with four bedrooms and
three-and-a-half bathrooms on a cul-de-sac along a golf course.
In some neighborhoods, homeowners experienced anywhere from a 5
percent to 14 percent appreciation in the value of their houses,
according to the Real Estate Strategy Center of North Florida Inc.,
a Jacksonville company that keeps track of housing statistics. It is
not affiliated with the Realtor or builders associations.
For instance, in the Brierwood neighborhood in Mandarin,
homeowners with three-bedroom, two-bathroom houses saw the average
sales price increase from $112,100 in 2000 to $127,705 in 2001, a 14
percent increase. On the Northside, in the Highlands neighborhood,
homeowners with the same size house also experienced a 14 percent
increase. The average price of a house in that neighborhood
increased from $53,261 in 2000 compared with $60,592 in 2001.
Oceanfront single-family houses and condominiums, and houses on
the Intracoastal Waterway have appreciated by about 22 percent,
which is higher than most houses, said George Spohrer, owner of
Ponte Vedra Beach Realty Inc.
"With all of the instability in the stock market, more and more
people are looking to their house as a secure place to invest their
money," Spohrer said., "I know a lot of people who have gotten beat
up in the stock market and want to invest their money into the
sticks and bricks."
Hot properties
Pete Freeman moved to Julington Creek Plantation this time last
year. The reason: the variety of people.
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The Keaton family --
Marcia, with Jamal, 15 months, along with Bert and Jatarvis,
11 -- were first-time home buyers in 2001.
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"There are things
to do here besides have a nice home," said Freeman, a sales
representative who works for an international pharmaceutical
company.
Freeman often has his neighbors over for cookouts. His dogs, two
yellow Labrador retrievers, Allie and Chloe, are an attraction to
the neighborhood children.
"The kids love them, and they have a nice back yard to play in,"
said Freeman, who bought a 1,240-square-foot, three-bedroom and
two-bathroom house priced about $120,000. Julington Creek
Plantation's popularity to those looking for a new or existing house
draws on its amenities for children, including ball fields and swim
facilities.
Last year, home buyers found established areas such as Julington
Creek Plantation attractive, said Ray Rodriguez, owner of Real
Estate Strategy Center of North Florida Inc.
In order of ranking, the established areas with the largest
increase in sales in 2001 are St. Augustine, Green Cove Springs, the
Jacksonville International Airport area, the Beauclerc area in
Mandarin and the Brannan Field Road area in Clay County, according
to Rodriguez's statistics.
"This is an indication that many people are going back to the
established neighborhood to get the community feeling instead of
buying into a new neighborhood and not knowing how it will be
developed," Rodriguez said.
Interest rates
There is an obvious reason for the increase in sales of new and
existing houses.
"Let's start with interest rates," Clark said. "Lower interest
rates improve people's ability to buy a house. The biggest part of
the market has been the sales below $150,00O. It has allowed them to
reach up and buy houses and buy them in big numbers."
Interest rates on a 30-year fixed rate mortgage were at or
slightly below 7 percent, with the lowest interest rate being 6.45
percent on Nov. 8, according to Freddie Mac, which monitors interest
rates at banks across the country.
Clark said big production builders are aiming to build houses at
the lower end of the housing market, which is a challenge because of
rising land prices.
"But that is where they want to be because that is the fat part
of the market," he said.
Some experts have predicted that 2002 home sales will be flat.
They believe that home buyers who were waiting for interest rates
to go lower before they bought a house already have done so.
Clark said he has heard those predictions and disagrees.
"There is always a demand from the American public to own their
own house," he said. "You have got people whose circumstances change
every day. Someone might get a raise, a new job or come to the area
because of a job relocation, and those are things Jacksonville is
blessed with."
Business writer Earl Daniels can be reached at (904)
359-4689 or via e-mail at edaniels.
