Despite plenty of questions about the economy around the country, positivity remains around the housing market in Niceville and Valparaiso. Movement Mortgage Branch Leader Steve Schutt says that the prime rate nationally for home loans varies based on whether or not you’re in line for a government loan (think VA, FHA and USDA) or a conventional loan. “Government loans are in the high 6 [percent interest rate]’s to low 7s,” Schutt said, “Most conventional customers will be in the low 7s.”
The Emerald Coast Association of Realtors (ECAR) Secretary, Amanda Grandy presented a cloudy, though not an entirely stormy picture of the near term for Okaloosa County’s real estate market to the Board of County Commissioners on Tuesday. Her biggest takeaways:
“What the fed is saying is that they are going to increase the interest rate through February and then sit on it for 12 months to make everything kind of stall,” Grandy told commissioners, “It’s going to be a correction and a stall for a while until we get confidence [in the market] back. It’s going to be a little bit broken because the interest rates are at 7%.”
Commissioner Trey Goodwin asked Grandy what size correction the county could expect on home values. She told them about a 20% drop – back to the levels they were immediately before the COVID-19 pandemic.
Alan Wood has seen a couple of ups and downs in his 35-year career as a banker, first in Alabama and now as the president of CCB Bank in Florida. The bank makes home loans in Alabama and Florida. In addition to their business in the home loan market – CCB Bank manages an investment portfolio as well. They have more than 70 years experience in the banking industry.
We asked Wood several questions about the future of our real estate market in Niceville, Valparaiso and around Eglin Air Force Base. Here’s what he told us:
“Not dramatically. I’ll put it this way; I would say that we’ve seen a slowdown in residential loan applications primarily. And on the business side, there’s not going to be the refinance opportunities that we’ve been experiencing over the last five to seven years. Going forward, mortgages are going to be people moving here primarily. Not a lot of people are going to be selling and getting into a bigger house right now because of the interest rates,” Alan added, “Still, a decent amount of new build inventory is out there. That is going to be hitting the market. And I think [new home purchases are] where you are going to be seeing most of the activity over the next year, in my opinion.”
“I don’t think so. To be quite honest, we’re insulated in this market to a large degree because of the military. there’s always a consistent stream of people moving in and out of our area via re-locations in the military and a consistent flow of federal monies via government contracts. This helps insulate our area from downturns in the economy. That will keep the economy here pretty robust. Having been in another market, Tuscaloosa, where we had the University of Alabama – when you’ve got big engines like that in your market, it helps to insulate you to a large degree from recessions.”
“I would probably say they are going to be flat,” Wood said, “Right now, there is nothing driving the markets down. We have lower unemployment, there are still 1.7 jobs for every job seeker on the market. Not a lot of people are losing their jobs. I think the housing market is going to stay decent, and values won’t drop that much, in my opinion. Foreclosures aren’t happening in this market like they were in 2011 and 2012. If they were, all of these existing home values would come down.”
“The deposit rates are increasing. If you are a depositor, we’re already seeing that over the last 2,3,4,5 years, rates have been so depressed on CDs [Certificates of Deposit] and money market accounts you rarely had people calling to see what our rates were. Now, we are getting a lot of calls.”
To sum up, Wood thinks our area will serve as a safe harbor for peoples’ investments in their homes for the future – thanks to the stability that the Air Forces’ missions bring to the area. He did add other areas outside of the direct influence of Eglin’s gates – places like Destin and South Walton – would have less resistance to the national economic situation than Niceville, Fort Walton Beach and Crestview.