This recently appeared in the Jacksonville Fl Times Union reported by Kevin Turner. I thought it was very interesting article and worth repeating! Here is the original link:http://jacksonville.com/business/2010-02-08/story/bill_watson_says_real_estate_recession_wont_last_forever
Who would have guessed that Marvin Gardens, Boardwalk, Park Place and Atlantic Avenue could lead to Girvin Road, Boardwalk Drive, Park Avenue and Atlantic Boulevard?
But that’s what happened for Bill Watson.
While attending Stetson University in the late 1950s, his love for the classic Parker Brothers game “Monopoly” steered him away from a career track in the insurance industry toward real estate. He returned from college, did a stint in the military, and went right back to real estate upon his return to Jacksonville.
He founded Watson Realty in December 1965, and has since grown it into the top-selling real estate company in Northeast Florida, with more than 20 percent of the market’s sales in 2009.
Watson today has 1,288 Realtors in its 39 residential sales offices in Northeast Florida and South Georgia. In 2009, the company sold 5,702 homes or condominiums in the Jacksonville metro area – up nearly 25 percent from 2008 – and 9,610 throughout its network, which stretches from St. Marys, Ga., to Orlando, Watson said.
In March 2003, Federal Reserve Board Chairman Alan Greenspan was in an audience that heard Watson give a prediction nearly unheard of in the gathering real estate industry’s boom that year: He said a recession in the industry would arrive by October 2005. His prediction was off by six months; the industry took its downward dip in Jacksonville around April 2006.
Watson speaks softly and with a relaxed pace and has more predictions to offer.
What do you see for 2010?
I think the market’s going to be flat for real estate values. Certainly through the first half. Then I think there’s going to be a little stabilization and I think a 1 percent, or 2 percent increase in values. You’re going to see when that market moves, it’s going to move pretty fast. Between now and the end of the tax credit program, this is a great time for somebody to buy. You’re going to see sales work up. And probably, right after that expires, you’re going to get a little bit of a dip, but your dip is coming at the peak of the season, so you may not get the dip. You’re going to have a lot of people come in and make a decision prior to April 30.
If you change the supply and demand, you change the value. Simple economics. We’re seeing the number of units for sale come down.
Once water seeks level, that means we have washed a lot of these things out. That’s the reason it’s going to be flat, probably, until the end of the year.
What are the key factors that will determine whether and to what degree sales volumes will increase?
Watch the retail. I think they’re going to pick up this year. I think you’re going to have a slow recovery. It’s going to be what we experienced in the ’60s. It’s a great time to buy a home, but you’re not going to see these great appreciations that you had.
Once you get into an inflationary situation, you’ve got a double-whammy. It’s going to start hurting so many other things. But the real estate values are going to show slow, steady growth. I think normal is when you get 2 percent appreciation, 3 percent appreciation in real estate, unless we get the inflation we had in 1979. I hope we don’t run into that.
What do you think is going to happen to the new home market?
My guess it’s going to be three or four years before [new home sales recover]. There are so many lots for sale.
How rapidly has the Internet changed the real estate business and what do you see on the horizon?
I think the business is constantly changing. And I think the Internet is becoming a bigger initial source for the customer to find out initial information. But I still see that you’ve got to get face-to-face with the decision-maker. Even though you can see all the information on the Internet, seeking the real thing is a lot less cookie-cutter. The Internet is going to continue to be a big part, but it’s going to continue to get more competition. There’s going to be a lot more players in the marketplace.
To what degree is availability of credit a problem in home sales?
When the banks get in trouble, what do they do? They hunker down. And the banks have hunkered down, so financing is difficult. You can get a mortgage, but you really have to have a good credit report
There are many advertising options available to businesses who wish to use the internet as their advertising medium. One of the most often used methods is PPC or Pay Per Click. PPC can be effective if used right it is not the right option for those businesses that are short on operating capital. Those companies that are short on capital will need to undertake a good
