Cover story: Real estate market stabilizes
By DAVID TISDALE
The storm clouds representing war in the Mideast and tax season that rained on commercial and residential real estate investment have passed, according to South Mississippi Realtors and public officials.
Individual investors and businesses, already jittery from a stagnant state and local economy, sat on their hands early this year, taking a wait-and-see look at the results of the war in Iraq and later taking a breather to recover from tax season.
"Construction literally stopped in its tracks," said Alana Abney, Lamar County Planner. "No construction started up during the war." That's changing now, in Abney believes. "The local economy has picked up, with construction of homes and businesses moving forward."
A variety of industries give Lamar County more than one economic leg to stand on, and commercial development influenced by these factors are back on track, she said.
With the University of Southern Mississippi close by, a growing Wesley Medical Center and what seems an endless surge of commercial retail development on U.S. 98 in west Hattiesburg (the city extends westward into a portion of Lamar
County) the area can sustain itself on a variety of business interests. The area will have a new Walgreens Drug Store later this summer, and two smaller shopping centers are under construction, including one next to Turtle Creek Mall that will be known as Turtle Bend.
"Our strength (in the Hattiesburg-Lamar County area) has been a diverse economy," she said, noting the educational, medical and commercial retail industries that inhabit the area. If one area of the economy is stalled, others can help pick up the slack, she said.
Hattiesburg realtor Steve Floyd, president of Steve Floyd and managing agent for Cloverleaf Shopping Center (formerly Cloverleaf Mall) in Hattiesburg, is a commercial and real estate developer. He said he noticed a dip in development in the Hattiesburg area last fall, and continued retreats with the conflict in Iraq.
"Maybe people were holding back because of the war," he said, but he described recent weeks as being "tremendous" in terms of development. Like Abney, Floyd recognizes the diversity of the area economy as safety nets for the Pine Belt, and cited the development of medical offices on property across U.S. 49 from the Cloverleaf Center.
"People will continue to get sick whether the economy is bad or not," he said of the area medical industry's strength.
The new offices being developed, which are extensions of Forrest General Hospital and Hattiesburg Clinic, include a dialysis center and an after hours care center, among other medical services. The facilities are on property previously occupied by a Sack and Save grocery and next to one of Hattiesburg's two Wal-Mart Supercenters.
Floyd added that a contract had been signed for property adjacent to the medical offices that will include the demolition of an old Wendy's restaurant building.
Increased occupancy at Cloverleaf Center, Floyd said, is another sign that investment in Hattiesburg is on the rebound. A new tenant, which Floyd could not name for confidentiality reasons, has signed on to move into available space at Cloverleaf in October. Floyd said this new occupant would bring the retail side of the center to 100 percent occupancy. The center is half retail and half office space, which is currently at 88 percent occupancy. Just as realtors emphasize location with zeal, Floyd also stresses that low interest rates are critical to keeping the resurgence of property development and home purchases in the area going.
"Residential real estate is still moving well with low interest rates," he said. "Keeping them down will allow investors to continue to develop and individuals to buy homes."
Reese Roberts, a commercial realtor with Coldwell Banker Alfonso Realty in Biloxi, agrees with Floyd.
"Both (residential and commercial markets) are very healthy right now," said.
"The 2003 markets started off slow in the first three months, but they've both been active the last two months."
Roberts also concurs that war and tax season worries were definite factors in development early this year. "With the end of the war, and having tax season behind us and with summer before us - these are consumer confidence issues." Consumers on the coast also point to low interest rates as reason to invest again, he said. "That is going to drive consumer confidence," he said. Roberts said it's obvious that individuals on the coast are optimistic enough about the economy, or they wouldn't be purchasing some of the new homes and condominiums being built. He noted the development of the Legacy Condominium project in Gulfport and Destiny Plantation subdivision in north Biloxi, with its high-end homes with lots ranging in cost from $100-300,000 as examples that families are confident about the future.
"Low interest rates have people interested in these places," he said.
Abney said low interest rates will also keep Lamar County investment going." As long as interest rates stay low, people will continue to invest," Abney said. "Gas prices are also a factor," she said of investor's ability to gauge the health of the local economy. "We have a lot of recreational opportunities within a day's drive of our area. With lower gas prices, people are prone to take trips more frequently."
Wiggins mayor Ferris O'Neal saw little slowing of the economy in his city and Stone County. Commercial and residential development, especially on land near the Wal-Mart Supercenter continued despite the war in Iraq and other economic concerns.
"It seems like every day someone's opening a new business or inquiring about opening one," he said.
O'Neal also attributes the continued growth in his city to low interest rates, but noted the influence of the development on the coast as a factor. In his opinion, there's very little not to like when considering to invest anywhere in south Mississippi.
"We've got good weather, an excellent work force available to businesses and South Mississippi is a good crossroads to other areas. It makes us a great place to live and work."