Mark Dilworth, Managing Partner & Co-Owner, Keller Williams Realty Atlantic Partners

Invest: sat down with managing partner and owner of Keller Williams Realty Atlantic Partners, Mark Dilworth, to discuss the key milestones, challenges, and trends in the residential real estate market over the past year, highlighting changes in business practices, the impact of interest rates, and growth opportunities in Jacksonville and Northeast Florida.

In terms of the past year, what have been some of the key highlights and milestones for Keller Williams?

Keller Williams is one of the largest companies in the world when it comes to residential real estate. My role, though, is not involved in the day-to-day listing or selling of homes. I manage three offices here in Northeast Florida. I want to give you a different answer than what you might expect and probably different from what you’d hear from others in the real estate industry. 

On August 17th, the way we do business in residential real estate changed significantly because of class action lawsuits. As of that date, the entire process for real estate agents across the country was impacted, requiring additional training, new forms, and several other changes. When I think about the biggest highlight over the past year, it’s not specific to Jacksonville or even my role—it’s about how we’ve had to adapt and educate our agents. Our focus has been on ensuring they do the right thing for themselves, their clients, and the brokerage. That’s been the most significant change we’ve experienced this year.

Could you give us an overview of the current residential real estate market in Jacksonville and Northeast Florida?

One major development is that the Federal Reserve just cut interest rates by half a point. While nobody has a crystal ball, I’d expect that, over time, this will affect mortgage rates, possibly bringing them down. Currently, we’re seeing 30-year fixed mortgage rates in the 6.2% to 6.3% range, and I’d love to see them drop into the high 5s. 

The real estate market has been challenging. If you look at year-over-year numbers as of August 2024, closed sales are down about 6.5% in the counties I cover: Nassau, Duval, and St. Johns. But interestingly, while the number of closed units is down, prices have actually increased by 2%. From an economic perspective, that runs counter to traditional supply and demand dynamics, but it’s a notable trend.

I’m convinced that once mortgage rates hit a certain threshold, perhaps in the 5.75% range, the market will take off again. There’s so much pent-up demand right now. It’s like a volcano building pressure beneath the surface, and when rates fall into that sweet spot, things will erupt.

The market really started to slow in the second half of 2022 as interest rates rose post-COVID. For consumers, it’s a tough spot. Do you buy a home now, even at 7% interest, or do you wait and risk higher home prices if rates drop? It’s still a difficult decision for many buyers.

Are there other significant issues in the industry right now?

Another major issue is affordable housing, which has been a concern for a while. My kids are in college, and I wonder when they’ll be able to afford their first home; probably not until their mid-30s. Affordable housing is a tough dilemma. Unless there are government grants or landowners decide to sell land at reduced prices, which is rare, it’s hard to see how it will be resolved.

Our responsibility at Keller Williams is to ensure that we’re providing excellent training and education for our agents. We can’t control the economy or the price of homes, but we can control how well-prepared our agents are to navigate the market and provide the best service to their clients. We’ve done an excellent job of that, offering education not only to our agents but also welcoming agents from other companies to participate.

Are there any other growth opportunities in the sector right now that Keller Williams can take advantage of?

There’s a longstanding connection between residential and commercial real estate. If more people start buying homes, it will likely boost the commercial side of things as well. This is why I’m particularly bullish on Jacksonville. From Maine to Miami, how many East Coast cities can claim to have abundant land for industrial growth, access to major highways like I-95 and I-10, an international port and airport, a pro-business government, and amenities like the TPC, ATP, and an NFL team? Jacksonville has all of that, and it’s a bit of a secret. I’m optimistic about the city’s growth potential.

What differentiates Keller Williams from other real estate companies in Jacksonville and Northeast Florida?

There are many strong real estate companies in Jacksonville, and I know many of their owners. However, what sets Keller Williams apart is that we focus on teaching agents how to run a real estate business, not just how to sell homes. We provide training on budgeting models, lead generation, and economic models, and once an agent reaches a certain level, we teach them how to run an organization within our organization. Being an agent is just one part of what we do; we focus on helping our agents build a real estate business, and that’s where we excel.

In a recent interview, Engel & V¶lkers mentioned that the luxury market in Northeast Florida is performing quite well, even as the broader market slows. Could this be because pricing at the higher end is better adjusted compared to the lower end?

That could be part of it, yes. Another factor is that buyers in the luxury market, especially those purchasing homes worth $1 million or more, often buy with cash, so they’re less affected by interest rates. In that sense, the luxury market isn’t as sensitive to fluctuations in mortgage rates as the broader market.

How do you advise your clients when searching for a home in Northeast Florida?

It depends on a few factors. If you called me today wanting to buy a home in Jacksonville, I’d ask about your timing, budget, requirements such as school zones or proximity to the beach, and whether you’re a first-time buyer or need to sell another home first. I want to gather as much information as possible to help you find the right home without wasting your time.

A buyer’s consultation is essential. Not only does it ensure I understand your needs, but it’s also a safety measure. I want to make sure I’m meeting with serious buyers in a safe and professional environment. 

What are Keller Williams’ main priorities for the next two to three years?

Growth in terms of attracting talented agents and expanding into new markets. If you’re not growing, you’re at risk of stagnating, or worse, coasting downhill. Our focus will be on growth, both within our current offices and through new opportunities.