Transcript: Time to Buy in Sunshine State?

This is a partial transcript from "Your World with Neil Cavuto," October 25, 2005, that was edited for clarity.


GOV. JEB BUSH, R-FLA.: It's possible to say that tomorrow is going to be better than today, and, a week from now, the recovery will be full-blown.


NEIL CAVUTO, HOST: Don't let severe hurricanes stomp on Governor Jeb Bush's parade. According to The Wall Street Journal, all eyes are on the Florida Panhandle (search) region as still a very hot real estate market, good news for my next guest, who runs Florida's largest private landowner.

In Jacksonville is Peter Rummell. Peter is the chairman and the CEO of St. Joe Company (JOE) — the third-quarter profit there rising 37 percent.

You know, Peter, every time I have you on, I always remember the paper days, but you are way beyond that now.


CAVUTO: It's all land, isn't it?

PETER RUMMELL, CHAIRMAN & CEO, THE ST. JOE COMPANY: It's a great thing to be beyond.

CAVUTO: Yes. I guess so. What's interesting, in light of the hurricanes, you would think that interest in Florida real estate of all sort — land included — would have died — but quite the opposite. What's going on?

RUMMELL: You know, Neil, there's an irony to it that really is interesting.

Our stock is at the lowest it's been at in some time. And, yet, the prospects have just never been better. We have just finished our sort of second generation of resort towns and have more good things in the pipeline than we have ever had.

So, we have decades and decades of land. And we think we're well positioned and excited about the future.

CAVUTO: You know, but I always look in your stock the same way I look at housing stocks in general. They tend to dovetail each other fairly nicely.

And last summer was what seemed like the height. And then it was, "Katy, bar the door!" They all fell out of bed, maybe previewing a housing slump? What do you think?

RUMMELL: I don't think so.

I don't buy the theory that there's a national housing bubble. I think there are some hot spots, like Miami Beach and Las Vegas and that kind of thing. But, you know, the fact is, if you just take the census data, over the next 20 years, the state of Pennsylvania is moving to Florida.

That's an enormous demographic that is much more powerful than interest rates or anything else. There are 1,200 people that came across yesterday. There are another 1,200 that are going to move into Florida today. It is just an enormous demographic event. And we think that's powerful.

CAVUTO: So, you don't buy the notion, Peter, that Florida was priced for that, priced for all these people moving in, priced for this this booming growth, and then some?

RUMMELL: Look, I will be the first to say that there are short-term swings and there are ups and downs.

And I think the combination of some very aggressive pricing over the last couple of years and the hurricanes that we had this summer — remember, we had a thing called Dennis that happened before Katrina that you all didn't focus on, that actually did more damage to us than Katrina did.

CAVUTO: That's a good point. Yes.

RUMMELL: And, so, we have had a summer that's been very poor, from a resort point of view, and that's what drives a lot of our business. So, there is some short-term movement, but I think it is short term against a terrific long-term trend.

CAVUTO: Obviously, Ben Bernanke (search) coming into the Federal Reserve — assuming he is confirmed, which it looks like he will be — he seems to be less not vigilant on inflation, Peter, but maybe not quite the nut Greenspan is on this issue.

Do you agree with that? And would you welcome a change in Fed policy that is not so, keep hiking the rates, keep hiking the rates?

RUMMELL: You know, as an owner of a large amount of hard assets, we always are schizophrenic about inflation.

When you own hard assets, inflation can be a friend to some degree. On the other hand, if interest rates go up, it probably means because the business environment is getting healthier. So, I mean, it's a kind of a mixed bag. But he seems to me to be somebody who is at least, to some degree, in the Greenspan mold, and we're comfortable with that.

CAVUTO: All right.

Finally, on all the hurricanes that Florida has experienced, I think eight over the last 15, 16 months, you have not seen even one iota, one scintilla of evidence that people are saying, at least with the coastal regions, where I know you are not as big as you are in parts of interior Florida, that they're saying, no mas?

RUMMELL: I think they say no mas that week. But they get back to Buffalo and remember how cold it is in January.


RUMMELL: And, all the sudden, Florida looks very attractive.

CAVUTO: All right. Peter, always good seeing you. Thank you very much.

RUMMELL: Thank you.

CAVUTO: Peter Rummell, he's the man that runs the St. Joe Company. Again, you knew it largely for paper, remember, a few years ago. But now, of course, it's virtually all real estate. And they own it seems like the whole state of Florida.

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