The cause and the Eli Effect: Oxford’s big boom explained
The Eli Effect is a real thing in our city’s growth and real estate history, according to many residents and Ole Miss alumni who own second homes in Oxford.
The term comes up surprisingly often in conversations, referring to Oxford’s first boom period that began in 2002 and 2003 and was full steam by 2004 and 2005.
And they swear it was real.
It’s the very reason, they say, that a dilapidated house near the Square sells for $1 million when it would otherwise sell for $350,000. It’s the very reason every spare piece of dirt around here has a bevy of suitors willing to pay most any price if they can build upon it.
“I didn’t think (Oxford real estate prices) could go any higher than the Eli Effect,” one resident told me recently, referring to the legend as fact. “But (prices today) beat that.”
Or: “The Eli Effect got it started, but (Oxford development and prices) have a long way to go from here.”
Eli, of course, is former Ole Miss quarterback Eli Manning, who now stars for the NFL’s New York Giants. The widely held explanation of The Eli Effect goes something like this: Oxford had awakened in the 1990s behind tourism growth, arts and culture scene expansion, and the beginning of second home owners coming to town, but property demand and development progressed at a moderate pace.
Then the baby son of famed Rebel quarterback Archie Manning and Olivia Manning, arrived in town in 2000 as a highly praised freshman quarterback for Ole Miss. Enrollment at the Ole Miss Oxford campus was just 11,405 the year Eli Manning donned #10, and houses around the city’s beloved town Square routinely sold for $350,000 or less, with only prominent, restored homes on North and South Lamar selling for much more than $1 million.
So lore has it that Eli’s prowess on-field prowess, which ultimately led Ole Miss to the 2003 Cotton Bowl, created so much excitement that more people wanted to pour in here in and did, creating a boom-town out of our tiny North Mississippi mecca.
But while The Eli Effect makes for a good storyline one must admit that a confluence of other factors beyond the popular Ole Miss quarterback came together at once, creating a vortex of energy that swept Oxford up into its first dizzying development and home buying spell.
*Factor #1: The U.S. Federal reserve lowered dropped its funds lending rate 11 times, taking it from 6.5 percent to 1.75 percent in 2001, making in-house bank money cheap lending to both developers and borrowers.
*Factor #2: The National mortgage denial rate dropped to 14 percent for home purchase loans in 202-2003, half of the rate for 1997.
*Factor #3: Annual home value growth was double-digits nationally in 2002-2003 so Oxford’s boom fit into a larger trend.
*Factor #4: Banks regionally and nationally relaxed lending standards, and developers often needed little more than a signature for a big loan.
*Factor #5: A couple of devastating hurricanes along the Gulf coast, from New Orleans to the Florida panhandle, made second homes away from the beach more appealing to many.
*Factor #6: Ole Miss was a great education at a very affordable price with attainable admission standards so its appeal was high, especially for out-of-state students.
*Factor #7: The Ole Miss baseball team won 39 games in 2003 and 48 games in 2004 and crowds swelled in size to an average of more than 4,000 per game at Swayze Field, making Oxford and Ole Miss a year-round sports destination for fans and visitors, and more appealing for second-home owners.
*Factor #8: Oxford was low-hanging fruit, naturally attractive to real estate development, since it was never more than a sleepy town without any significant major development beyond the adjoining university.
It’s not like Oxford was the only place experiencing a real estate boom that started about the time, either. Areas from Gulf Shores, Alabama to Oxford to Nashville to Asheville, North Carolina and places far out west had the very same thing happen, at the very same time.
And if The Eli Effect gets full credit for Oxford’s initial development boom, then former Ole Miss coach Ed Orgeron, who ran the Rebel program into the ground at the same time the national housing bubble and economy burst, halting our city’s initial boom in its tracks, should get full blame for it ending.
That would be the O The Coach Effect.
Now Oxford is in the midst of a boom that’s 10 times bigger than what began in 2002 and the Ole Miss football prospects aren’t very good at the moment, even if the Rebels do have a sterling young quarterback. Simply, the factors driving the boom are much bigger than football, no matter what we want to think.
Oxford’s current big boom is happening because Ole Miss enrollment has grown more than 40 percent over the past decade, with more than 20,000 on the Oxford campus alone. It’s happening because interest rates also remain historically low at a time when many have emerged from the 2008 national financial crisis and housing bust with more wealth than they could have imagined.
Oxford, with its quaint Square, and Ole Miss with its events and people, make this a prime spot for investment of money and time. That’s undoubtedly why Eli Manning himself has a 7,000 square foot second home here.
But it’s not as good of a story as assigning the city’s first boom to the former Rebel quarterback. So in Oxford, we stick to the legend that started on the football field, the one that says the beginning of our city’s boom is owed to a favorite son, now also a favorite neighbor living in a house with too high of a high valuation.
It was The Eli Effect, how all this development and real estate madness began in our city.
David Magee is Publisher of The Oxford Eagle. He can be reached at email@example.com.