It seems lately, I regularly view or hear some negative report connected to the mortgage industry, and sometimes, home sales. There is a gloomy cloud hanging over this industry. But the truth of the matter is things just aren’t that bad in Knox County and the surrounding area housing market.
I watch television every morning when I am getting ready for work and without fail, I regularly view some negative report connected to the mortgage industry, and sometimes, home sales. I see the same thing in the newspaper, magazines, on the web, etc. You get the picture. There is a gloomy cloud hanging over this industry. But the truth of the matter is things just aren’t that bad in our neighborhoods.
If you check the statistics listed at Knoxville Area Association of Realtors (KAAR) website, people are still buying homes, selling homes and obtaining mortgage financing. In July of last year, there were 1644 homes financed. This year July saw 1547 homes financed. Not off by much. Also, the average time on the market for a newly listed home only went up from 79 days to 88. Just 9 days longer to sell your home on average. Not that big of deal. And most positive, the average price (in the thousands) of a home increased from last year from $227.8 to $236.4. According to the Office of Federal Housing Enterprise Oversight (OFHEO), 131 of 287 metro cities recorded decreased housing prices. The Knoxville metro area showed a 2nd quarter increase 2.29% and yearly increase of 7.85%.
I think numbers will be a little bit worse in the third quarter, but not compared to the national scene. Even with the barrage of negative reporting we swallow, this area of East Tennessee seems to be moving right along. The same is true for our neighbors in Asheville and Charlotte. The same cannot be said for California, Florida and Nevada.
In my opinion, the constant national media coverage of areas where markets have gone sour weighs on the minds of your average local homeowner/homebuyer and accounts somewhat for the decline in the market, however slight it may be. But, the average East Tennessean didn’t finance their current home with a 1 month pay option Adjustable Rate Mortgage (ARM) with 100% financing (that’s a loan which the interest rate can adjust after one month – slightly risky). Most likely your neighbor obtained a 30 year mortgage and proved their income. They are not in foreclosure right now. And if you are local and did get an Adjustable Rate Mortgage, chances are you have equity in the house and can easily refinance with no closing costs and obtain a reasonable fixed rate.
Subprime lending is affecting the current market, and yes, this area did have its share of subprime loans that are now in default. The newly tightened lending guidelines will all but right these wrongs to a large degree. And I should say that I don’t think that these guidelines are such a bad idea. Why not insist established homeowners put a little money down on a new home purchase and provide a decent credit history, lending credence to the promise of repaying the largest debt they incur?
Oh, and of note to first time buyers - you still have access to great rates and 100% financing. You just have to come up with the documentation to prove to a lender that you’re worth the risk. And for most of you, that’s just not going to be a problem.
Because you can, visit: Home loan Knoxville TN
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