Interest rates help local real estate market

When our nation’s economy stumbled, no segment was hit harder than the real estate market.

When millions of gallons of oil dumped into the Gulf of Mexico, things looked even bleaker on the local level.

Despite the challenges that the real estate market has faced in the past half-decade, local realtors tout that the market is stabilizing and things are looking up for the future.

With banks setting interest rates at all-time lows and local unemployment staying relatively low, many people are attempting to buy our area’s available homes.

“The market, in my opinion, has been steady for the past 12 months,” First Choice Mortgage Owner Verna Thomas said. “Despite the oil spill, buying activity has been brisk.”

“In my opinion, real estate locally is doing very well,” South Coast Real Estate Owner Travis Griffin agreed. “And it seems as though this trend will continue throughout the remainder of the year, as summer quickly approaches and buyer confidence is up.”

Probably the biggest reason why home sales are up has to do with banking – the interest level on home loans are at all-time lows.

Griffin has been in real estate since 2007 and he said he’s never seen rates as low as the current 3-4 percent interest rates buyers are able to gather.

Thomas, who has more than 20 years of experience in her craft, agreed and said the current low rates are creating some advantages for current and future buyers.

“Interest rates are some of the lowest I have seen,” she said.

But even with low rates and people at work making money, some challenges still are out there for future buyers.

Both Griffin and Thomas said banks have become more selective in terms of who they give financing to in the current market.

This process is a direct response to the nation’s housing crisis, where millions of Americans were given loans to purchase homes that later were foreclosed when the buyer couldn’t pay the mortgage note.

“Having been initially licensed in 2007, as a Realtor sales associate, I found that there were a good bit of buyers and most of them were able to secure financing [then] without any major issues,” Griffin said. “In 2008-09, as a direct result of the credit crisis and predatory and frivolous lending, we have begun to see lenders cracking down on financing requirements. Before, a buyer could secure a loan without any problems. Since, many buyers with stable credit history and income are now in some instances overly scrutinized and, at times, denied for financing.”

Thomas agreed with Griffin’s sentiments and detailed how the process of home buying has changed in her 25-plus years in the profession.

“When I first began in the mortgage business in the middle 1980’s, interest rates were in the double digits,” Thomas said. “Mortgage money was plentiful and buyers had an easier time getting qualified. Mortgage guidelines became less and less restrictive until almost any applicant could buy a home. Once the foreclosure rates began to climb, mortgage requirements began to return to where they were many years ago, buyers were less-qualified and not all applicants were approvable.

“Mortgages are more difficult to obtain now than at any other time during my career, but there are still many good programs for potential buyers.”

One of the programs Thomas was likely talking about are no money down programs through USDA Rural Development, as well as local grant programs for eligible buyers.

Those things, combined with work returning to normal has virtually everyone optimistic that yesterday’s economic rain storm will be followed by tomorrow’s real estate and banking rainbow.

Griffin said he encourages buyers to take advantage of today’s low interest rates and home availabilities.

“It is important for serious buyers who have been contemplating making a move to do so now, again with the consideration of low interest rates and selection of inventory,” Griffin said. “Because the fact of the matter is that while we can continue to monitor trends and happenings both locally and nationally and internationally, we can never be sure of what tomorrow holds.”

Thomas believes people will listen to Griffin’s sentiments. She forecasts a solid 12 months.

“If the level of activity continues as it has, the remainder of 2012 and 2013 should be good,” she said.