We have often made comparisons and demonstrations showing how the Huntsville Housing Market is outperforming the national market especially in comparison with the hard hit areas of Nevada, California, and our neighboring state Florida. True our local real estate market is fundamentally sound, however it would not be a balanced statement to say, Huntsville Real Estate has not been affected by the national home market.
On the mortgage front our market has not shut down and we have even had examples in the last few months where clients have successfully obtained zero down mortgages from local financial institutions, though we have also had relocating clients, due to tougher approval standards, having to sell or lease there existing property before being able to qualify for closing on their new Huntsville Home.
A recent Huntsville Times article entitled, Banks Feeling the Pinch of Shaky Real Estate Market had this to say:
Alabama’s largest banks, including Regions, Compass, Colonial and RBC, have seen their share prices battered by a growing number of nonperforming real estate loans and general Wall Street unease about the banking sector. The Alabama banks’ problems are bound up with the troubled housing market nationwide, several experts said.
Generally, Alabama is probably not seeing the magnitude of problems we’re seeing in Atlanta or Florida or other parts of country, but the regional banks operating in those markets face a difficult environment,. In certain parts of the country, it seemed as though housing stopped overnight, said Evans Quinlivan, Northeast Alabama market executive with RBC
The secondary market (the market that buys loans from banks and re-sales them to investors), bruised by its purchase of a lot of now-defaulting mortgages, is pressuring banks to charge higher interest rates for jumbo loans over $417,000. …Quinlivan said the market is asking borrowers to pay markedly higher rates, making for a tougher sell. “Two years ago, the pricing difference might have been an eighth of a point or a quarter or three-eighths. Now it’s 2 or 3 percent,” he said. “It’s a tough market.”
A previous Huntsville Times article also related our own experience with some clients:
Depressed sales in Virginia are impacting our area, said Joe Murphy, whose MarketGraphics Inc. tracks the local housing market.
We would be in boom times right now if the northern Virginia market would recover, Murphy said. Right around the time BRAC was announced, we were hearing stories of people putting their houses on the market and the houses being bid up above asking price. Now, people that are supposed to be moving here can’t sell their houses.
So in truth while the Huntsville Real Estate market is fairing better than the tougher hit areas of the country, it is definitely being affected by national conditions. The National Association of Realtor’s 2008 national market outlook is forecasting sales and prices to stabilize throughout the 2nd half of 2008, while other economists are indicating the 2nd half of 2009.
Over the last year we have experienced a rise in inventory, a decline in sales, and a flattening of price appreciation but over the last 4-5 months we have seen all these metrics stabilize. We feel our own clients are not the only ones temporarily on hold and that our market, in general, has a large pent-up demand. When the national markets stabilize and start to turn around our local market is likely to be one of the markets leading the way up.
One thing is for sure, it is much more important than ever to get Pre-Qualified for a mortgage to asses your current credit status prior to shopping for a home. Nothing is more disappointing than to find a dream neighborhood and home and then to find out your plans must wait. If you would like to get pre-qualified please simply drop me an email or give me a call at 256-425-1659, and I will be happy to get the process started.