I have been asked time and again over the last few weeks for my evaluation of the Columbia, Missouri housing market. So, in light of recent weeks events both locally and nationally, I have decided to express my view on the LOCAL market situation.
First, after speaking with numerous Realtors from various agencies, I have determined that this is perhaps the worst housing slump Columbia has experienced in the last 10 years. Why? Initial indications show that Columbia has not grown at the pace previously indicated by city officials, therefore all of the housing build-up (i.e. developments, new construction, condos etc.) have simply been over kill. We have an abundance of inventory especially on homes in excess of $250,000. Both buyers and sellers have been accustomed to a significant percentage of appreciation over the past few years and that has slowed and to some extent even reversed as builders and sellers are slashing prices to unload inventory. Current buyers have homes to sell before they can begin to purchase and the buyers who do not, have a plethora of homes to choose from. What we have in Columbia is a stagnant housing bubble!
Second, to add to the problem rates were trending upward, housing slowed and mortgage delinquency soared. The next thing you know 128 lenders have closed their doors and many others have a severe strain on liquidity and capital. Even the nations largest lender (Countrywide) has experienced the stresses from the current state of the mortgage market. Why? Because in the past the sub-prime / secondary market was hungry for loans and profit. It seemed they would allow loans to be made to anyone with a heartbeat (580 100% financing, Stated Income Stated Asset, No Doc 100%, Seller Carry backs etc.) and they are surprised when delinquencies rise? The secondary market rode a wave for several years and now is experiencing the wake of that wave crashing. Yes, some of this burden does lie with the lenders/brokers and yes this industry has been hit hard recently but Professional Mortgage Group is here to do business the "right way".
What will it take for this housing trend to be reversed? Well we are seeing it, new construction permits are down (10 year low), listing inventory has been slowly decreasing, the feds have realized the problem is not just going to go away and have lowered the discount rate .50% . Hopefully in September they will reduce the key federal funds rate by at least .50%. If listing inventory goes down, if rates go down, the mortgage market stabilizes, and the non-ethical lenders close their doors; a housing rise will, hopefully, be triggered by the end of 2008. Yes, I think it will take that long to reverse the Columbia, Missouri market. Perhaps builders, lenders, agents and city officials have learned something from this halt. The good companies in any profession will be here to reap the rewards!
Professional Mortgage Group of Columbia, Missouri is dedicated to timely service, ethical and honest mortgage advice, superior communication and a knowledgeable staff. We WILL weather the storm and be here to serve you in the future.
Your comments are welcomed
Brought to you by Professional Mortgage Group, your Columbia, Missouri Mortgage Broker!
First, after speaking with numerous Realtors from various agencies, I have determined that this is perhaps the worst housing slump Columbia has experienced in the last 10 years. Why? Initial indications show that Columbia has not grown at the pace previously indicated by city officials, therefore all of the housing build-up (i.e. developments, new construction, condos etc.) have simply been over kill. We have an abundance of inventory especially on homes in excess of $250,000. Both buyers and sellers have been accustomed to a significant percentage of appreciation over the past few years and that has slowed and to some extent even reversed as builders and sellers are slashing prices to unload inventory. Current buyers have homes to sell before they can begin to purchase and the buyers who do not, have a plethora of homes to choose from. What we have in Columbia is a stagnant housing bubble!
Second, to add to the problem rates were trending upward, housing slowed and mortgage delinquency soared. The next thing you know 128 lenders have closed their doors and many others have a severe strain on liquidity and capital. Even the nations largest lender (Countrywide) has experienced the stresses from the current state of the mortgage market. Why? Because in the past the sub-prime / secondary market was hungry for loans and profit. It seemed they would allow loans to be made to anyone with a heartbeat (580 100% financing, Stated Income Stated Asset, No Doc 100%, Seller Carry backs etc.) and they are surprised when delinquencies rise? The secondary market rode a wave for several years and now is experiencing the wake of that wave crashing. Yes, some of this burden does lie with the lenders/brokers and yes this industry has been hit hard recently but Professional Mortgage Group is here to do business the "right way".
What will it take for this housing trend to be reversed? Well we are seeing it, new construction permits are down (10 year low), listing inventory has been slowly decreasing, the feds have realized the problem is not just going to go away and have lowered the discount rate .50% . Hopefully in September they will reduce the key federal funds rate by at least .50%. If listing inventory goes down, if rates go down, the mortgage market stabilizes, and the non-ethical lenders close their doors; a housing rise will, hopefully, be triggered by the end of 2008. Yes, I think it will take that long to reverse the Columbia, Missouri market. Perhaps builders, lenders, agents and city officials have learned something from this halt. The good companies in any profession will be here to reap the rewards!
Professional Mortgage Group of Columbia, Missouri is dedicated to timely service, ethical and honest mortgage advice, superior communication and a knowledgeable staff. We WILL weather the storm and be here to serve you in the future.
Your comments are welcomed
Brought to you by Professional Mortgage Group, your Columbia, Missouri Mortgage Broker!
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