Keith Odom, Compass Bank vice president for commercial banking in Temple, hasn’t seen any downturn locally.
“It’s just not a one-size-fits-all situation. Bell County has just not been affected like some other markets,” Odom said in response to questions about the fallout locally from the highly publicized housing market problems around the country.
“2007 has been one of the bank’s most solid (years),” Odom said. “And our residential mortgage loan business has been very strong. I think we’re more insulated, from a banking standpoint.”
Randy Ramsey, regional president for Extraco Banks, provided a similar assessment of current market conditions.
“The local real estate market is as good as it has been in a long time. In this area, the average homebuyer with good credit can get a loan all day long. People think real estate is in the tank. It is not,” Ramsey said.
The 12.6-percent drop locally in new home construction permit activity between January and August compared to a 28-percent drop across the state came primarily, according to Ramsey, from the exit of home builders who had focused on entry-level homebuyer from the local market. Entry-level home buyers are often subprime mortgage candidates.
“These (subprime) loans should not have been made in the first place,” Ramsey said.
Pepper Creek Realtor Katrina Berndt estimated local resale activity dropped by about 7 percent this year compared to a 2.5-percent drop across the state and suggested several factors had caused the drop.
“First we had unexpected weather that affected everyone. Prospective buyers didn’t enjoy previewing homes in the rain,” Berndt said.
“If the weather wasn’t bad enough the federal government was worse. They put handcuffs on the lending institutions forcing stricter loan requirements. Buyers weren’t being qualified for home loans. And to top it off, we have less disposable income because of things like higher gas prices. All these issues developed during the heart of our spring home buying season and causing our real estate market to slow,” she said.
Alan Stephenson, general manager for Larry Lilly Builders Inc., acknowledged the slowdown in the local housing market but said he expected his company to sell more homes in 2007 than in 2006 but at a slower rate.
Stephenson thought continued negative media coverage of national housing trends and instability in mortgage markets had probably kept some homebuyers on the sidelines.
“But when the Fed (Federal Reserve Board) dropped interest rates three-quarters of a percent during the last 45 days, I noticed a significant ‘bounce’ in the number of inquiries we’re getting,” Stephenson said.
“And I think the Fed will continue to get into this and force rates to move the needle back in a positive direction for the housing market,” Stephenson said.
sshaffer@temple-telegram.com
