Down Payment Assistance - Is it really over?
August 19th, 2008 - Categories: Buying a home in the Dothan area
By: Charles Woodall
Managing Broker
http://www.dothanhomesearch.com
Down payment assistance programs are winding down. Beginning October 1, pretty much every homebuyer will need at least 3.5% as a down payment if they want to buy a home. As discussed a couple of weeks ago, the end of these programs will mean about 10% fewer buyers looking for homes here around Dothan. It also means what is already a tough market for sellers is going to get even tougher. There is really no other conclusion one can draw but to say that elimination of DPA programs is going to adversely effect the Dothan real estate market.
Legislation has been introduced that would bring back these programs. H.R. 6694 would regulate the programs instead of eliminating them. What can you do? Visit Rally for Home Ownership for information on contacting your legislators. Let them know you support down payment assistance and that right now is the wrong time to be eliminating something that means so much to our economy.
Here is a video that really brings to light the real reason for eliminating DPA’s. HUD wanted them gone.
h/t Jonathan Dalton of All Phoenix Real Estate and Jay Thompson, the Phoenix Real Estate Guy
Scariest sentence in the English language – “I’m from the government, and I’m here to help.”
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Monday Market Snapshot - August 18, 2008
August 18th, 2008 - Categories: Dothan area Real Estate Market information, Inside the numbers
By: Charles Woodall
Managing Broker
http://www.dothanhomesearch.com
| Homes on market | 945 | DOWN |
| Median price | $172,900 | UP |
| Avg $ per sq ft | $96.49 | SAME |
| Avg days on market | 160 | UP |
| Least expensive listing | $9,900 | SAME |
| Most expensive listing | $2,500,000 | SAME |
| Pending sales | 133 | DOWN |
| Sales last 7 days | 19 | UP |
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Alabama foreclosures up 73%!!!
August 15th, 2008 - Categories: Real Estate News
By: Charles Woodall
Managing Broker
http://www.dothanhomesearch.com
How is that for a sensational headline? Do you think the media is trying to influence your thinking?
This indeed was the headline of a post this week from the Birmingham Business Journal. As is usually the case though, the headline doesn’t really tell the story. Context is very important.
If you go on to read the entire piece, you will see that the 73% increase is from July of 2007. There was a small 11.5% increase over June, 2008, and it is important to note that the number of foreclosures in Alabama had actually been dropping slightly up until early summer.
Speaking of putting something in context, below is a link to an excellent analysis of the current housing “crisis”.
http://www.cnbc.com/id/15840232?video=780461999
In my opinion, a more appropriate label would be “correction”. A couple of points to take away from this video. First, the State of California has more foreclosures than 40 other states COMBINED. Second, it really does seem that the only time we as Americans can be mobilized to do something is if we call it a crisis.
Hat tip to Bob Fortner (Raleigh Real Estate Talk) and Kathy Drewien (Property Lines Atlanta Real Estate) for the video
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Monday Market Snapshot - August 11, 2008
August 11th, 2008 - Categories: Dothan area Real Estate Market information, Inside the numbers
By: Charles Woodall
Managing Broker
http://www.dothanhomesearch.com
| Homes on market | 960 | DOWN |
| Median price | $169,900 | SAME |
| Avg $ per sq ft | $96.49 | UP |
| Avg days on market | 157 | DOWN |
| Least expensive listing | $9,900 | SAME |
| Most expensive listing | $2,500,000 | SAME |
| Pending sales | 147 | UP |
| Sales last 7 days | 14 | DOWN |
Homes on the market stat is the total of single family residential properties currently listed for sale. All statistical information is from the Dothan Multiple Listing Service (Dothan MLS) and is deemed reliable, but not guaranteed.
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More on Housing and Economic Recovery Act of 2008
August 7th, 2008 - Categories: Real Estate News
By: Charles Woodall
Managing Broker
http://www.dothanhomesearch.com
The more I read about this most recent “accomplishment” of our government, the more convinced I am that it is really nothing more than an election year attention getter. Our government wouldn’t do that would they? Pass a piece of legislation that really didn’t do a whole lot, except generate some headlines?
Let’s take a look at some of the key components. We’ve already talked about one that will have a negative effect on the Dothan real estate market. Here are some of the others.
The intent was good, however the results will likely be far from what was intended. This part of the legislation is supposed to help some homeowners to refinance their existing mortgages with a fixed-rate FHA loan. Problem is, the act is completely voluntary, so the bank or mortgage company doesn’t have to participate, and the criteria that have to be met to be eligible are fairly tight. Communities hit hard by high foreclosure rates will get some money to buy and fix up foreclosed properties, and money was set aside for counseling for families in pre-foreclosure.
Veterans do recieve some much deserved benefits from this act. The period of time a veteran must be home before foreclosure can begin has been increased to nine months, the VA loan guarantee amount was increased, and benefits were raised for disabled veterans that need to modify some accessibility to their home.
In addition to the aforementioned elimination of down payment assistance programs, there are a couple of other reforms to the FHA program. The FHA loan limit has been increased to 110% of the median home price in an area. For us here in Dothan, that means you can possibly get FHA financing on a home priced up to almost $300,000. Also, the required down payment has increased from 3% to 3.5%.
Another big “benefit” of this new legislation is the tax credit for first time home buyers. This is basically an interest free loan that will have to be paid back over the course of 15 years. If you sell before then, you pay it back at closing. Since many Americans give Uncle Sam an interest free loan every year just to get some money back at tax time, it’s only fair that they do the same, right?
These are just some of the points that will effect us here in southeast Alabama the most. There has been a lot of discussion in the blogosphere, and here are some of those links.
The Housing and Economic Recovery Act of 2008: What does it mean for you? from beingfrugal.net
Housing and Economic Recovery Act of 2008 from Maxsell Real Estate.
Lamenting the Housing Stimulus Bill from All Phoenix Real Estate
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Monday Market Snapshot - August 4, 2008
August 4th, 2008 - Categories: Dothan area Real Estate Market information
By: Charles Woodall
Managing Broker
http://www.dothanhomesearch.com
| Homes on market | 965 | DOWN |
| Median price | $169,900 | SAME |
| Avg $ per sq ft | $96.14 | UP |
| Avg days on market | 159 | UP |
| Least expensive listing | $9,900 | SAME |
| Most expensive listing | $2,500,000 | SAME |
| Pending sales | 145 | DOWN |
| Sales last 7 days | 24 | UP |
Homes on the market stat is the total of single family residential properties currently listed for sale. All statistical information is from the Dothan Multiple Listing Service (Dothan MLS) and is deemed reliable, but not guaranteed.
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Dothan Real Estate Market - July Foreclosure Report
July 30th, 2008 - Categories: Dothan area Real Estate Market information
By: Charles Woodall
Managing Broker
http://www.dothanhomesearch.com
According to RealtyTrac (via the Birmingham Business Journal), foreclosures in the state of Alabama were up 22% in June. However, RealtyTrac’s second Quarter report showed numbers up 7.59% from the first quarter, but down slightly from the second quarter of 2007. According to the release, there were 683 homes in some state of the foreclosure process, and over 1100 already foreclosured homes up for sale across the state.
Here in the Dothan area, RealtyTrac only lists 15 foreclosed properties, which is really an insignificant number. Anyway you look at it, the Dothan real estate market is not experiencing any increase in foreclosures at this time.
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Congress locks out ten percent of Dothan home buyers
July 28th, 2008 - Categories: Buying a home in the Dothan area, Real Estate News, Selling a home in the Dothan area
By: Charles Woodall
Managing Broker
http://www.dothanhomesearch.com
The U.S. Senate passed HR 3221 Saturday morning, and unless President Bush changes his mind again, he will sign what Congress has named the Housing and Economic Recovery Act of 2008 into law sometime this week.
Among the many problems solved addressed with this legislation, one particular provision will likely have an big impact on the Dothan real estate market. In Section 2113 there is a provision that prohibits FHA from insuring loans unless the buyer puts down at least 3.5% of the appraised value. This provision effectively eliminates down payment assistance programs such as Ameridream and Nehemiah, which have been used by home buyers and sellers to put deals together for a number of years.
Why will this particular item have a profound impact here in the Dothan real estate market? Because these programs have meant the difference between being able to buy or not for hundreds of Dothan residents over the last few years. Through the end of June, there have been 632 homes sold in the Dothan area this year, according to the Dothan MLS. Of these, 145 used FHA financing. While we do not know the exact number out of the 145 that used a down payment assistance program, a couple of mortgage folks I talked confirmed my suspicions and indicated that the vast majority of FHA loans they have processed this year have. Even if the number is as low as 50%, that is around 70 buyers that would likely have been unable to buy. With the passage of this legislation, the Federal Government has effectively taken 10% of our home buyers out of the market.
What does this mean to home sellers? If your home is priced between $60,000 and $150,000, which is the likely price range for FHA buyers, then you will be losing about 10% of your buyer pool effective October 1.
An in-depth look at all the aspects of this legislation is needed in order to weight benefits versus costs. At some point I will share some of these and how they will effect the Dothan real estate market. At first glance however, this little provision will have the most immediate impact, and it’s not going to be positive.
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Monday Market Snapshot - July 28, 2008
July 28th, 2008 - Categories: Dothan area Real Estate Market information
By: Charles Woodall
Managing Broker
http://www.dothanhomesearch.com
Monday Market Snapshot - July 28, 2008
| Homes on market | 985 | UP |
|---|---|---|
| Median price | $169,900 | steady |
| Avg price per sq ft | $95.87 | DOWN |
| Avg days on market | 158 | down |
| Least expensive listing | $9,900 | same |
| Most expensive listing | $2,500,000 | same |
| Pending sales | 150 | UP |
| Sold - last 7 days | 16 | DOWN |
Coming later this week we’ll have an update on foreclosures, information on new Dothan school zones, and the end of down payment assistance programs for Dothan home buyers.
Homes on the market stat is the total of single family residential properties currently listed for sale. All statistical information is from the Dothan Multiple Listing Service (Dothan MLS) and is deemed reliable, but not guaranteed.
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Dothan Real Estate Steady Compared to Most of Alabama
July 25th, 2008 - Categories: Dothan area Real Estate Market information
By: Charles Woodall
Managing Broker
http://www.dothanhomesearch.com
The Dothan area real estate market was the only area in Alabama to show positive sales growth in June, data from the Alabama Center for Real Estate shows. According to a story in The Dothan Eagle, Dothan was the only market in Alabama to show an increase in June, compared to last year. As posted earlier, home sales here are down about 12% through the first half of the year, compared to the same period in 2007.
So why is this market seemingly stronger than many others around the state? A couple of reasons. First, Dothan has experienced a population boom over the last several years. Second, our local economy is diverse and not reliant on any one industry for growth. Another factor might be affordability. A median price of around $135,000 puts home ownership within reach of many Dothan area residents.
Keep in mind that we do not use statistics from ACRE in our reports here. We use data from the Dothan MLS, which will not include most for sale by owner properties and some new construction, but is timely and overall very representative of the Dothan real estate market as a whole.
Why do you think the Dothan real estate market is not following the trend of sharply declining sales similar to other areas around Alabama and the nation? Let us know by commenting below.
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