What We’re Up To

I am asked “How’s the market in Memphis?” frequently. This is a very good question without a one line answer. From a Realtor’s point of view I would say for the most part people are having a hard time selling their homes. We’ve seen more than 10% fewer homes being sold this year compared to last. Buyers who can get financing are having a field day because they’re able to get a little more house for their money or spend a little less on the houses they want. It means the agents who have specialized in listing houses are now forced to start looking for buyers. It’s not an easy transition but an important one if they want to stay in this business.

Most people have at least heard of the collapse of the sub prime debt market. I’d like to take a moment and shed a bit of light on what’s really available for buyers or people with less than perfect credit: A lot! There are programs through the Federal Housing Administration, other government agencies, community organizations and even local banks that are still available. There’s one community organization that as of today has a 5.25 30 year fixed interest rate even if you have a credit score below 600. They do take your over all financial picture into consideration and have other ways of assessing how risky it would be to lend money to you. They are a good and fair company and they have not had a single foreclosure since 1993! These programs are available today.

So what is the real result of the “collapse?” It means the tens of thousands of people who have gotten loans on easy terms or people who have gotten loans creatively when they really couldn’t afford them are no longer able to get those loans. When the sub prime market first began to fall apart the lenders that were able to stay afloat raised their criteria for lending unmanageably high. There were also several hundred lenders (who are also called investors) who have closed up shop because they had lost so much money. I’ve heard stories of people who had gotten a “clear to close” on their home purchase on a Tuesday to close on a Friday. On Thursday they were notified that the lender had gone out of business and the whole process would have to start over. These truths and the media’s on-going dramatic retelling (Chicken Little, anyone?) have given the over all impression of loans being hard to get. As I mentioned above it’s not that people can’t get financed, the real qualified borrowers are the only ones left standing, as it should be.

-BMS