With Alabama mortgage loans - and housing in general - so far out of reach for many, the following is good news:
The Federal Home Loan Bank of Atlanta is awarding $4.6 million to affordable housing projects in the stats, part of a $20.9 million allocation to projects in 12 states and Washington, D.C.
The $20.9 million will provide grants and subsidies to 68 affordable housing projects, or 2,777 housing units. Individual grants range from $23,000 to $500,000.
The funding will help local community developers build, buy or preserve 2,429 units in Alabama, Florida, Georgia, Maryland the Carolina and Virginia housing markets. It will also be used to develop 348 units through partnerships in five states outside the FHLBank Atlanta’s southeastern district.
Alabama’s share of the funding will be used for 626 units in the state.
“This funding will help developers bring affordable housing projects with total development costs of more than $230 million to neighborhoods and underserved communities from Arkansas to [the Maryland housing market],” Raymond Christman, FHLBank Atlanta’s president and CEO, said in a news release.
The awards are part of a competitive grant program intended to spur the development of owner-occupied and rental housing for very low-, low- and moderate-income families. The hope is to avoid dangerous bad credit mortgages for this demographic.
Awards are made biannually to financial institutions and community housing partners. FHLBank Atlanta has provided more than $300 million for affordable housing projects in the Southeast since 1990.
A national home loan lender is refusing to finance homes for buyers who do business with a real estate company in Alabama, a decision that is causing headaches and costing money for the company and its clients.
Reports say Countrywide Mortgage hasn’t financed the home buyers whose real estate agents work for Alabama Home Finders for nearly 18 months, or ever since the two-year-old real estate group hired away one of its employees.
According to the Montgomery Advertiser, the real estate broker, which sells homes in Prattville, Montgomery, Wetumpka, Millbrook and Lake Martin areas, filed lawsuits against Countrywide in September in Montgomery County Court.
Still in the discovery process, the action alleges Countrywide, a mortgage company with offices in Montgomery and across the country, intentionally interfered with the realty association’s business and contractual relations at least five times - and has cost its real estate agents at least $69,983 in lost profits and commissions.
An attorney for Countrywide declined to comment when contacted by the Advertiser on Monday. Countrywide has denied all allegations in court papers.
The filed lawsuit also alleges a home buyer who was preapproved for financing with Countrywide lost nearly $20,000 in finance charges after Countrywide refused to process his Alabama mortgage because his real estate agent worked for Alabama Home Finders.
One of the home buyers, Jorge Guzman, is a plaintiff in the suit along with Alabama Home Finders and its president, John R. Colley. Arlene Richardson, counsel for Alabama Home Finders, also represents Guzman.
Posted by Richard Barber on Jan 10 2007 under Alabama
Local mortgage brokers say the Birmingham market has always been characterized by slow and steady growth - usually avoiding the extreme fluctuations that have often cursed other regions.
As the calendar turns to 2007, residential real estate professionals don’t expect that to change this year. They’re forecasting another year of steady, if unspectacular, performance for the metro area.
Tommy Brigham, chairman and CEO of RealtySouth, said he expects 2007 to be similar to the year Birmingham had in 2006, with the main indicators - unemployment, job creation and mortgage interest rates - suggesting another steady year for the metro area.
“Our housing industry doesn’t have the ebbs and flows, the hyper-inflation and the fall-out that comes from the very strong jumps,” Brigham said. “We are stable and move slowly, but comfortably along.”
Brigham said that comfortable growth has allowed the metro area to keep some upward mobility in terms of housing prices for Alabama mortgage seekers - a luxury that some other markets do not have for 2007.
Those conditions have led to what Brigham describes as a “stable market for both buyers and sellers,” with sellers realizing a reasonable amount of appreciable growth and a reasonable supply of homes that allow buyers to be more selective.
Cody Cato, a residential Realtor for Abana Realty, said he believes the Birmingham housing market will be a buyer’s market in 2007, due to the high supply of homes on the market - which has topped 10,000.
“This time last year, we had six or seven thousand,” Cato said. “Homes are beginning to take longer to sell. Higher-end homes are taking about a year.”
Despite the high supply, Cato and other home mortgage brokers said they expect prices to hold and possibly increase marginally.
Leonard Zumpano, Alabama Association of Realtors Chair of Real Estate and professor of finance at the University of Alabama, projects that 2007 will be very similar to 2006 for the Birmingham market.
“I suspect (2007) will be comparable to 2006, maybe a tad slower in the first half of the year,” Zumpano said. “I just don’t see any bad news on the horizon for the state.”
Posted by Jed Moss on Jan 08 2007 under Alabama
In Alabama, the average renter will have to earn $10.55 an hour to keep rent and utility payments from exceeding 30 percent of his income before taxes, according to the Mobile Register.
According to the report, renters in Mobile County will have to earn a housing wage of $11.35 per hour to afford rent and utilities on a two-bedroom unit. In Baldwin County, one would have to earn $12.38 per hour.
The housing coalition defines the housing wage as the hourly pay rate needed to afford a two-bedroom unit at the fair market price plus utilities with both costs not exceeding 30 percent of a worker’s monthly income.
The results of the study show that workers earning minimum wage have a difficult time finding affordable housing. Even a proposed increase in the minimum wage to $7.25 per hour, officials say, won’t solve the problem.
“This gap will still exist,” said Sheila Crowley, president of the Washington, D.C.-based National Low Income Housing Coalition.
U.S. Rep. Barney Frank, D-Mass., also participated in the teleconference. Frank is the incoming chairman of the House Financial Services Committee, which deals with housing policy.
Frank said during a teleconference that “the federal government should be assisting in building and preserving affordable housing.”
“Every year it becomes more difficult for low-income families to find decent homes they can afford,” Crowley said. “As we approach the holiday season with its intense focus on consumer spending, ‘Out of Reach,’ shows the difficulty that millions of low-income families face to even pay for their homes.”
In Alabaman the average fair market value of a two-bedroom apartment is a rent payment of $549. To afford this amount of rent and utilities and not exceed 30 percent of the household’s monthly income, a resident must earn $1,829 monthly, or $21,946 annually.
Assuming a 40-hour work week, 52 weeks per year, this translates into a housing wage of $10.55 per hour, according to the study. There’s little chance of qualifying for an Alabama mortgage without significantly more money than that coming in.
In the Yellowhammer State, the estimated average wage is $9.45 an hour, according to the report. In order to afford the market rent for a two-bedroom, the worker would have to put in 45 hours per week, 52 weeks a year.
“That assumes no vacations, no sick leave and no transfers, no nothing,” said Danilo Pelletiere, the housing coalition’s research director.
In the Mobile metropolitan statistical area — which the coalition defines as Mobile County — a renter would have to earn a housing wage of $11.35 per hour. The fair market rent for a two-bedroom unit is $590 a month, meaning an annual income of at least $23,600 would be needed.
The coalition lists Mobile County’s area median income at $49,500. Crowley said that some government assistance comes from Section 8 vouchers, but thousands more are needed.
Charles Pharr, director of the Prichard Housing Authority, agreed. For the last two years, as the housing market boomed, then cooled, the authority has “closed” Section 8 lists, meaning that no new names are being added and no additional vouchers are offered.
“We expect to open the list in the next six months,” Pharr said.
The Section 8 program provides financial assistance to those renting from private property owners.
Housing coalition officials said they want Congress to create a national housing trust fund that will help communities develop more affordable housing. The proposal has been on the table for a number of years, Crowley said, but federal officials have not determined a funding source.
“Unstable housing (situations) have impacts all over the place,” Crowley said. “There has to be a more holistic approach to understand all the wage, marketing and policy impacts that ultimately impact family life, but that’s not the way the government is structured.”
Officials say they do the best we can to work in the system in place. But, clearly, housing is basic. It’s a problem if you don’t have stable, safe, decent places in a neighborhood you feel comfortable in. All of the other things we expect to have for success, all of those things are harder if you don’t have enough money to pay rent, much less a home mortgage.
The tide of the real estate market around the U.S. Gulf Coast has rushed out as quickly as it rolled in last year, real estate agents and property owners say. But all said they expect investors - and their cash - to roll into town again eventually.
“The market was looking up for the first time ever in the Bayou. Then Katrina came along,” Mary LaForce, 57, told the Montgomery Advertiser.
In the real estate excitement before last year’s cataclysmic hurricane, she and her husband put a “for sale” sign in front of their house and one acre lot in the town’s commercial center. They were asking $350,000.
Last week, they sat in a travel trailer on the lot. Their home was heavily flood-damaged by Katrina, and an agent told them the property would be worth more without it.
They tore the house down. Now their listing price is $240,000.
“If we don’t get a reasonable offer on it in a few months, I’m just going to build another house here,” she said. “This is the last frontier on the Alabama coast that development hasn’t touched - yet,” said her husband, Allen LaForce. “It’ll come here eventually, and we can wait.”
People like the LaForces have owned property in the Bayou for decades, and hope to sit on their lots and make a bundle when and if interest in the Bayou returns. Others are more recent arrivals who hoped to turn real estate investments quickly and now suspect they’re stuck for a while.
“The market has dropped off fast. It’ll come back again in the future, but nobody knows when,” said Bill West, standing on the balcony of his two-story house on the bayou’s northern narrows.
“It’ll be a hard sell, and I know it,” West said.
The market hasn’t risen as fast as he’d expected. But no one expected Hurricane Katrina. Real estate records show that the volume of property sales rose by more than 100 percent in 2005 in the Bayou, where, for generations, most property changed hands only through transfer of ownership between family members.
Waterfront property values went up more than 50 percent in 2005, according to property sales records. Then in August came Hurricane Katrina and the following Gulf Coast-wide real estate slump. This year, property sales dropped back down to 2004 levels, and prices have dropped more than 30 percent from last year, according to local recorded deeds.
“The trends here are pretty much in line with what you’re seeing everywhere along the Gulf Coast right now,” said Marc Estes with ACP Real Estate in Bayou La Batre.
The difference in the Bayou is that the market had only just begun to draw investor interest when Katrina hit. In 2003, just six properties were sold in the Bayou, according to records. In 2004, sales rose to 18 properties.
Then, last year, 40 properties changed hands, more than 60 percent of them snapped up by investors and speculators looking to cash in on low home mortgage rates, according to Mobile County property sale records.
This year, just 16 properties were sold, according to records.
Some blame the sagging Alabama housing market on the city’s decision to call off its deal with James. In an October 2 meeting with Mayor Stan Wright and the City Council, Wright told James that the old deal was off.
The city plans to open the floor to proposals from all interested developers within a year or so, and James and his partners are welcome to submit a new offer then. Real estate agents, however, say there are much larger forces at work in the Bayou than Tim James.
“The entire Gulf Coast is facing the same problem right now,” said Lee Martin of Port City Realty. Sales on Dauphin Island are down 65 percent from last year, according to property records, and sales are also down in and around Gulf Shores, even as Alabama mortgage rates remain low.
Posted by Richard Barber on Dec 15 2006 under Alabama
When Joyce Mizer decided to move to Northport, Ala., from Connecticut, all the gloom and doom surrounding the national housing slump didn’t faze her in the least.
“This is my tenth house to own, so I know a little bit about it. I had no trepidation about buying or coming back,” Mizer said.
Iris Hinton, a broker at RE/MAX Partners on McFarland Boulevard, said Mizer was right not to worry.
“Even with a slowing housing market (nationally) there are still pockets of activity that continue to grow. This is the case with the Tuscaloosa area,” Hinton said.
In fact, the Alabama real estate market is likely to finish 2006 strongly despite recent drops in sales and prices, said Leonard Zumpano, director of the Alabama Real Estate Research and Education Center at the University of Alabama.
“The fundamentals for a strong year for housing are still in place: record low unemployment, a robust economy and moderating gas prices and mortgage rates,” Zumpano said.
The center monitors the Alabama housing market and its activity across 22 counties, including Tuscaloosa. Housing activity in Tuscaloosa County has slacked off of late, with existing home sales dropping from 238 in August to 159 in September, the last month for which data was available.
The average selling price dropped $4,443 to $173,016, while the average number of days a Tuscaloosa home spent on the market increased by two, to 131. Even as Alabama mortgage costs have remained relatively low, demand has lessened amidst an uncertain economy and high energy costs.
But despite the decline, sales still exceeded September 2005. Year-to-date, sales have only dipped below 2005 levels twice, according to data from the Tuscaloosa Association of Realtors.
“That was almost astounding to me to realize, because of all the media blitz we’re hearing,” Hinton said.
The home sales are a sign that the area housing market is far from bubbling over, or even forming a bubble in the first place. In a real estate bubble, prices — often driven by speculation — increase sharply. When prices go higher than the ability of most people to pay, the bubble bursts. The buyer pool shrinks dramatically, forcing sellers to make drastic cuts in prices.
It’s an ugly drama that has been played out numerous times over the past year, with Arizona, Florida and much of the California housing market being hit hard.
Alabama, however, has largely been immune to the phenomena, the Montgomery Advertiser notes. Hopefully for the Yellowhammer State’s aspiring buyers, that trend continues.
Posted by Richard Barber on Nov 22 2006 under Alabama
Looking for a great deal on a home you actually can afford with a modest Alabama, Tennessee or Georgia mortgage? Today just might be your lucky day.
According to the Birmingham Business Journal, Hudson & Marshall, Inc., will host a real estate auction in which 15 foreclosed properties in Alabama and more than 200 properties in Georgia and Tennessee are sold off month.
The Dallas-based company said in a news release that the real estate up for sale is currently owned by mortgage lenders and asset management companies across the U.S., some of which purchased the properties after foreclosure.
The value of the properties to be auctioned range from $10,000-400,000, and in addition to low asking prices, there’s another incentive for aspiring buyers.
Each home will come with title insurance, effectively guaranteeing there are no back taxes due or liens on the properties. This is a big deal for someone buying a foreclosed property.
In the past eight years, Hudson & Marshall has sold more than 40,000 houses on behalf of many a mortgage lender looking to get out of the property managing business ASAP, as well as on behalf of investors who gobble up distressed homes and look to flip them for a quick profit.
And as we’ve discussed, the market for this kind of activity is heating up.
Foreclosures have skyrocketed across the United Sates in recent months, and the south, where more people are having trouble paying their Florida and Tennessee mortgage loans (among others) is no exception.
For the month of October, Alabama, to use just one example, had a total of 519 properties in foreclosure, an increase of 228 percent compared with October 2005.
Birmingham ranked 62nd out of 100 major metro areas in foreclosures for the third quarter of 2006, according to RealtyTrac Inc., which monitors foreclosure activity across the country.
The findings countered news that the Alabama housing market also saw home prices dwindle over the last few months.
This should lead to a decrease in future defaults - but for now, RealtyTrac reported the Birmingham/Hoover metro area had a total of 878 properties in some stage of foreclosure in the third quarter, an increase of more than 70 percent from the second quarter of this year.
Nationally, a total of 318,355 properties were in foreclosure proceedings during the third quarter, a 17 percent increase from the second quarter. The most recent total translates to one home loan foreclosure for every 363 households.
Metro areas with the most foreclosure proceedings in the third quarter were Detroit, Fort Lauderdale, Denver, Miami and Dallas, in that order, RealtyTrac statistics show. Atlanta ranked eighth and the Memphis housing market ranked 10th.
“It appears that a combination of factors, including a slowdown in home sales and lower home appreciation rates, are contributing to higher numbers of delinquencies,” said James J. Saccacio, chief executive officer of RealtyTrac.
“It’s also likely that part of the reason for the increased foreclosure rates is the long-anticipated effect of the first wave of adjustable rate mortgages re-setting at higher monthly payments, putting homeowners into financial distress.”
As reported earlier, the Alabama housing market has seen sales rise throughout the summer, a trend not seen in many areas of the country.
Now, the state is undergoing another unusual patter, this one favoring potential buyers and borrowers.
There was a 3.2-percent decline in the state’s median home price, coupled with a negligible increase in mortgage rates, that made Alabama houses more affordable in the third quarter, university researchers report.
According to the Alabama Real Estate Research and Education Center at the University of Alabama, the median home price in Alabama was $137,212 in the third quarter, down from $141,730 in the previous quarter. The composite mortgage interest rate, meanwhile, inched up modestly in the third quarter to 6.77 percent.
“Because the fall in home prices more than offset the effects of rising [mortgage interest rates], housing affordability rose slightly,” the UA research center states in a new release.
Unfortunately, the statewide trend did not hold true for eight of the 11 Alabama metropolitan areas included in the AREREC research, while affordability also declined slightly in four of the five counties used in the statewide average.
However, the university’s “Housing Affordability Index” - a measure of the ability of a family earning Alabama’s median income to purchase a median-priced house - did improve in Birmingham during the third quarter.
The news on the national level remained sobering during the quarter ended Sept. 30, as similar measures of affordability declined, the university’s AREREC reports.
A household earning the U.S. median income of $57,837 “could just barely qualify” for a mortgage loan to buy a house at the median price of $225,000 during the third quarter, the news release said.
The UA researchers noted that home prices actually fell nationwide during the third quarter, but rising mortgage rates precluded any improvement in affordability during that period.
Posted by Jed Moss on Nov 10 2006 under Alabama
After posting sharp declines in July, the Alabama housing market was back on track in August, according to recent figures from the Alabama Real Estate Research and Education Center at the University of Alabama.
The Tuscaloosa News reports that even as more residents struggle with mortgage payments, mortgage loan demand appears to be returning to the Heart of Dixie. Statewide, existing home sales were up 8.2 percent from the previous month, to 5,790. However, they remain down slightly since June.
“In order to keep these numbers in perspective, it should be noted that existing home sales set an all time record in June when 6,032 units were sold. So far this year 40,979 homes have been sold compared to 40,307 through the first eight months of 2005,” said Leonard Zumpano, Director of the UA center.
It’s interesting to note the disparity between a place like Alabama and the Colorado housing market, which has grown so fast in the previous five years that people are now worried about a market correction — and possible recession. Here, growth has been moderate and steady.
Some interesting facts contained in the study:
- In Tuscaloosa County, 238 existing homes were sold in August, compared to 209 in July and 188 in August 2005.
- Year-to-date, 1,573 homes were sold in the county, compared to 1,409 during the same eight-month period last year.
- Existing home prices in Alabama also rose slightly in Au-ust after dropping in July. Last month was the first time this year home prices fell.
- The average selling price rose to $161,132 in August, up a little more than $3,500 compared to August of last year.
- Year-to-date home prices are up $9,600.
- The average selling price in Tuscaloosa County was $177,459 in August, up from $160,215 in July. In August a year ago, the figure was $148,503.
While Alabama mortgage demand appears healthy, the market does not look as positive at the national level. Existing sales continued falling in August, the fifth consecutive month, dropping by 0.5 percent to an annual rate of 6.3 million sold.
National existing home sales are down by 12.6 percent compared to August of last year. With mortgage costs rising steadily, the median price for previously owned homes also fell in August to $225,000, the first price decline in 11 years. In August of last year, the median price was $229,000.
Housing starts, an indicator of future housing market activity, dropped by 6 percent in August, a much larger drop than analysts had expected, said Zumpano. The number of housing starts for August, 1.665 million, is the lowest number since April 2003.
“At the center, we expect further sales and price erosion through the end of the year, but we think most of the downward adjustments will occur in those markets that had previously experienced very high rates of price appreciation during the previous five years,” Zumpano said.
“The market in Alabama, where the increase in home prices has been moderate but steady, will probably remain relatively stable, buttressed somewhat by the recent decline in mortgage rates, a robust state economy and strong job market.”
Posted by Richard Barber on Oct 17 2006 under Alabama
