Yesterday, Jon Zolsky asked me how he could find out if his area (Daytona Beach, FL) is also in a Declining Market. On my previous post, Is Your City in a "Declining Market"?? I talked about the fact that Minnesota has just been added to that glorious roster. Yes, I am being quite sarcastic, as this designation brings us tighter lending restrictions, per Fannie/Freddie guidelines, making it harder to offer mortgage products at maximum LTV and severe scrutinization of appraisals.
This is a Great question! As agents and mortgage professionals, we should all be aware of how our local housing markets are performing. You can use this information to better serve our buyers and counsel them on mortgage restrictions due solely out of the current, local market conditions.
It can also serve to counsel your sellers on correct and intelligent pricing of their homes! Recently, I spoke with an agent who was dealing with a seller who absolutely refused to lower their price. The home has been on the market nearly 120 days. I recommended doing another CMA. Here was my point...even if the seller is LUCKY enough to find a buyer who is willing to pay the current price, the appraisal may not even support that price. In a Declining Market, as we are in Minnesota, the appraisal will go under the microscope...underwriters are LOOKING to find things wrong with it...it will go to a Desk Review and it darn well better pass or the deal is killed.
So how do you find out if your state, county or city has been "labeled"? Here is a good place to start:
Office of Federal Housing Enterprise Oversight
In addition, click on the link Black List. This is a list that a prominent lender has regarded as the soft, getting bad and worst markets in the country.
To answer your question, Jon? Yes, unfortunately your market has been "labeled", too. Join the club of declination!
So what's the good news in all this doom and gloom? Call your sellers with new ammo...get those prices reduced and get them sold...Also, if you have not reached out to the First-Time Homebuyer community, you're missing the boat. No, you're missing the Titanic. This is a wonderful opportunity for first timers to snatch up a great deal. And from a mortgage standpoint, FHA, VA and Rural Housing is stronger than ever!
Happy Selling in this CRAZY, CRAZY Market!
