Real estate scares are simply not a factor in the local market
“OUR REGION MAY BE THE SILVER LINING to the dark cloud hanging over real estate financing,” comments Wally Bateman, President of Paducah Bank. “Not only has our average price of homes increased from last year, but housing is currently extremely affordable in our communities, with low fixed interest rates being offered.”
This statement may seem out of sync with what you’re hearing and reading in the national media, but local statistics support the supposition that the situation here in the western Kentucky region is in stark contrast to what other parts of the nation are experiencing.
Mortgage data from RealtyTrac, a national company monitoring the status of real estate markets across the country, reports that Kentucky was one of only five states that didn’t report year-over-year, third quarter increases in foreclosure filings, including notices of default, auction sale notices or bank repossessions. Comparing the first ten months of 2007 with that of 2006, Foreclosures.com showed a drop in the number of foreclosures in Kentucky from 5,458 to 3,789 (0.69 per capita).
“Our local housing market is actually growing stronger,” Wally adds. “Paducah Bank made $35 million in secondary mortgage loans through October of 2007, up $8 million over the first ten months of 2006.”
Bankers in the Paducah area credit a stable economy and conservative lending practices for a 31 percent year-over-year drop in the number of foreclosures in the state. Nationwide, the number of homes in foreclosure roughly doubled during the most recent quarter reported by RealtyTrac. The three states with the highest foreclosure rates during the third quarter were Nevada, California and Florida.
In addition, many borrowers are finding that their Internet mortgage brokers have either gone out of business or simply disappeared, leaving homeowners with expensive and unfavorable products.
“I think it’s our conservative nature around here,” Wally believes. “We don’t boom, nor do we bust. Homes in Paducah are built on contract, versus large, speculative subdivisions built in some larger cities and along coastal areas. That kind of speculative building, along with the impact of adjustable rate mortgages for some people, probably makes the most dramatic difference when comparing our real estate market with that of more metropolitan areas.”
“Given the number of loans due to reset through the middle of 2008, and the continuing weakness in home sales, we would expect foreclosure activity to remain high and even increase over the next year in many markets,” said ECO James Saccacio of RealtyTrac.
Not so in the Midwest, according to CNNMoney.com. “Midwest cities dominated the top of the most affordable housing markets list and the median price in the Midwest of $170,700 was up 1.4% from September 2006,” the Internet site reported.
“This is great news for those of us who own homes in our area,” President Wally Bateman adds. “It is even better news for those who want to become homeowners, but have been frightened by the recent national statistics regarding real estate. Our market is steady. Our housing market is strong and mortgage rates are coming down making owning your own home safe and affordable.”
PADUCAH AVERAGE HOME PRICES INCREASE
Contrary to the experience of many markets around the country which have seen severe dips in the average price of homes, the western Kentucky region has actually experienced an increase.
Average Regional Home Price End of 3rd Quarter
2006 . . . . . . . . . . . . . . . . . . . . . . . $122,134
2007 . . . . . . . . . . . . . . . . . . . . . . . $125,765