By Staff
Despite national housing slump, local market tagged as 'average'
Jason Cannon
Franklin County Times
More than 18,000 job cuts have been announced in the housing industry since Sept. 4. A record number of Americans faced foreclosures in the second quarter, the Mortgage Bankers Association in Washington reported last week.
Countrywide Financial Corp., the largest U.S. mortgage lender, said Friday that it will cut 10,000 to 12,000 jobs.
The phrase "housing slump" has been thrown around in national headlines for weeks, as experts warn home buyers, sellers and lenders that the real estate bubble is about to burst. However, local real estate agents and brokers can't seem to figure out what all the fuss is about.
"People are buying," said Willodean Davis, owner and Broker of Davis Realty and Associates in Russellville. "I think the market strength is relative to what you're looking for and where you're looking. The market in Franklin County is good."
John Davidson, owner and broker of Davidson Realty in Russellville, agreed.
"There's always a good market for moderate to medium priced homes in Russellville," he said. "That's the price range that the majority of the buyers in the market can afford. I would say the housing market in Russellville is average, like it always is and has been for a long time."
Davidson said sellers who may classify the market as weak may have a property that is difficult to move in a particular market.
"If you've got a half a million dollar house in Russellville, it may take a little longer to sell," he said. "Not because there's anything wrong with the market, just because there are fewer buyers who can afford that type of home."
In an effort to help boost the sluggish home market, the Federal Reserve's policy-setting body reduced interest rates for the first time in more than four years Tuesday afternoon.
The federal funds rate is now at 4.75 percent, a cut of one-half of a percent.
A cut in the interest rate could help people who owe money by easing interest on variable-rate credit cards and adjustable-rate mortgages. Anyone facing an ARM reset still should expect higher payments, but not quite as high as they might have been otherwise.
The move by the central bank is seen coming amid evidence of a slowing economy, and a painful credit crunch linked to the housing market retrenchment.
The prime lending rate that commercial banks charge many individuals and businesses also falls by one-half of a point to 7.75 percent.
Foreclosure filings across Alabama rose more than 28 percent in August compared to the previous month and 68 percent from the same month in 2006, a rise that was lower than the national average, according to a firm that tracks mortgage defaults.
California-based RealtyTrac said 636 homes in the state were in some stage of foreclosure last month. That means there was one filing for every 3,274 households in Alabama, a rate that was much better than the U.S. average of one filing for every 510 households. U.S. filings rose 36 percent last month compared to the same month in 2006 and 115 percent from the previous month.