Tuesday, 02 September, 2008
With statewide home sales down by 5 percent from last year and the median single-family home price down 12.5 percent from $280,000 in July of last year to $245,000 this year, many realtors miss the days of the housing bubble.
But for Cheryl Henshall, a real estate agent who lives in Warwick Neck, things have never been better.
“I’ve at least doubled my sales from last year. I’ve been very lucky,” said Henshall, who has tailored her business to specialize in first-time homebuyers and purchasers of foreclosed properties.
In July alone, Henshall closed on nine houses. It was her best month ever in her six-year career as a real estate agent.
Over 26 percent of all houses sold from April until July was either foreclosed properties or short sales—both of which sell at far below the market price.
The so-called sub prime crisis, in which people who took out gimmick loans with initially low interest rates that later skyrocketed, has created a high level of foreclosed or “distressed” properties.
Henshall wisely tailored her business to first-time homebuyers who may be interested in purchasing a foreclosed property at a reduced rate.
“The banks are dying to get rid of these foreclosed properties, so there really is a buyer’s market out there as long as you put in a reasonable offer,” said Henshall.
Henshall said purchasing foreclosed properties isn’t all fun and games. House inspectors usually find problems that the owners and buyers don’t notice, and the houses many times need a lot of work. She often finds herself driving around at 9 o’clock at night looking at houses for her clients.
A positive attitude and a good work ethic make the job easier, Henshall said, and seeing her clients realize the dream of home ownership makes her feel good about the work.
“For me, that’s the fun of it, being able to see a thrilled young couple buy their first home,” said Henshall.
In Warwick, single-family home sales have dropped from the second quarter of last year to this year. Last year, 283 single-family homes in Warwick were sold. This year, only 227 single-family homes were sold in the second quarter of the year. And the median housing price dropped from $230,000 to $205,000.
Robert Scaralia, president of the Rhode Island Realtors Association, agrees with Henshall. Scaralia also said it’s an exciting time to be a first-time homebuyer.
But realtors have a reputation for being eternal optimists; the glass is always half-full. When the housing prices are down, they say it’s a great time to be buying homes. When prices skyrocket, as they did beginning in 2003, they incessantly point out that it’s a great time to be selling houses.
“The affordability is back for the first time home buyer. I’ve been doing this for over 20 years, and I have never seen a better opportunity for people to get into home ownership for the first time,” said Scaralia. “If people are thinking long-term, they shouldn’t try to time the market. The window of opportunity is in the here and now.”
A new housing tax credit for first homebuyers who haven’t purchased a home in three-years, Scaralia pointed out that while home prices have dropped, interest rates have remained “historically low.”
Scaralia also noted that the housing bubble has been painful for realtors, but a downturn was bound to happen eventually.
“All things considered, we had to moderate and market correct, and there was pain in that. But we’re seeing light at the end of the tunnel now,” said Scaralia, pointing out that inventories have recently dropped, a sign that homes are in demand.
Richard Torres, a loan officer for Countrywide Financial who works in Warwick, said there is no shortage of available capital for qualified buyers.
“We’re back to old school lending. That’s a good way to put it,” said Torres.
Torres said he’s seen a recent pickup in business. More people are seeking loans than a year ago, but the amount of money they’re looking for has decreased.
The old ways of no credit check loans have given way to solid background checks, said Torres, and he thinks that’s a good thing.
“There are a lot of people who come in here and say, ‘oh my credit is good, but when I check it, it’s far from good.’ And these people would have gotten the loans in the old days,” said Torres.
Source: http://warwickonline.com
