YTD Market Report - October 2007

The market has kept pace with last year through September but showed a minor slowdown through October for residential single-family homes. Listings for the year are up by 579 which gives buyer a few more choices for homes in the Tulsa, OK area but out of a total of 23,762 listings processed for the year, this is not really notable for Oklahoma home buyers in the Tulsa area.

Closed sales are down by 218 but again, with a total of 12, 357, the percentage is small. My personal concern is that the combined small percentages can have an impact if they continue.

My kudos to the Greater Tulsa Association of Realtors who have begun a campaign to educate the public on the strength of the Tulsa, Oklahoma housing market. Much of the challenge to Tulsa, OK Realtors has been combating the national media's portrayal that the no real estate will sell anywhere in the country and everything has decreased in value by 50%. The fact is the Tulsa metro area home sales have increased an average of $8,435 through October.

Shop homes for sale in Tulsa, OK

Darryl Baskin is the Managing Broker for McGraw Realtor's office at 308 N. Aspen Ave. in Broken Arrow, OK 918-258-2600

Good Thing You're in Tulsa

The Greater Tulsa Association of Realtors recently began a campaign to make the public aware of the inaccuracies of the national news media in regards to the Tulsa real estate market. The campaign will focus on the stability of Tulsa real estate, the fact that there was no bubble here to burst and that home sales have remained at a steady pace. The average homeowner in Tulsa, OK can expect a 3-5% growth rate in their property value.

Thinking about selling? Find out what your property is worth.

Darryl Baskin is a Tulsa, OK real estate broker for McGraw Realtors. 918-258-2600 or 800-942-9312

Shadow Ridge Pricing Market Update

According to the Tulsa Metro MLS, the Shadow Ridge Subdivision, located in the Union School District, is not lacking in activity. There are 10 current active listings and 4 pending, this absorption rate results in 2 1/2 months of active inventory. If you live in this South Tulsa neighborhood and want to sell your home in the shortest time period possible, be strategic.

• Listen to what the market is saying about home values in order to determine a price position. The National Association of REALTORS would suggest that if your house is priced correctly, you should get one offer for every ten showings. In a normal market you should get 1 to 2 showings per week.

If you do not get any showings, the market is talking and you may need to adjust your price. Additionally, if you have multiple showings and no offers, that is the same as no showings no offers and you need to take a look at the price again. If you have questions about Tulsa area real estate or need the most up-to-date Real Estate news on Shadow Ridge contact amy@darrylbaskin.com or go to http://www.darrylbaskin.com/

The Sub Prime Market is Sliding Downhill

What are sub-prime mortgages? Sub-prime loans are riskier loans in that they are made to borrowers unable to qualify under traditional, more stringent criteria due to a limited or blemished credit history. Sub-prime borrowers are generally defined as individuals with limited income or having FICO credit scores below 620 on a scale that ranges from 300 to 850. Sub-prime loans have a much higher rate of default than prime loans and are priced based on the risk assumed by the lender.

Many buyers and sellers in the Tulsa housing market should be asking that question, and all should be wondering how it could affect sales in this area. Typically, sub-prime customers are those who do not qualify for prime market rates because of a blemished or limited credit history. Sub-prime customers are therefore charged a higher interest rate to compensate for the increased probability of future default. There are deals on the table right now in our area that may not close because of the problems seen recently in the sub-prime market. We have buyers that were "approved" last month for a purchase money mortgage, but many of the lenders that had approved the mortgages have suddenly closed their doors and are in the process of going bankrupt. This has left both sellers and buyers all across the nation who are unable to close on the sale or purchase of their home. The Tulsa area economy has been stable since the mid 80s, when businesses were forced to diversify and bring new jobs to our area. There may be some buyers unable to purchase a home for a while due to credit issues and the quickly changing landscape of the mortgage industry. It is my opinion that we live in a region that will not feel the impact of these changes as severely as east and west coast cities and towns, where people were given loans that have accelerating interest rates and increasing payments that eventually will lead them to foreclosure. Should this happen in our area, it could negatively impact values.

According to the 2001 Expanded Guidance for Sub-prime Lending Programs, a sub-prime loan refers to "... the credit characteristics of individual borrowers. Sub-prime borrowers typically have weakened credit histories that include payment delinquencies and possibly more severe problems such as charge-offs, judgments, and bankruptcies. They may also display reduced repayment capacity as measured by credit scores, debt-to-income ratios, or other criteria that may encompass borrowers with incomplete credit histories. Sub-prime loans are loans to borrowers displaying one or more of these characteristics at the time of origination or purchase. Such loans have a higher risk of default than loans to prime borrowers." One of the reasons for lending to sub-prime borrowers is that, besides their profit potential, banks are obligated by law to offer lending services to clients of all income and credit levels. The Community Reinvestment Act, passed by Congress in 1977 requires that insured financial institutions such as commercial banks offer equal access to lending to all those in an institution's geographic assessment area. Before passage of the CRA, many lenders excluded low-income neighborhoods from their lending products. Many lenders not affiliated with banks have also been tightening their standards. The trend picked up after government-sponsored mortgage financier Freddie Mac said on February 27 that it would no longer buy high-risk mortgages. Ben Bernanke, the chief at the Federal Reserve is also urging Congress to boost regulation of Freddie Mac and its government sponsored counterpart, Fannie Mae.

For more information about this topic or other mortgage related questions, please contact mortgage expert Jeff Sargent of Pinnacle Mortgage Corp/a division of ONB bank @ 918.481.6833.

The government can't regulate independent lenders, but lenders will continue to tighten standards anyway over the next year to cauterize their losses, Plesser says. "In general lenders are being much more careful."