Chattanooga News 11/22/08
Chattanooga News
On July 15, 2008 - Volkswagen Group of America, Inc. announced that it will build a U.S. automotive production facility in Chattanooga, Tenn., where it will produce a car designed specifically for the North American consumer and invest $1 billion in the economy.
Erlanger Hospital in Chattanooga Names Top 100 for Heart Care
Press Release by Erlanger Public Relations on November 21st, 2008
The annual study - 2008 Thomson Reuters 100 Top Hospitals(r): Cardiovascular Benchmarks for Success - examined the performance of 970 hospitals by analyzing clinical outcomes for patients diagnosed with heart failure and heart attacks and for those who received coronary bypass surgery and angioplasties. The 2008 winners were announced on November 17 in Modern Healthcare magazine.
"These hospitals provide enormous value to their communities because heart disease is still the nation's number one killer. They have set the new national standard for cardiovascular disease outcomes, process of care, efficiency, and lower costs," said Jean Chenoweth, senior vice president for performance improvement and 100 Top Hospitals programs in the Healthcare business of Thomson Reuters.
The study, in its tenth year, found that the 100 Top Hospitals cardiovascular award winners, as a group, performed 63 percent more bypass surgeries and 42 percent more angioplasties than peer hospitals. This may suggest that performance by bypass surgery is increasingly performed in centers of excellence.
While the average mortality rate for cardiovascular patients is very low (3.4 percent), the mortality rate for bypass surgery was 26 percent lower in the 100 Top Hospitals cardiovascular winners. The award-winning hospitals demonstrated higher performance on the evidence-based core measures published by the Centers for Medicare and Medicaid Services and cost $1,542 less per case, on average.
"This achievement is in recognition of the dedicated services of our physicians and staff," said Erlanger President and CEO, Jim Brexler. "We have had a very strong commitment to continuous improvement and the use of metrics, working to best practices and benchmarking ourselves," he added, noting that "Erlanger publishes all of its quality data on its website and this transparency helps keep the Erlanger team focused."
The 100 Top Hospitals study focused on short-term, acute care, non-federal U.S. hospitals that treat a broad spectrum of cardiology patients. Thomson Reuters researchers analyzed 2006 and 2007 Medicare Provider Analysis and Review (MedPAR) data, 2007 Medicare cost reports, and data from other sources. They scored hospitals in key performance areas: risk-adjusted medical mortality, risk-adjusted surgical mortality, risk-adjusted complications, core measures score, percentage of coronary bypass patients with internal mammary artery use, procedure volume, severity-adjusted average length of stay, and wage- and severity-adjusted average cost.
The measures were calculated for three classes of hospitals with the following number of winners in each:
- Teaching with cardiovascular residency programs, 30 winners
- Teaching without cardiovascular residency programs, 40 winners
- Community, 30 winners
Since performing the region's first open heart surgery in 1960, Erlanger's Heart and Vascular Center has become the region's leader in complete cardiac care. Erlanger offers the latest technology for diagnosing and
treating heart diseases, including a full range of diagnostic testing. Our services address the needs of adults, as well as children, working with the pediatric cardiologists at T.C. Thompson Children's Hospital, the region's only hospital dedicated for the care of children.
Chattanooga: BB&T state chief envisions further growth in area
Written by Amy Williams in the Chattanooga Times Free Press on November 22nd, 2008
While many other banks are contracting, North Carolina-based BB&T bank is growing and could add another branch here late next year, according to Martha S. “Missy” Wallen, the bank’s state president.
“Chattanooga is a market in which we have placed our focus for growth,” said Mrs. Wallen, who in Knoxville is responsible for 72 offices and almost 1,000 people in Tennessee and parts of Georgia, Virginia and North Carolina.
BB&T officials have their eye on properties in Hixson where they could open a branch, she said. Because of the current economic conditions, they will move cautiously.
The bank recently opened a branch at Hamilton Place and on Dec. 3, the bank will celebrate the grand opening of a new facility at 9238 Lee Highway in Ooltewah. That new facility will replace its previous location about a block away.
BB&T Corp., based in Winston-Salem, N.C., is set to receive an infusion of $3.1 billion through the federal government’s Troubled Asset Recovery Program. Bank officials are analyzing what best to do with those funds to get the best return. When the first nine banks were issued $125 billion, the precedent was set that if a bank is healthy, it could apply and receive funds from TARP, Mrs. Wallen said.
“(TARP funds) could give us additional ability to look at opportunities in this environment to help the economy get started again,” she said. “We certainly have great performance relative to our peers, so we wanted to say, ‘We’re one of the healthiest banks, we can get this money.’”
George Korda with Korda Communications traveled with Mrs. Wallen from Knoxville. He said that despite reports that credit is tight in the banking industry, BB&T is extending credit and is on a path for good growth.
The bank had 20 percent loan growth from 2007 to 2008 in the local market and 33 percent deposit growth, Mrs. Wallen said.
“In this challenging economy that is certainly, I think impressive, and speaks very well of Chattanooga and how important this market is for us,” she said. “If we’ve had this kind of growth in the last year, what can we expect, particularly with Volkswagen coming into the market, in 2009 and 2010?”
Tennessee has fared well compared to other markets where BB&T has a presence, including Atlanta; Orlando, Fla.; and Washington, D.C., because the economy here has avoided the extreme highs and lows in housing values of other cities, she said.
Mrs. Wallen said she had not yet decided how successful she expects a second federal stimulus package would be.
“I don’t think the first stimulus package did a lot to get things moving,” she said.
Written by Holly Leder in the Chattanooga Times Free Press on November 22nd, 2008
Mr. Fults said he’d been at home on the evening of Oct. 25 when he was seized by the urge to go out and buy a Powerball ticket — something he’d done on and off for 10 years. Hours later, he learned that he’d won $400,000.
He considers it a divine intervention.
“I’ve been praying for a long time for the money to buy a church,” said Mr. Fults, a nondenominational minister. “A lot of people think I’m probably crazy, but I believe in God and I trust in God. He told me to go buy a lottery ticket.”
Mr. Fults used $78,000 to help acquire the Three Crosses of the Calvary Church in Beersheba Springs, Tenn., a purchase that members have pledged to support.
He also used some of the money to assist community members in need, such as a woman who needed dental work, Mr. Fults said.
“He is a person who walks his talk,” said Howell Adams, a friend of Mr. Fults and his wife, Nola. He said the couple are caretakers of his Beersheba Springs home.
“He’s strong as he can be, but he’s also very gentle. He has the trust of everybody in the community,” Mr. Adams said.
Mr. Fults said he plans to use all the money to help others and further his ministry. He has invested $200,000 to help grow the nest egg so he can assist more people in need.
Despite his good intentions, however, he said some people have denounced his win, saying that any form of gambling is sinful.
“Some people said the church (building) is from the devil,” he said. “If you think it’s wrong, you can say what you want to. It (doesn’t) bother me any. I do believe that this money came from God.”
Bruce Wooley, minister at Brainerd Church of Christ in Chattanooga, said most Christians might have a negative view, but the Bible does not address the issue of gambling directly.
“I don’t know that there’s anything inherently wrong with playing the lottery, for example,” he said. “When people take money that they should be using for other things, that becomes a problem.”
Mr. Fults said he hasn’t changed and hasn’t spent any of his winnings on “stupid stuff.”
He said he plans to continue working as a carpenter and has no plans to buy the house he and his wife rent.
Any gambling, he said, has been limited to $2 Powerball tickets, purchased with money left over after all bills are paid, food is bought and money given to the church.
“I don’t gamble with cards or dice or any of that stuff,” he said. “I think if you spend money for your food (on lottery tickets), then it’s wrong.”
Fannie May to Suspend Foreclosures Until January 2009 While Streamlined Modification Program Implemented
Press Release by Fannie May on November 22nd, 2008
WASHINGTON, DC -- In order to support the streamlined modification program announced on November 11, 2008, Fannie Mae (NYSE:FNM) today issued a notice to its loan servicing organizations and retained foreclosure attorneys directing them to suspend foreclosure sales on occupied single-family properties as well as the completion of evictions from occupied single-family properties scheduled to occur from November 26, 2008 until January 9, 2009.
The temporary suspension of foreclosures is designed to allow affected borrowers facing foreclosure to retain their homes while Fannie Mae works with mortgage servicers to implement the streamlined modification program scheduled to launch December 15. Foreclosure attorneys and loan servicers will be instructed to use the additional time to reach out to borrowers who have defaulted on their loans and continue to pursue workout options. The initiative applies to loans owned or securitized by Fannie Mae.
The streamlined modification program is aimed at the highest risk borrower who has missed three payments or more, owns and occupies the primary residence, and has not filed for bankruptcy. The program creates a fast-track method for getting troubled borrowers into an affordable monthly payment through a mix of reducing the mortgage interest rate, extending the life of the loan or even deferring payments on part of the principal. Servicers have flexibility in the approach, but the objective is to create a more affordable payment for borrowers at risk of foreclosure.
"The streamlined modification program by Fannie Mae, Freddie Mac, Hope Now and 27 mortgage servicers is an important step forward in addressing the systemic issues driving the increase in foreclosures," said Fannie Mae President and Chief Executive Officer Herb Allison. "Until the streamlined modification program is fully implemented, we felt it was in the best interest of both borrowers and Fannie Mae to take this extra step to ensure that homeowners with the desire and ability to prevent a foreclosure have an opportunity to stay in their homes. We encourage other servicers of non-GSE mortgages to participate in the streamlined modification program to bolster our collective efforts to stem the foreclosure crisis."
Fannie Mae will be working with foreclosure attorneys and servicers to reach out to the more than 10,000 borrowers the company estimates would be affected during this period. Borrowers who have Fannie Mae loans that are scheduled for foreclosure between November 26, 2008 and January 9, 2009, will be contacted directly by the attorney handling the foreclosure. If the home is occupied, Fannie Mae has instructed servicers and attorneys to suspend the foreclosure.
Allison also said Fannie Mae's loan servicers are prepared to work with borrowers during this period, even if previous workout efforts have been unsuccessful. As part of the company's "Second Look" initiative, Fannie Mae personnel have been reviewing seriously delinquent loans to determine if the borrower has been contacted and all workout options have been exhausted.
The streamlined modification program and temporary suspension of foreclosures are two of a series of steps Fannie Mae has taken to expand its foreclosure prevention efforts, which are designed to give loan servicers and foreclosure attorneys tools to find the best solution for a borrower in financial trouble. Fannie Mae and its many partners in the housing industry urge borrowers in financial difficulty to reach out to their loan servicers, regardless of whether they are facing imminent foreclosure. Solutions may be available that could make an existing mortgage more affordable.
"Fannie Mae is committed to working with FHFA to implement the streamlined modification program as quickly as possible to help prevent unnecessary foreclosures," Allison said. "We must and will do more."
Existing-Home Sales Rise on Improved Affordability
Fannie Mae To Suspend Foreclosures Until January 2009 While Streamlined Modification Program is Implemented
Written by the National Association of Realtos October 24th, 2008
Existing-home sales increased last month as buyers responded to improved housing affordability conditions, according to the National Association of Realtors®.
Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 5.5 percent to a seasonally adjusted annual rate¹ of 5.18 million units in September from a level of 4.91 million in August, and are 1.4 percent higher than the 5.11 million-unit pace in September 2007.
Lawrence Yun, NAR chief economist, said more markets are seeing year-over-year gains. “The sales turnaround which began in California several months ago is broadening now to Colorado, Kansas, Minnesota, Missouri and Rhode Island,” he said. “The South was hampered by much lower home sales in Houston in the aftermath of Hurricane Ike.”
NAR President Richard F. Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said low home prices and low interest rates have been attracting buyers. “This is the first time since November 2005 that home sales have been above year-ago levels,” he said. “Credit tightened at the end of September, but the improvement demonstrates that buyers who’ve been on the sidelines want to get into the market to make a long-term investment in their future.”
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 6.04 percent in September from 6.48 percent in August; the rate was 6.38 percent in September 2007.
Yun said there may be market disruptions. “The credit markets are not settled yet, although the mortgage market stabilized with the government takeover of Fannie Mae and Freddie Mac. Inventory remains high, and price declines are pressuring owners,” he said. “Additional housing stimulus would stabilize prices more quickly, which in turn would bring faster stability to Wall Street. Removing the repayment feature on the first-time buyer tax credit and permanently raising loan limits would bring more buyers into the market and further reduce inventory.”
Total housing inventory at the end of September fell 1.6 percent to 4.27 million existing homes available for sale, which represents a 9.9-month supply² at the current sales pace, down from a 10.6-month supply in August. This marks two consecutive monthly declines since inventories peaked in July.
The national median existing-home price3 for all housing types was $191,600 in September, down 9.0 percent from a year ago when the median was $210,500. “Compared to a fairly small share of foreclosures or short sales a year ago, distressed sales are currently 35 to 40 percent of transactions. These are pulling the median price down because many are being sold at discounted prices,” Yun explained. “The current market is not being dominated by speculative investors. Rather, 80 percent of current buyers are purchasing a primary residence, which is a bit higher than historic norms.”
Single-family home sales increased 6.2 percent to a seasonally adjusted annual rate of 4.62 million in September from a pace of 4.35 million in August, and are 3.8 percent above the 4.45 million-unit level a year ago. The median existing single-family home price was $190,600 in September, which is 8.6 percent below September 2007.
Existing condominium and co-op sales were unchanged at a seasonally adjusted annual rate of 560,000 units in September, but are 15.7 percent below the 664,000-unit pace in September 2007. The median existing condo price4 was $199,400 in September, down 10.2 percent from a year ago.
Regionally, existing-home sales in the West jumped 16.8 percent to an annual rate of 1.25 million in September, and are 34.4 percent higher than September 2007. The median price in the West was $253,600, down 18.5 percent from a year ago.
In the Midwest, existing-home sales increased 4.4 percent to an annual pace of 1.19 million in September, but are 2.5 percent below a year ago. The median price in the Midwest was $152,500, which is 7.9 percent lower than September 2007.
Existing-home sales in the South rose 2.2 percent in September to a pace of 1.90 million but remain 7.8 percent below September 2007. The median price in the South was $167,200, down 4.1 percent from a year ago.
In the Northeast, existing-home sales slipped 1.2 percent to an annual pace of 840,000 in September, and are 7.7 percent lower than a year ago. The median price in the Northeast was $246,800, down 5.4 percent from September 2007.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.
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NOTE: References to performance in states or metro areas are from unpublished raw data used to analyze regional trends; please contact your local association of Realtors® for more information.
¹The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.
Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings. This differs from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which generally account for 85 percent of total home sales, are based on a much larger sample – more than 40 percent of multiple listing service data each month – and typically are not subject to large prior-month revisions.
²Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982. Condos were tracked quarterly prior to 1999 when single-family homes accounted for more than nine out of 10 purchases.
³The only valid comparisons for median prices are with the same period a year earlier due to the seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if more data is received than was originally reported.
4Because there is a concentration of condos in high-cost metro areas, the national median condo price can be higher than the median single-family price. In a given market area, condos typically cost less than single-family homes.
Existing-home sales for October will be released November 24, and the next Pending Home Sales Index & Forecast is scheduled for release at 11:30 a.m. EST November 7 at NAR’s annual convention in Orlando, Fla. For more information visit: www.realtor.org/research/research/ehsdata
Herman Walldorf & Co Realtors Sales up 14% & Historic Perspective on the Financial Markets
Written by Charlie Walldorf October 17th, 2008
We at Herman Walldorf & Company, Realtors, want to supply the attached information to say “not all is gloom and doom” but that, at least in the Chattanooga metropolitan area, good things are happening.
Our residential sales volume January through September 2008 is 14% above the same 9 months period in 2007. Walldorf’s average residential sales price for the sales to date this year is $252,000 vs $202,000 for the first nine months of 2007. Comparing the month of September sales for 2008, we are up 300% over the same month last year!
We are proud of and salute those hard working Walldorf agents for 2008.
We believe in Chattanooga that our real estate market has held its value well. With the advent of the new Volkswagen plant’s opening production in 2010, its 2,000 new jobs and some 14,000 ancillary jobs, we feel the Chattanooga area residential real estate market has bottomed out and can do nothing but appreciate.
Yes, we are a part of the national economy which will have effect on our local economy, but we have so far weathered the storm pretty well. We are seeing slow downs and unemployment rising, but the national economy is cyclical. We have endured many recessions and even interest rates into the low 20% range during the Jimmy Carter years and yet our economy came back and grew. We are a resilient, creative nation. For the most part, your long term equity in residential real estate in the Chattanooga area market has remained in tact and grown. We are optimistic that will continue as we weather this present storm and are constantly hearing the stock market is at its low point.
Our banks are flush with money to lend to those who have good credit scores and appropriate income history. Interest rates are low and it’s a good time to buy a home.
Our boutique real estate agency of veteran professionals, having an average of 18 years experience each, has been selling real estate in the consistently progressing Chattanooga and North Georgia market for over 81 years. The present mood and feel of the local economy is upbeat, positive and progressive. Supply in homes and condominiums is exceptional compared to the rest of the country. Chattanooga feels good about itself and it shows all over town. Because of our reasonable average sales prices, the incredible beauty of this mountain/valley/river location, low property taxes and lack of state income taxes, the market for those out-of-the-area buyers remains alright as well as there being good local demand. Many Floridians have found a new home in our area.
First Changes Appear in Home Buying Rules
Written by Jason Reynolds in the Chattanooga Times Free Press on October 31st, 2008
The home financing landscape will start to change for some buyers on Oct. 1 with tighter restrictions on down payments, but there still are options, some experts say.
The federal government is abolishing programs such as AmeriDream In
c., which allows sellers to make a buyer’s down payment on government-backed loans, said Cheryl Whitehead-Parrish, branch manager of Freedom Mortgage in Chattanooga.
“The theory is that the less money you put in, the more likely it will foreclose,” Mrs. Whitehead-Parrish said. “With them putting money in, they’re less likely to walk away.”
That is the first of several changes on the way, she said. On Jan. 1, the minimum down payment on a government-backed loan will change from 3 percent to 3.5 percent.
DOWN PAYMENT ASSISTANCE
Several programs are available to help with down payments:
* Tennessee Housing Development Agency — Offers low interest rates and down payments based on income.
* U.S. Department of Housing and Urban Development — You can buy a house that was foreclosed by putting down as little as $100 plus earnest money.
* Fannie Mae — The ExpressPath program provides up to 100 percent financing on a foreclosed house.
* Chattanooga Neighborhood Enterprise — The Second Mortgage Program provides down payment help for people buying a house in the city limits.
Sources: THDA; ReMax agent Brandi Thompson; Crye-Leike agent Cindy Walker; CNE Web site
In October 2009, the rate for private mortgage insurance will rise from 1.5 percent to 1.75 percent. PMI typically is required when the down payment is less than 20 percent of the sales price or appraised value, which protects the lender against borrower default.
One Realtor predicts the stricter rules will be a boon for the rental market.
“There will be a larger rental market if the first-time buyer can’t buy right away,” said Nathan Walldorf of Herman Walldorf & Co. Realtors. First-time buyers may have a harder time affording a house until they save up a down payment, he said, but help is still available such as through the Tennessee Housing Development Agency.
THDA targets low- to moderate-income first-time buyers, said Patricia Smith, public affairs director. The agency offers 30-year fixed loans with rates between 5.8 percent to 6.8 percent as well as down payment assistance.
The U.S. Department of Housing and Urban Development allows a person to buy a foreclosed home with $100 down plus earnest money, said Brandi Thompson, an agent with ReMax Properties North. There is no income restriction, but the buyer must live in the house for at least a year.
Buyers of some homes foreclosed by Fannie Mae can qualify to borrow up to 100 percent of the properties’ value, said Cindy Walker, director of Crye-Leike Realtors’ foreclosure division. The ExpressPath program does not require private mortgage insurance, she said.
Also effective on Oct. 1, THDA will be able to refinance loans for the first time, Ms. Smith said. Loans insured by the Federal Housing Administration or through PMI will qualify for THDA’s lower interest rates, she said.
Regardless of what program a buyer uses, a good credit score helps, said Terre Webb of Mortgage Investors Group. A credit score of 720 or higher will ensure the best interest rate, she said, while FHA loans need at least a score of 620.
Even though seller assistance programs are going away, buyers can still receive a down payment gift from a family member, Ms. Webb said.
Chattanooga: Job seekers flock to VW expo
Written by Mike Pare in the Chattanooga Times Free Press on November 21st, 2008
Job seekers from the Chattanooga area turned out in throngs Thursday in hopes of landing a post with German automaker Volkswagen.
“We didn’t expect so many,” said Frank Fischer, the manager of the new plant that is going up at Enterprise South industrial park, at a VW career and supplier expo.
Chattanooga Mayor Ron Littlefield said he was “blown away” by the numbers, which a VW official estimated at between 2,000 and 2,500 people.
“This is just fantastic,” he said.
Inside the Chattanooga Convention Center, people waited in lines 30 to 40 deep for a chance to apply for the professional and administrative positions.
FACT BOX
Volkswagen’s Chattanooga assembly plant will be the company’s 52nd facility worldwide when it is complete by early 2011, according to VW.
One hopeful, Robert McGowan of Chattanooga, said the city hasn’t had something as big as VW in his lifetime.
“I want to be a part of it,” said Mr. McGowan, who has a job in the trucking industry but wants to join the car maker in a human resources capacity.
Emily Jones of Chattanooga, eyeing a post in administrative support or finance, noted that VW is an international company and may have more stability than others.
“The way the economy is, it’s a bigger base,” she said as she waited in a line to gather more information.
Hamilton County Mayor Claude Ramsey termed VW “a good company” for which people want to work. He also said the national economic downturn has come into play.
“It’s in relation to the economy,” Mr. Ramsey said about the crowd.
Jonathan Reed of Chattanooga said he recently was laid off from his job and is eager to fill a quality control slot.
“It’s a company that pays pretty well and gives longevity,” said the 27-year-old man.
Alvis Ray Rich of Rossville said he is employed, but hoping to move into a position with VW. He said he has worked for a similar company, bus maker Blue Bird Corp. in LaFayette, Ga., for about 18 months.
People intent on visiting the VW expo were circling the block looking for empty parking spaces Thursday afternoon. Inside, persons representing local companies wanting to supply goods or services to VW waited to get into seminars about the process. Others, resumes in hand, stood in lines to try to get an inside track to secure a position.
According to VW, the jobs are expected to pay from between $40,000 to $70,000 annually.
But, it will likely be three to six months before much of the hiring takes place for the posts advertised Thursday. Mr. Fischer said it is uncertain how many of those positions will be filled and he declined to estimate a number.
The plant manager said VW will hold future job fairs for other posts, including those who will actually build the cars.
VW expects to hire about 2,000 people for its Chattanooga plant at Enterprise South industrial park. The plant is expected to produce about 150,000 vehicles when it starts operations by early 2011.
In September, VW held a vendor fair for minority business people and hundreds showed up with the aim of supplying the car company. The company is planning more vendor fairs in the next few months as it ramps up operations.
VW wants 10 percent of its plant construction to be placed with minority suppliers when production starts. Also, the company is aiming by 2011 for 5 percent of components to come from minority outfits. By 2015, that is to be up to 10 percent, according to VW.
Existing-home sales increased last month as buyers responded to improved housing affordability conditions, according to the National Association of Realtors®.
Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 5.5 percent to a seasonally adjusted annual rate¹ of 5.18 million units in September from a level of 4.91 million in August, and are 1.4 percent higher than the 5.11 million-unit pace in September 2007.
Lawrence Yun, NAR chief economist, said more markets are seeing year-over-year gains. “The sales turnaround which began in California several months ago is broadening now to Colorado, Kansas, Minnesota, Missouri and Rhode Island,” he said. “The South was hampered by much lower home sales in Houston in the aftermath of Hurricane Ike.”
NAR President Richard F. Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said low home prices and low interest rates have been attracting buyers. “This is the first time since November 2005 that home sales have been above year-ago levels,” he said. “Credit tightened at the end of September, but the improvement demonstrates that buyers who’ve been on the sidelines want to get into the market to make a long-term investment in their future.”
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 6.04 percent in September from 6.48 percent in August; the rate was 6.38 percent in September 2007.
Yun said there may be market disruptions. “The credit markets are not settled yet, although the mortgage market stabilized with the government takeover of Fannie Mae and Freddie Mac. Inventory remains high, and price declines are pressuring owners,” he said. “Additional housing stimulus would stabilize prices more quickly, which in turn would bring faster stability to Wall Street. Removing the repayment feature on the first-time buyer tax credit and permanently raising loan limits would bring more buyers into the market and further reduce inventory.”
Total housing inventory at the end of September fell 1.6 percent to 4.27 million existing homes available for sale, which represents a 9.9-month supply² at the current sales pace, down from a 10.6-month supply in August. This marks two consecutive monthly declines since inventories peaked in July.
The national median existing-home price3 for all housing types was $191,600 in September, down 9.0 percent from a year ago when the median was $210,500. “Compared to a fairly small share of foreclosures or short sales a year ago, distressed sales are currently 35 to 40 percent of transactions. These are pulling the median price down because many are being sold at discounted prices,” Yun explained. “The current market is not being dominated by speculative investors. Rather, 80 percent of current buyers are purchasing a primary residence, which is a bit higher than historic norms.”
Single-family home sales increased 6.2 percent to a seasonally adjusted annual rate of 4.62 million in September from a pace of 4.35 million in August, and are 3.8 percent above the 4.45 million-unit level a year ago. The median existing single-family home price was $190,600 in September, which is 8.6 percent below September 2007.
Existing condominium and co-op sales were unchanged at a seasonally adjusted annual rate of 560,000 units in September, but are 15.7 percent below the 664,000-unit pace in September 2007. The median existing condo price4 was $199,400 in September, down 10.2 percent from a year ago.
Regionally, existing-home sales in the West jumped 16.8 percent to an annual rate of 1.25 million in September, and are 34.4 percent higher than September 2007. The median price in the West was $253,600, down 18.5 percent from a year ago.
In the Midwest, existing-home sales increased 4.4 percent to an annual pace of 1.19 million in September, but are 2.5 percent below a year ago. The median price in the Midwest was $152,500, which is 7.9 percent lower than September 2007.
Existing-home sales in the South rose 2.2 percent in September to a pace of 1.90 million but remain 7.8 percent below September 2007. The median price in the South was $167,200, down 4.1 percent from a year ago.
In the Northeast, existing-home sales slipped 1.2 percent to an annual pace of 840,000 in September, and are 7.7 percent lower than a year ago. The median price in the Northeast was $246,800, down 5.4 percent from September 2007.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.
# # #
NOTE: References to performance in states or metro areas are from unpublished raw data used to analyze regional trends; please contact your local association of Realtors® for more information.
¹The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.
Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings. This differs from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which generally account for 85 percent of total home sales, are based on a much larger sample – more than 40 percent of multiple listing service data each month – and typically are not subject to large prior-month revisions.
²Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982. Condos were tracked quarterly prior to 1999 when single-family homes accounted for more than nine out of 10 purchases.
³The only valid comparisons for median prices are with the same period a year earlier due to the seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if more data is received than was originally reported.
4Because there is a concentration of condos in high-cost metro areas, the national median condo price can be higher than the median single-family price. In a given market area, condos typically cost less than single-family homes.
Existing-home sales for October will be released November 24, and the next Pending Home Sales Index & Forecast is scheduled for release at 11:30 a.m. EST November 7 at NAR’s annual convention in Orlando, Fla. For more information visit: www.realtor.org/research/research/ehsdata
Herman Walldorf & Co Realtors Sales up 14% & Historic Perspective on the Financial Markets
Written by Charlie Walldorf October 17th, 2008
We at Herman Walldorf & Company, Realtors, want to supply the attached information to say “not all is gloom and doom” but that, at least in the Chattanooga metropolitan area, good things are happening.
Our residential sales volume January through September 2008 is 14% above the same 9 months period in 2007. Walldorf’s average residential sales price for the sales to date this year is $252,000 vs $202,000 for the first nine months of 2007. Comparing the month of September sales for 2008, we are up 300% over the same month last year!
We are proud of and salute those hard working Walldorf agents for 2008.
We believe in Chattanooga that our real estate market has held its value well. With the advent of the new Volkswagen plant’s opening production in 2010, its 2,000 new jobs and some 14,000 ancillary jobs, we feel the Chattanooga area residential real estate market has bottomed out and can do nothing but appreciate.
Yes, we are a part of the national economy which will have effect on our local economy, but we have so far weathered the storm pretty well. We are seeing slow downs and unemployment rising, but the national economy is cyclical. We have endured many recessions and even interest rates into the low 20% range during the Jimmy Carter years and yet our economy came back and grew. We are a resilient, creative nation. For the most part, your long term equity in residential real estate in the Chattanooga area market has remained in tact and grown. We are optimistic that will continue as we weather this present storm and are constantly hearing the stock market is at its low point.
Our banks are flush with money to lend to those who have good credit scores and appropriate income history. Interest rates are low and it’s a good time to buy a home.
Our boutique real estate agency of veteran professionals, having an average of 18 years experience each, has been selling real estate in the consistently progressing Chattanooga and North Georgia market for over 81 years. The present mood and feel of the local economy is upbeat, positive and progressive. Supply in homes and condominiums is exceptional compared to the rest of the country. Chattanooga feels good about itself and it shows all over town. Because of our reasonable average sales prices, the incredible beauty of this mountain/valley/river location, low property taxes and lack of state income taxes, the market for those out-of-the-area buyers remains alright as well as there being good local demand. Many Floridians have found a new home in our area.
First Changes Appear in Home Buying Rules
Written by Jason Reynolds in the Chattanooga Times Free Press on October 31st, 2008
The home financing landscape will start to change for some buyers on Oct. 1 with tighter restrictions on down payments, but there still are options, some experts say.
The federal government is abolishing programs such as AmeriDream In
c., which allows sellers to make a buyer’s down payment on government-backed loans, said Cheryl Whitehead-Parrish, branch manager of Freedom Mortgage in Chattanooga.
“The theory is that the less money you put in, the more likely it will foreclose,” Mrs. Whitehead-Parrish said. “With them putting money in, they’re less likely to walk away.”
That is the first of several changes on the way, she said. On Jan. 1, the minimum down payment on a government-backed loan will change from 3 percent to 3.5 percent.
DOWN PAYMENT ASSISTANCE
Several programs are available to help with down payments:
* Tennessee Housing Development Agency — Offers low interest rates and down payments based on income.
* U.S. Department of Housing and Urban Development — You can buy a house that was foreclosed by putting down as little as $100 plus earnest money.
* Fannie Mae — The ExpressPath program provides up to 100 percent financing on a foreclosed house.
* Chattanooga Neighborhood Enterprise — The Second Mortgage Program provides down payment help for people buying a house in the city limits.
Sources: THDA; ReMax agent Brandi Thompson; Crye-Leike agent Cindy Walker; CNE Web site
In October 2009, the rate for private mortgage insurance will rise from 1.5 percent to 1.75 percent. PMI typically is required when the down payment is less than 20 percent of the sales price or appraised value, which protects the lender against borrower default.
One Realtor predicts the stricter rules will be a boon for the rental market.
“There will be a larger rental market if the first-time buyer can’t buy right away,” said Nathan Walldorf of Herman Walldorf & Co. Realtors. First-time buyers may have a harder time affording a house until they save up a down payment, he said, but help is still available such as through the Tennessee Housing Development Agency.
THDA targets low- to moderate-income first-time buyers, said Patricia Smith, public affairs director. The agency offers 30-year fixed loans with rates between 5.8 percent to 6.8 percent as well as down payment assistance.
The U.S. Department of Housing and Urban Development allows a person to buy a foreclosed home with $100 down plus earnest money, said Brandi Thompson, an agent with ReMax Properties North. There is no income restriction, but the buyer must live in the house for at least a year.
Buyers of some homes foreclosed by Fannie Mae can qualify to borrow up to 100 percent of the properties’ value, said Cindy Walker, director of Crye-Leike Realtors’ foreclosure division. The ExpressPath program does not require private mortgage insurance, she said.
Also effective on Oct. 1, THDA will be able to refinance loans for the first time, Ms. Smith said. Loans insured by the Federal Housing Administration or through PMI will qualify for THDA’s lower interest rates, she said.
Regardless of what program a buyer uses, a good credit score helps, said Terre Webb of Mortgage Investors Group. A credit score of 720 or higher will ensure the best interest rate, she said, while FHA loans need at least a score of 620.
Even though seller assistance programs are going away, buyers can still receive a down payment gift from a family member, Ms. Webb said.
Written by Jason Reynolds in the Chattanooga Times Free Press on October 31st, 2008
The home financing landscape will start to change for some buyers on Oct. 1 with tighter restrictions on down payments, but there still are options, some experts say.
The federal government is abolishing programs such as AmeriDream In
c., which allows sellers to make a buyer’s down payment on government-backed loans, said Cheryl Whitehead-Parrish, branch manager of Freedom Mortgage in Chattanooga.
“The theory is that the less money you put in, the more likely it will foreclose,” Mrs. Whitehead-Parrish said. “With them putting money in, they’re less likely to walk away.”
That is the first of several changes on the way, she said. On Jan. 1, the minimum down payment on a government-backed loan will change from 3 percent to 3.5 percent.
DOWN PAYMENT ASSISTANCE
Several programs are available to help with down payments:
* Tennessee Housing Development Agency — Offers low interest rates and down payments based on income.
* U.S. Department of Housing and Urban Development — You can buy a house that was foreclosed by putting down as little as $100 plus earnest money.
* Fannie Mae — The ExpressPath program provides up to 100 percent financing on a foreclosed house.
* Chattanooga Neighborhood Enterprise — The Second Mortgage Program provides down payment help for people buying a house in the city limits.
Sources: THDA; ReMax agent Brandi Thompson; Crye-Leike agent Cindy Walker; CNE Web site
In October 2009, the rate for private mortgage insurance will rise from 1.5 percent to 1.75 percent. PMI typically is required when the down payment is less than 20 percent of the sales price or appraised value, which protects the lender against borrower default.
One Realtor predicts the stricter rules will be a boon for the rental market.
“There will be a larger rental market if the first-time buyer can’t buy right away,” said Nathan Walldorf of Herman Walldorf & Co. Realtors. First-time buyers may have a harder time affording a house until they save up a down payment, he said, but help is still available such as through the Tennessee Housing Development Agency.
THDA targets low- to moderate-income first-time buyers, said Patricia Smith, public affairs director. The agency offers 30-year fixed loans with rates between 5.8 percent to 6.8 percent as well as down payment assistance.
The U.S. Department of Housing and Urban Development allows a person to buy a foreclosed home with $100 down plus earnest money, said Brandi Thompson, an agent with ReMax Properties North. There is no income restriction, but the buyer must live in the house for at least a year.
Buyers of some homes foreclosed by Fannie Mae can qualify to borrow up to 100 percent of the properties’ value, said Cindy Walker, director of Crye-Leike Realtors’ foreclosure division. The ExpressPath program does not require private mortgage insurance, she said.
Also effective on Oct. 1, THDA will be able to refinance loans for the first time, Ms. Smith said. Loans insured by the Federal Housing Administration or through PMI will qualify for THDA’s lower interest rates, she said.
Regardless of what program a buyer uses, a good credit score helps, said Terre Webb of Mortgage Investors Group. A credit score of 720 or higher will ensure the best interest rate, she said, while FHA loans need at least a score of 620.
Even though seller assistance programs are going away, buyers can still receive a down payment gift from a family member, Ms. Webb said.
Chattanooga: Job seekers flock to VW expo
Written by Mike Pare in the Chattanooga Times Free Press on November 21st, 2008
Job seekers from the Chattanooga area turned out in throngs Thursday in hopes of landing a post with German automaker Volkswagen.
“We didn’t expect so many,” said Frank Fischer, the manager of the new plant that is going up at Enterprise South industrial park, at a VW career and supplier expo.
Chattanooga Mayor Ron Littlefield said he was “blown away” by the numbers, which a VW official estimated at between 2,000 and 2,500 people.
“This is just fantastic,” he said.
Inside the Chattanooga Convention Center, people waited in lines 30 to 40 deep for a chance to apply for the professional and administrative positions.
FACT BOX
Volkswagen’s Chattanooga assembly plant will be the company’s 52nd facility worldwide when it is complete by early 2011, according to VW.
One hopeful, Robert McGowan of Chattanooga, said the city hasn’t had something as big as VW in his lifetime.
“I want to be a part of it,” said Mr. McGowan, who has a job in the trucking industry but wants to join the car maker in a human resources capacity.
Emily Jones of Chattanooga, eyeing a post in administrative support or finance, noted that VW is an international company and may have more stability than others.
“The way the economy is, it’s a bigger base,” she said as she waited in a line to gather more information.
Hamilton County Mayor Claude Ramsey termed VW “a good company” for which people want to work. He also said the national economic downturn has come into play.
“It’s in relation to the economy,” Mr. Ramsey said about the crowd.
Jonathan Reed of Chattanooga said he recently was laid off from his job and is eager to fill a quality control slot.
“It’s a company that pays pretty well and gives longevity,” said the 27-year-old man.
Alvis Ray Rich of Rossville said he is employed, but hoping to move into a position with VW. He said he has worked for a similar company, bus maker Blue Bird Corp. in LaFayette, Ga., for about 18 months.
People intent on visiting the VW expo were circling the block looking for empty parking spaces Thursday afternoon. Inside, persons representing local companies wanting to supply goods or services to VW waited to get into seminars about the process. Others, resumes in hand, stood in lines to try to get an inside track to secure a position.
According to VW, the jobs are expected to pay from between $40,000 to $70,000 annually.
But, it will likely be three to six months before much of the hiring takes place for the posts advertised Thursday. Mr. Fischer said it is uncertain how many of those positions will be filled and he declined to estimate a number.
The plant manager said VW will hold future job fairs for other posts, including those who will actually build the cars.
VW expects to hire about 2,000 people for its Chattanooga plant at Enterprise South industrial park. The plant is expected to produce about 150,000 vehicles when it starts operations by early 2011.
In September, VW held a vendor fair for minority business people and hundreds showed up with the aim of supplying the car company. The company is planning more vendor fairs in the next few months as it ramps up operations.
VW wants 10 percent of its plant construction to be placed with minority suppliers when production starts. Also, the company is aiming by 2011 for 5 percent of components to come from minority outfits. By 2015, that is to be up to 10 percent, according to VW.
