October 2008 … central TX mortgage observations
– from one of our favorite mortgage voices, David Reed, CD Reed Mortgage Bankers, Austin
Last month was October. You know, the month when banks were taken over, the stock market had its worst month in 21 years? During the same period the Dow had its best single day in 34 years. Banks got bought. AIG went on an expensive picnic. Interest rates all over the map. And do you know what else?
I had a record month in October.
Since I left SouthTrust Bank (who originally bought Partners Mortgage -anyone remember them?-who then got bought by Wachovia who then got bought by Citigroup) in 2004 to venture out on my own I beat my personal best by nearly a million bucks. Okay, my commercial business is doing well but still, my residential stuff also hit a record. And there are some things I’m noticing here in Central Texas.
Buyers are Serious. In this environment, when someone is shopping for a home, they really mean it. I’m not sure if there’s a sense of urgency or their Realtors are doing a great job of creating such but when I speak to prospective buyers they find a home a lot quicker than they used to. If a deal falls through they soon find another.
Buyers are Qualified. I guess they have to be these days but buyers looking for real estate understand what’s going on in the marketplace and are confident of their qualifications. They know before they pick up the phone to call me that they can buy what they’re shopping for. I can remember buyers who would start out the conversation with “I’m going to need a ‘Stated’ loan.” Ugh.
Less Rate Shopping. During the hey-days of alternative loans and below market rate quotes a buyer would typically have a list of three or more mortgage companies they were talking to and having them compete with each other till the bitter end. I think now buyers are happy they can find someone who can offer a mortgage at all.
Less Competition. This might go without saying but quite frankly there are fewer loan officers out there.
I’m no bellwether by any stretch but my core business has always been the conventional and government loan and never veered from that.