Housing slump hasn't hit as hard

SANFORD, Nov 18, 2008 (Sanford Herald - McClatchy-Tribune Information Services via COMTEX) -- CBKN | Quote | Chart | News | PowerRating -- Just a year ago, terms like "subprime lending" and "adjustable rate mortgage" were usually reserved for the vocabularies of mortgage lenders or those buyers with less-than-spotless credit looking for a loan.

But now, with foreclosures mounting daily and lenders seeking assistance from the government for a $700 billion bailout, those terms have found their way into the lexicons of each American, as worries about the failing economy and mounting job losses increase.

The fall of the nation's housing market is seen by many as a prime catalyst for a recent economic downturn that has forecasters breaking out more nefarious terms these days -- words like "recession" and, to the most dire naysayers, "depression."

But how has that fall played out in Lee County?

The simple answer is not so badly.

While many parts of the nation and North Carolina have struggled under a deluge of foreclosures resulting from bad loans, Sanford's housing market -- though it may have declined -- has not suffered near the same fate.

According to the North Carolina Commissioner of Banks office, Lee County has actually seen a 3 percent decrease in the number of foreclosure starts thus far in 2008 as compared to the same time period in 2007. By contrast, nearly every other county in the state, including all those surrounding Lee, have seen significant increases.

The state as a whole is also fairing much better than others, but the problem is on the rise. The number of foreclosures in North Carolina fell 20 percent in October 2007, but were up 30 percent from September 2008. The state ranks 29th in the country in foreclosures, well behind hotspots Nevada, Arizona and Florida.

Fewer home buyers

The slowing economy has made real estate agents' jobs much tougher in Lee County as it has most across the country. Local agent Cindy Ammons of ERA Ammons realty said she has seen a marked decrease in the amount of prospective buyers over just the past year.

"I was a lot busier last year," she said. "It has slowed down quite a bit. People are a lot more skeptical about the economy right now. They are worried about whether they will have a job tomorrow."

Sanford Area Association of Realtors Executive Officer Debbie Key said that the time houses stay on the market in Lee County has increased an average of 30 days since October 2007, pointing to a slowing market. Now it takes an average of 194 days to sell a home here.

"We've definitely had a slowdown," she said, "but not as much as other areas. And foreclosures haven't affected us as much either."

Ammons currently has nine properties listed ranging from $90,000 to $400,000.

"The cheaper houses are still selling," she said. "Anything over $180,000, we are having trouble finding buyers for."

Tough on banks

Bankers are feeling the pinch, too. Celis O'Quinn, mortgage loan officer at a local branch of RBC Centura, said right now is actually a good time to buy a home -- if you have good credit, that is. The days of the subprime mortgage have all but ended, she said, with banks and lenders "going back to basics" when seeking to qualify a candidate in a "common-sense lending" effort.

Still, the borrowers are just not out there right now, she said.

"Mortgage rates are at the lowest point I have seen them in years," she said. "But things have definitely slowed down because people are worried about the economy."

Jerry Ocheltree, CEO of First Bank, which has four branches in Lee County, echoed those sentiments. He said that though North Carolina has "weathered the storm" better than most, the shaky economy and election season has taken its toll.

First Bank and Capital Bank are among several North Carolina chains that plan to seek funds from the bailout package that passed through Congress in September. Ocheltree said though First Bank may not need the infusion of capital that some banks do from the bailout, his company could not turn down the "good source of capital" at a cheap rate.

"The bailout is going to turn out be a good thing in the long run," he said. "It will put money into the system and allow us to leverage more loans."

Ocheltree also said lenders across the industry have tightened their lending practices, though his banks have operated much the same as they did before the crisis.

"At First Bank it is business as usual," he said. "We have never participated in subprime lending."

As for the future, both lenders and sellers expect the economy to improve in 2009. O'Quinn said she thinks the market will turn as early as the spring, a sentiment her colleagues agree with.

"We are in the sixth inning of a nine-inning ball game," Ocheltree said.

And as long as it doesn't go extras, Lee County might just come out on top.

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