From the pages of
Pinedale Roundup
Volume 104, Number 37 - September 13, 2007
brought to you online by Pinedale Online

Experts: Local housing market stable

by Mary Billiter

Despite widespread panic that has gripped the nation with recent fluctuations in the stock market, homeowners in Pinedale have little to worry about.

“It’s in the news that there’s problems in the mortgage industry. It seems to be widespread nationally, but it hasn’t affected us locally,” said Jeff Patterson.

The Branch President of 1st Bank in Pinedale says subprime mortgage loans are being hit the hardest. Subprime mortgage loans are ones that are usually extended to borrowers with weak credit histories. A rising number of defaults of these loans have created national concern that the loan market will destabilize. “For the most part, most home buyers are not having difficulty obtaining a mortgage loan,” reassured Patterson.

1st Bank typically does not offer adjustable-rate mortgage loans, which are being hit hard by the increased interest rate. Adjustable-rate mortgages are scheduled to reset by the end of 2008. Low introductory interest rates that originally entice homeowners will soon rise to higher rates with an estimated 2 million adjustable-rate mortgages scheduled to change.

“We haven’t offered an adjustable-rate loan because it could be detrimental to our customers,” said Patterson, whose forward thinking approach with his clients has kept them out of financial hardship.

The crisis facing many homeowners with adjustable-rate mortgages is that these mortgages are now resetting at higher interest rates that in some cases are causing monthly payments to double or even triple.

“We do have them (adjustable-rate loans) available, but we don’t offer them. For the most part, adjustable is not for everyone. Security in the long term is with a fixed rate,” said Patterson.

Security is crucial in today’s rapidly changing market. “I still feel comfortable about investing in Pinedale because our market is sustainable,” said Patterson, who confronted the criticism that Pinedale is reaping the benefits of the “boom” of the oil and gas industry.

“There is no way to say if we have a bust with 3,000 workers in the oil field that there’d be a bust, or to what extent no one can predict.”

Patterson and his staff safeguard their clients and their investments by offering long-term security in their mortgage loans. “Our borrowers are not in jeopardy of bankruptcy,” said Kimberly Ervin. The Mortgage Specialist at 1st Bank oversees mortgage loans.

“Our portfolio is pretty strong,” said Ervin, who says she is just now beginning to see a cyclical nature in real estate loans. “Spring and summer are stronger. After two strong years, we’re just starting to see a typical real estate market that is sustainable.” Patterson would agree.

“The quote, unquote, ‘Housing slump’ that appears in the news is not occurring here,” he said.

Allen Agency Real Estate Broker and Partner Judy Smith concurred.

“When people ask me about what’s been happening in the news, I want them to know everything is fine. The real estate market is OK.”

Financial lenders experienced the greatest impact. “We had some deals that the lenders had to scramble to find a new lender. The lastminute adjustments only happened with what was under contract during that time,” said Smith.

A 12-year veteran in the Pinedale real estate market, Smith has seen the ebb and flow of the industry.

“I think this summer has been comparable to the last two summers,” said Smith, who drew comparisons to the 1996 market. “If a house was priced right everything on the market sold. That’s when it took off,” said Smith.

Investors saw the ‘96 market as an opportunity to profit from the sale of rental properties. According to Smith, the initial growth in the market was met by a leveling off a year later.

“It cooled, but things still sold.” By 1998, the market slowly climbed again in interest.

“It really hasn’t stopped,” she said, noting, “The market in 2006 was as hot as it was in 1996.”

The rise in real estate led to a surge in brokerages. “I have been asked, ‘How many realtors are in this town?’” said Smith, who shakes her head and smiles. “I don’t count. My satisfaction comes from knowing our phone is ringing, people are coming into our office, and my agents are busy.”

The other question Smith is commonly asked is whether the market has slowed down.

“The other issue is supply and demand. There’s a softening in the vacant building site market because of new subdivisions and spec homes. There’s a high volume there.” Watching the industry trends, Smith isn’t sure if the surge will be a 10-year cycle as it was in 1996. However, she does credit the oil and gas industry as playing a key role in the resurgence.

“The oil and gas business has totally changed our market very positively. A lot of people move here for the mountains, lakes and to retire. Those people have listed and are leaving for Salmon, Idaho to get back to the quiet,” she said.

Projecting forward to a market with less impact from the oil industry, Smith remains optimistic.

“Even when oil and gas starts to slow down, the desire for open space, mountains and lakes will come back. They (buyers) will come back to Pinedale,” she said.

Besides the natural draws of Pinedale, Smith touted the educational opportunities available to families with school-aged children. “My kids came here from Cheyenne and they got a great education. I only wish we had moved here sooner,” she said, adding, “For the size of classes and the quality of instruction they receive, it’s incredible. I see the careers the kids have gone into and we have doctors, lawyers, you name it.”

Together with Smith’s business partner, Jill Tegeler, Allen Agency Real Estate has six agents and an inviting office off Tyler Street that has amassed the majority of listings in Sublette County. Finding your dream homeis within reach. And, according to Smith, money isn’t always the deciding factor.

“The biggest thing I tell buyers is to keep a good credit score,” she said. “You can make all the money in the world but without good credit you won’t get any loan on a house.”

A credit score of 600 or better usuallyqualifies homebuyers for a mortgage loan. If you’re interested in selling your home, the market remains favorable.

“People are still going to make money,” said Smith. “It may not be at the same appreciation factor as it was in 2006, but interest is still strong.”

With six new listings last week, Smith walks the talk. “The market isn’t slowing down.” A glance at Smith’s desk laden with contracts is proof positive that Pinedale remains one of Wyoming’s most desirable destinations. “Things are OK,” she said and points to the foyer. “Every day when people walk in that door it generates business. That’s why we work every day. The market is still strong.”

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