Wednesday, March 4, 2009

Black Swans, Pink Dolphins, & the Making Home Affordable Program for Oklahomans

Okay.  It is out. The Obama administration's plan to help homeowners that are underwater (owe more on their home than what it is worth). Will this plan help Tulsa homeowners?

The Tulsa market (as well as the whole state of Oklahoma) has enjoyed fairly stable appreciation of their home values over time. Most of what we get exposed to in the national press refers to the Case-Shiller Index which studies value change in the largest 10 and largest 20 markets in the entire USA. Unfortuneately, our local media often runs the national report each month without reporting the local data that is so important to our local market. While all mortgages are national (subject for a future post), all real estate is local. Even the data that is presented here from Zillow is for the Tulsa MSA (Metropolitan Statistical Area) as a whole. Individual communities (Jenks, Broken Arrow, Owasso, etc.) and even subdivisions will see some differences from the MSA data, but it provides a good basis for our market in comparison to the national values.

The chart below shows that home values have made responsible, steady growth in the Tulsa MSA over this decade. And, while median owner equity has fallen (partly because new buyers are putting smaller amounts down), the Tulsa, OK MSA is not experiencing the extent of negative owner equity being reported elsewhere in our country.

This graphic shows that there is one area of our market that reports over 10% of homeowners having negative equity, or underwater with their mortgage. As with the data above, we are well below the Case-Shiller numbers as well as the national averages.

So, how will Making Home Affordable plan help Tulsans and other Oklahomans with their mortgages? Fewer than most will be able to take advantage of this program. Given our market conditions we are the black swan or pink dolphin of the nation's real estate condition - a beautiful rarity.

Mortgage rates are still very low and most homeowners in our area can qualify for a great refinance without one of these new programs. If you have any questions about whether or not you could benefit from refinancing, call me for a no-obligation consultation.

Check back later for more details (they still are sketchy) on the program, including the Home Affordable Refinance Program, and what it may be able to do for you and your mortgage here in Tulsa, OK. If you can't wait, you can read the fact sheet.

Tim Epps

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