Mortgage Market Share Report – June 2014

I am almost always surprised when I compile our quarterly statistical reports. This quarter is no exception. I already knew that the overall sale market in Monroe County is down around 8% to 10% from 2013 according to the number of recorded deeds that we post to our data base. (page 16) After compiling data from the Indiana Department of Local Government Finance Sales Disclosure Data base for the first half of 2014 I now know why. The charts on pages 14 and 15 show the number of sales disclosures by quarter for sales designated as the buyer?s primary residence (page 14) and those that are not designated in that manner (page 15).

Sales of properties that the buyers intend to live are up slightly over 2013?about 2%. Close to my own expectations for the overall market when I projected 2014 for our company. However, properties not so designated, which are almost exclusively sales of investment, commercial and some vacant land properties are down a surprising 22%!

We?ve all heard noise from various sources about the increasingly difficult mortgage qualification process. It looks to me that in Monroe County that might only be affecting investors and not home buyers. The number of foreclosures (page 19) continues to be moderate, so their effect is unchanged. It could also be that price increases as the market recovers is reducing the number of good deals for investors.

I included a chart from our annual report that shows recorded deeds by year since 2004 (page 17). I continue to wonder what a ?normal? market will look like. The peak of this chart is the 2004-2007 era?also known at the age of irresponsible lending and borrowing. Sub-prime lending clearly inflated property sales in Monroe County, just as it did almost everywhere else. Sales in 2008 and 2009 were juiced by federal homebuyer tax credits. Things bottomed out in 2010 and 2011, before starting to recover.

I had thought that somewhere around 2400 to 2500 sales transactions would be where normal lies. Now I?m not so sure. Deed recording in the second half of this year will have to be up over eight percent over 2013 just to have equal full year comparisons. With stricter financing rules, less homebuilding and the economy not adding a lot of jobs, 2200 sales might be our new normal. Quite a far cry from the subprime golden era, don?t you think?

~John Bethell