Thursday, May 31, 2007


Dyersburg experiencing B-Paper fallout

I promised in my last post to return this week and discuss the current market conditions in Dyersburg area today.

First of all let me say that the national news has been discussing the B-paper mortgage problems. Dyersburg also has its share of those sub prime mortgages going into foreclosure. I get requests almost everyday from lenders to do broker price opinions on houses they have either foreclosed on or preparing to foreclose on. Needless to say, this same lenders have hired either myself or another realtor to market their foreclosures.

Who is the blame for these foreclosures? First of all, many of these purchasers were
not informed of the dangers of these ARM 2/28 loans. The initial interest rate was locked for 2 years then could change up to twice a year(could go up 5 points over course of the loan). So, if the rate started at 9%, two years later it could jump to 11% and later that year go up to 12% then next year go to 13 or 14% interest rate.

Most of the blame should go to the realtors(most are fairly new, poorly trained real estate agents) for allowing "their" clients to fall into these traps. I also blame the mortgage brokers(all of these are out of town or out of business) for arranging these mortgage "deals" and then I blame the purchasers for not choosing to use a reputable proven realtor and reputable lender. A writer at CNN money wrote an article about this problem and I have it over in the right column titled "CNN article on B-paper collapse"

So now you ask, "How is that affecting the overall Dyersburg market"?
We are definately starting to feel a general slowdown in home sales as a direct result of all these foreclosures. With all the new foreclosure inventory hitting the market and all the existing inventory(from $45,000-$85,000) there are fewer buyers out there that can qualify for a good mortgage(conforming loan) For the last 3-4 years the market in the lower price ranges(up to about $85,000) has been really good but was driven in large part by the buyers getting the easy to qualify for B-paper loans. Many of these lenders are either in bankrupcy themselves or going out of business.

The only price range that I see little affect on so far is $100,000-$150,000

So, with all this inventory of lower priced homes, these potential local home sellers cannot sell their homes to move up into the higher priced range homes. This in turn reduces the demand for the higher priced homes.

I get about 70% of my new business from people moving in from out of state and the other 30% from local people. My local purchasers have started to slow down because they cannot sell their homes.

Up until about 6 months ago it was a sellers market but has tipped toward the buyers now.
If Dyersburg was not in this growth mode(I have talked about in previous posts), we would be in the same shape as other areas of the country.

I had a long discussion with an appraiser yesterday and we decided that if you buy a home priced in the middle of the price range for that neighborhood then you will be ok. Where you can get in trouble and pay too much is when you buy a home and the appraiser has to go out of the neighborhood to get comps. A case in point would be the recent new home sales over in the new part of Cotton Villa subdivision. The appraiser for those sales got his comps from "The Farms" which is on the other side of town.

So what about those lower priced homes not selling? For the sellers that cannot wait out this slow market, they are selling to investors. This slowness in the lower priced homes is a buying opportunity for many investors and several realtors are also buying these homes.

The Dyersburg market is still doing ok but will again be a sellers market after the B-paper inventory has worked through the process and sold.

If you are relocating to the Dyersburg area, select a reputable realtor and ask him or her to do a market analysis for any home you consider purchasing. As you have read on previous posts, I am excited about the Dyersburg real estate market and economy and consider this current slowness just temporary.


Monday, May 28, 2007


Dyersburg,Tennessee and Memorial Day

Just wanted to tell all my readers to have a safe and happy Memorial day. I also want to say thank-you first of all to all our veterans that served in our military and a big thank-you to the families of our veterans and active duty military(including reserve). These families have had to sacrifice just as their military family members have. I think back to the previous wars and remember all the men and women that served(and many died in battle) to keep us free.

I also thank God for men who also serve as our presidents. Many of them over the last decades have had to make unpopular decisions to fight unwanted wars. If Pearl Harbor had not been attached or if the world trade center had not been attacked then perhaps we could have avoided two wars.

Please check back later this week when I will discuss the effects the B-paper collapse is having on the Dyersburg,Tennessee real estate market.


Wednesday, May 23, 2007


Florida clients again and again!

One of my agents just closed the sale of a beautiful home(on FoxRidge Run)in Dyersburg for a purchase price of $199,900. I met the new owner at the house for his final walk-thru prior to closing. He really got a great house for the money. He and his wife just moved here from Zephyr Hills, Florida.He told me that house would have cost him almost 3 times the money in Florida.

I had a new client call me yesterday from Caruthersville,Missouri(full hook-up campground). He and his wife are travelling with their RV looking at cities and towns in Tennessee. They also are from Florida trying to excape from high prices,over crowding and of course the hurricanes. They live in Lakeland,Florida. We looked at several areas of the county and previewed a couple of homes. They also met with my accountant to find out the tax savings if they are residents of Tennessee.

While they were with the accountant, a lady came into the office(walk-in) who read my marque out front and asked if we really were looking for homes to sell our Florida and California clients? I told her to stick around to meet my "newest Florida clients" who were meeting with the accountant but coming by very soon. This lady then met my Florida clients and told them she had moved here 2 years ago from California. She talked to the Florida couple while I answered the phone. She is getting her home ready to list and sell(I didn't hear why she is moving). I know the home she owns and it is in a great neighborhood and is a great home indeed.


Wednesday, May 09, 2007


California clients again!

I spent a few hours yesterday with another family from California. I had set up several homes to look at but while driving around we decided to look at only 2 homes and then look at neighborhoods and finally visit the local golf courses. This couple is planning to retire in August and make Tennessee their new home.

Their #1 requirement is to move to a place where they can play golf 4-5 times a week and not pay a fortune doing it. We visited the local public course and they were very impressed with prices and the actual layout.

What I believe got their attention was when we visited "The Farms" golf and country club. They were impressed with the golf course and the facility. Chris Young met with them and explained the monthly dues and also stated the initiation fee would be waived. This in itself was great but when he told them it also included unlimited play at two other area golf courses(Newbern and Troy),they were hooked. For less than $300 a month, they could play unlimited golf at 3 golf courses(golf cart included).

I really believe they are returning to California to get their home on the market and their stuff packed up for a move to Dyersburg,Tennessee.


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