A Closer Look: Housing Markets in the Swing Spots


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The burst of the housing bubble has affected most (if not all) of us as we watch the values of our homes drop.  And, for those of us who took out two loans to pay for the purchase of our home just a couple of years ago, or who ended up with an interest rate that was higher than we would have liked, the problem has become not just one of wealth, but of economic survival.  So, how have homeowners in these swing spots fared compared to the rest of us? Though we don’t know how such personal financial strain may influence voting, these spots offer an interesting variety to review.

Home Sale ImageAs context, mortgage data from the Home Mortgage Disclosure Act (HMDA) tells us that nationally more of us have been taking out high cost loans in he past few years to purchase or refinance our home.  In 2004, 14.56% of all home loans made were high-cost and likely made by a subprime lender.  By 2006, this number had doubled: 28% of all home loans made in 2006 were high-cost.  (Final 2007 HMDA was just released and will be up on PolicyMap in a couple of weeks. It will be interesting to see how much things changed during the last year.)

When it comes to these swing spots, all of these places – but for Fairfax – have higher rates of high-cost lending taking place than the nation.  It is particularly high in Youngstown, where 57.72% of loans made in 2006 were high-cost; and in Pueblo City where 40.62% were.  In all places, the percentage of these loans has been rising since 2004 – the greatest increase took place in Elko City where the rate more than doubled.

During this time period, a number of homebuyers took advantage of a product called an 80/20 or “Piggyback” loan by financing the purchase of their home with two loans at the time of closing.  As we discussed in PolicyMap’s very first blog posting, these “Piggyback” loans generally indicate that a buyer did not put forth any down payment and instead financed 100% of their purchase.  Studies suggest that these homeowners are more likely to go into foreclosure if troubles arise because they have little to no savings invested in their home.  For more on this, check out “Double Trouble.”

Fairfax CountyNationally, 10.5% of buyers in 2004 used two loans to purchase their home; by 2006, 19% did.  When it comes to these swing spots, Fairfax tops the list; in 2006, PolicyMap estimates that 28.25% of buyers used two loans to purchase their home.  Like the nation, the percentage of buyers using a piggyback loan rose in all places between 2004 and 2006.  The greatest increase was in Las Cruces, where the percentage more than tripled rising from 4.92% in 2004 to 12.7% in 2006.

Mortgage Stats

Area # of Home Loans % High Cost % Piggyback Loans
2004 2005 2006 2004 2005 2006 2004 2005 2006
National 11,745,594 11,558,034 10,068,307 14.56% 25.18% 28% 10.50% 17.60% 19%
Youngstown, OH 1,421 1,318 1,121 42% 57.51% 57.72% 4.23% 5.79% 6.19%
Pueblo, CO 3,508 3,292 2,861 23.80% 40.83% 40.62% 9.69% 19.30% 19.75%
Elko, NV 165 164 170 16.97% 32.32% 36.47% 12.05% 10.42% 17.28%
Las Cruces, NM (City) 1,322 1,357 1,376 16.64% 27.56% 30% 4.92% 10.32% 12.70%
Fairfax, VA 71,012 64,315 45,553 6.86% 14.53% 19.59% 14% 21.98% 28.25%

In terms of home sales, PolicyMap currently houses home sale statistics dating back annually from 2001 through 2006 Las Cruceswith quarterly updates for 2007 (1st Q 2008 will be up soon). We can explore the four quarters of 2007 and annual 2006 median sale prices for these swing spots.  How have they done?

Like incomes in these places, Fairfax is at one end of the spectrum when it comes to actual home sale prices and Youngstown is at the other.  But for Las Cruces and Elko City, median home sale prices were lower by the 4th quarter 2007 than they were in 2006. The greatest decrease was in Fairfax where the median sale price in 2006 was $474,000; by the 4th quarter 2007, it had dropped to $409,000.  As we process and load year-end 2007 data as well as 1st Q 2008, PolicyMap will be able to track more about housing markets.  Stay tuned.

Home Sale Statistics

Area 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007
Fairfax County, VA $474,000 $448,000 $460,000 $450,000 $409,000
Las Cruces, NM $158,402 $159,843 $171,570 $177,489 $174,046
Elko, NV $141,994 $145,308 $140,000 $141,000 $174,487
Pueblo City, CO $97,729 $93,255 $101,000 $110,000 $95,000
Youngstown, OH $28,427 $28,669 $23,000 $24,950 $25,000

Any other places you want to see or variables you’d want to compare, be in touch.

Statistics here are from PolicyMap and includes mortgage calculations based on data from the Home Mortgage Disclosure Act and home sale statistics from Boxwood Means, Inc., a value-added reseller of national home sale data.

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