Grand Strand realtors: Refinance program good, but will leave many out
Tue, 25 Oct 2011 22:25:25 GMT —
President Barack Obama announced a new program to help struggling homeowners Monday, but there are questions about how much it will help homeowners on the Grand Strand and Pee Dee.
Market analysts say there are provisions in the program that should help millions of homeowners nationwide and in our area stay in their homes.
But the Grand Strand is a unique market and many of the properties that are in the most trouble here won't be helped.
A struggling economy has left many homeowners under water, meaning they owe more on the home than it's worth.
Obama's new program would allow them to refinance no matter how much their home value has dropped and Grand Strand bankers say there's no question that will help many people.
"I think it could be great for homeowners in this area, who have seen recent decline in their values and this will offer them an opportunity to take advantage of some lower rates, reduced fees. I think it'd be great for our area," said Travis Minter, who handles mortgages at Crescent Bank in Myrtle Beach.
But the program will leave out a huge number of distressed properties on the Grand Strand. Only primary residences - people who live in their homes - are eligible for help.
"It does not have as great of impact on our area, because we are, a majority of our homes are secondary and investment properties," said Laura Crowther, president of the Coastal Carolina Association of Realtors.
Crowther said about 17 percent of the homes on the Grand Strand market are distressed, or about 1,500 to 1,800 homes.
Since many of those are investment homes or condos not eligible for the new refinancing program, some market analysts worry those owners might just give up and walk away from their properties.
"I hope we don't see this but it's conceivable that the investor will say, well, this won't help me any so I might as well get out now instead of waiting," said market analyst Tom Maeser.
Maeser said it's good to help permanent residents, but investors could use some assistance, too.
"I guess I'm not saying it has to be one or the other. I'd kind of like to see something that helps both sides of that equation."
Maeser sees signs that the struggling Grand Strand real estate market is starting to turn around. Sales are up, he said and prices starting to stabilize, but it could be another 12 months before it's back to something like normal.