Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, April 14, 1991 TAG: 9104120054
SECTION: AMERICAN HOME WEEK PAGE: 12 EDITION: METRO
SOURCE: GENNY ELIAS
DATELINE: LENGTH: Medium
And unlike Northern Virginia and the Tidewater areas, Roanoke has not experienced a high-growth period, which resulted in poor forecasting and an overbuilding of the market in those two areas, said Roanoke REALTOR Stephen Hoover with Mastin, Kirkland, Bolling Inc. of Roanoke.
But Hoover, who will take over the association presidency in January, believes the recessionary period is now past and that current interest rates, lowered to stir the economy, will benefit Roanoke buyers and sellers. One of the main reasons Hoover cites for the slowdown in the real estate market, which he said hit bottom last fall in the region, was the United States' deployment of troops to the Persian Gulf.
The start of the Persian Gulf conflict, as well as the proposed cuts in the military budget, really hurt sales in Northern Virginia and Tidewater, two areas dependent on military spending, said Hoover. But, Roanoke was left relatively unscathed.
"Sales [for the Roanoke area] have not been that off from last year's figures," Hoover said recently, "and here in the last two months, they have picked up dramatically."
Since Roanoke's economy does not rely on any one employer, the region has lagged behind other areas of the state in unemployment figures, and consequently has been hit mostly by the lack of consumer confidence, said the Roanoke native.
"The real problem here in Roanoke simply was one of the troops going to the gulf," he added. "The market held back and didn't do much because everybody was uncertain about the future.
"But once the ground war started and the troops had their amazing success, there was not that fear of the unknown anymore. Today we are seeing the market pick back up as prices start to appreciate again."
Now that Operation Desert Storm has ended and the country's uncertainty has abated, the time is right for consumers to consider buying a home, Hoover said. Interest rates are the lowest they have been since the early 1980s and inventory is excellent.
And, while there have been massive savings and loan failures and resulting financial restrictions, Hoover said that the banking industry is strong and that there are always lenders willing to help finance homes for qualified buyers.
"The problem in financing is with commercial property because of the restrictions imposed by the banking regulators," Hoover said.
"If you allow people to get into high-risk ventures, then you get into the savings and loan institutions' scenario," Hoover said. But residential property is not considered a high-risk venture, he added, as the residential market usually only goes flat and rarely depreciates.
"What will happen [in a time of recession] is that, traditionally, there is a flattening in the prices," said Hoover, who has been a REALTOR since 1972. "You don't see a time of downturn locally, just no appreciation."
One reason many potential homeowners don't consider buying is because of the cash-down requirement. Yet, Hoover stressed that today there are many more financing options available, especially to first-time buyers, that may reduce the amount of money needed up front.
"The best way to decide [if you can buy a home] is to sit down and talk with a REALTOR whom you feel comfortable with," Hoover suggested.
The way to find that person is through the trial-and-error process or by asking friends for referrals, he said. Any REALTOR will be more than happy to sit down with prospective home buyers to help them decide if they can afford a house, Hoover said. REALTORS are in the people business, not the sales business, Hoover stressed.
"Certainly our goal is to make it possible for all those who are employed to afford housing."
by CNB