AmyBSells Team - Cincinnati Real Estate Blog

Amy January 14th, 2008

Update on Mortgages in Ohio Real Estate

The Ohio Mortgage Bankers Association (OMBA) released some very interesting data regarding their Q3 2007 figures that I felt compelled to share with my readers in Cincinnati, Ohio. As a resident, Realtor and Certified Residential Specialist, I feel that it is increasingly the local Realtors job to educate their local public on the state of the Real Estate market. I always suggest that the more local the data and information the better. You can’t form opinions regarding the Real Estate market from national news, based on California, Nevada or New York; you must look at what is happening in your state, city and suburb. This is my reason for writing a series of articles regarding the local real estate market. The more informed you are locally, the better the market will be for us locally.

Let’s start with Ohio, the state level and the recent figures released from the states Mortgage Bankers Association (OMBA). As you may have heard in the past, Ohio was a state of high foreclosure rates. When you break the state down by top 10 counties that these foreclosures are occurring in, Hamilton County, nor any other areas of Greater Cincinnati are amongst the top 10 that are the state’s worst counties for foreclosures. This is great to know if you live in or around Cincinnati, or its suburbs. And it lends to the mentality that the more local your information and news is, the better!

In the state of Ohio, The home ownership rate remains near record levels at 68.2% reports OMBA. This high rate of homeownership is almost record breaking, does not tell me that we are in despair in our Real Estate market. I wish these numbers were a part of the newspaper and evening news statistics!

The OMBA further suggests that 35% of Ohio homeowners own their homes outright, no mortgages at all! 48% are in a fixed rate mortgage, which is the conservative route, and almost half of Ohio residents are being conservative about their home financing, providing a stronger outlook for the future of the Ohio market! 15% of Ohioans have an Adjustable Rate Mortgage (ARM). And the smallest single group of people in Ohio, just 5% of homeowners is a non-prime or sub-prime borrower with adjustable rate mortgages. This is only 5% of Ohioans that have this higher rate loan that adjusts. The squeaky wheel gets the grease is TRUE! Why don’t we hear about the 35% who own their homes or the 48% who have the most conservative loans on the market? Instead, the newspaper and news casts prefer to report the doom and gloom when merely 5% of Ohioans that agreed to take a mortgage above prime rates and that adjusts gets into trouble. The media goes by the saying, “If it bleeds, it leads!” and that is causing so much of the bad press surrounding this Cincinnati Real Estate Market, which is simply not true!

In fact, in Ohio, the foreclosure rate is 1.7% of all loans in Ohio. The market tells us that a little over a half of that 1.7% will actually be foreclosed upon, but there are no exact numbers. The OMBA suggests that the number one cause for delinquencies and foreclosures is historically job related, most specifically so in the Mid-West, which has lost a significant number of manufacturing jobs. It is a fact that lenders want to lend money to borrowers who are willing and able to pay the loan back. They are not trying to induce a foreclosure situation! In fact, the OMBA estimates that between $30,000-$60,000 net loss occurs each time there is a foreclosure on a single property.

The lending community is taking note of these figures and situations that arise from these foreclosure situations. The competition in the lending marketplace has increased, leading the way for borrowers to find more options for their financing from the stronger, remaining lending institutions. The lenders are now pushing borrowers towards the more traditional mortgages, with down payments, fixed products and conventional loan options, which all help the borrower, the lender and the real estate market.

So, yes, Ohio has seen a small amount of foreclosures as state, Cincinnati and even smaller number of foreclosures. This concern over foreclosure figures has created more awareness in the lenders and loan options, which allows borrowers more education on their financing options. I hope that these numbers show you that in Cincinnati, we are going well, in Ohio, we are as well. Get your news locally, and there is always more good than bad, they just prefer to tell you the bad.

Hang in there and check back soon for some local articles on Hyde Park, Mount Lookout and other Cincinnati Suburb market conditions as they happened in 2007.
Data and statistics noted in this article are based onthe Ohio Mortgage Bankers Association’s Q3 2007 figures.

• Buyers , Financing , Foreclosures , Pricing , Trends
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