Housing market doesn't scare peninsula folks


Posted: Friday, December 07, 2007

We've said it time and time again how fortunate we are to live on the Kenai Peninsula. This week's Clarion story about the situation with the national housing market proved that we are, indeed, better off.

Despite the increasing debt from expensive mortgages that homeowners in the Lower 48 are faced with, the trend has not materialized in our neck of the woods thank goodness.

These "fiscal crunches" are creating massive foreclosures Outside, though, as people see their dream homes slipping from their grasp.

The risky loans and poorly designed adjustable rate mortgages are giving homeowners headaches and, in some cases, leaving them without a roof over their heads.

According to HUD Secretary Alphonso Jackson, the reasons are plenty as to the market implosion.

"More than $1 trillion in rate resets are expected during the next five years." In other cases, he said, "unscrupulous lenders and brokers" pushed risky and unsafe products, including so-called "piggyback" or "liars" loans, often requiring no down payment or verification of borrowers' incomes.

But that's not the case here.

Local lenders tell us the peninsula has avoided such dream crushing and is enjoying modest population growth and relatively low unemployment a recipe for stability.

"We're different. So far, prices seem to be stable, based on what we are observing," Aaron Swanson, of Residential Mortgage in Soldotna tells us. Markets in Florida and California, for instance, have seen "ridiculous" rates of appreciation, Swanson said.

Prices stabilized, then fell, leaving many owners with homes no longer commanding high prices. Facing payments beyond their means and unable to sell, foreclosure was the only way out.

However, here on the peninsula, we basically see two different types of homeowners: They are either young and moving into larger homes as their families grow, or older and downsizing to more manageable homes for when they retire.

There aren't many who do it strictly for profit, according to Philip Alderfer, of the Alderfer Group in Homer. He also noted most mortgage seekers deal with local financial institutions that handle their loans themselves. If any problems come up, they can meet with the lenders face to face, eliminating any potential crisis.

Our story also pointed to other economic factors that make foreclosures less likely on the Kenai, like employment and steady growth in population.

Jason Carroll, with First National Bank in Kenai, said their business has seen less delinquent mortgages of late a healthy sign.

Local lenders also say the interest rates here have been good for a while, and the slow and steady rate of property appreciation is what makes the peninsula even more appealing.

It appears we are more fortunate than we thought and you can take that to the bank.

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