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Builders busy despite mortgage industry woes

The housing market and the mortgage industry have been in national headlines a lot lately, and none of the news is good. Primarily due to the proliferation of sub-prime loans and adjustable mortgages, foreclosures are soaring, mortgage companies are filing bankruptcy and a general gloom prevails that has cast a shadow on not only the U.S. economy, but world markets, as well.

While Mississippi certainly has not been immune to the housing/lending downturn, it has not been impacted as much as other states, interest rates remain low and loans are available, and now is a good time to be a homebuyer. That is the message of the Home Builders Association of Jackson (HBAJ). It says the greater Jackson market is healthy, and its members are staying busy. However, HBAJ’s members are seeing a negative impact from the national news, and they are now looking to get the word out that the local market is generally doing well and is in many ways buyer-friendly.

Frank Pucylowski, president of the home-building firm JFP & Company in Ridgeland and 2007 HBAJ president, says, “Now is a great time to buy a new home in our market. Our builders have great new home selections, and the established lending community is ready to discuss loans.”

Good news

In August, HBAJ put out a news release that offered reasons why today is a good time to be home shopping. They are:

• Prices have leveled off, giving buyers more opportunities to find housing they can afford.

• Houses are staying on the market longer, giving buyers more choices.

• Mortgage rates are historically low.

• Many builders are offering incentives such as discounted financing packages, value-added incentives and even first-year mortgage payments.

• Homeownership is always attractive, offering a stepping stone to financial security, sense of community, personal satisfaction and civic responsibility.

Bob McKay is executive vice president of HBAJ, which has approximately 1,300 members, roughly 400 of them builders. (Ninety-five percent of HBAJ’s members are in the tri-county area of Hinds, Madison and Rankin.) He says the extreme downturn in the housing market has not been seen in the metro Jackson area.

“It’s not happening here,” McKay says. “We don’t see huge peaks here in this market; thus, we don’t see the valleys, either. Banks have had to take over some homes, but there are deals out there, and good choices.”

The first-time and move-up markets are not just doing well, they are excellent, according to McKay. His members agree.

“I would call the first-time market good, and the move-up market very good,” says Mark Martin, managing member of Marcus Martin Builders in Brandon. Martin said at press time, business had slowed, but that was seasonal — homebuyers typically tail off at the start of the school year as parents buy school supplies and focus on their children’s education.

JFP & Company is active is the first-time, move-up and high-end markets, but Pucylowski says he has long been a champion of “housing for the workforce.” He echoes Martin’s view that the first-time and move-up markets are healthy.

The high-end market’s news is not as rosy, but not all bad, either. High-end home sales lag the other two markets, but McKay points out some areas such as Flowood and South Madison County have seen an up-tick in high-end development.

“Hot” areas of activity seem to be scattered all around the greater Jackson area. McKay credits the coming of Nissan to Canton as the catalyst behind the aforementioned boon in South Madison County. He says five years ago, there was little movement in any of the three markets, particularly in the first-time and move-up markets. Now, there is a lot of activity, and he describes the high-end market in that area as “tremendous.”

Byram in Hinds County is another area builders are finding plenty of work, as well as the Ross Barnett Reservoir area and Florence in Rankin County.

Feeling the fall out

With all of this good news in the greater Jackson area, builders are frustrated that they are feeling the fallout from the negative national headlines. Area builders are reporting a decrease in customer volume due to all the bad press.

Martin says the news of the national downturn is definitely affecting Marcus Martin Builders’ numbers. Pucylowski says his company is staying plenty busy, particularly in custom and spec homes, and, thus, is upset that the news media is painting a “terrible picture” that is not true of the greater Jackson area.

McKay says some lenders offered loans that were not a good fit for many homebuyers, and homebuyers did not do their homework before accepting them. Still, loans are available, though lenders are taking a much harder look at applicants, a move that McKay sees as a positive.

Contact MBJ staff writer Wally Northway at northway@msbusiness.com.

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