“Okay, Okay, Athens, GA Housing is Low Risk, according to the Realtor.” I have had this said of my optimism quite frequently in the past year. I sell Real Estate, even capitalize the words like they are some deity, so I am biased. Well here comes PMI to the rescue. You know PMI. You might even pay them each month for the security and benefit of your mortgage company.
PMI (private mortgage insurance) combines their risk management expertise and financial strength to serve as support of the mortgage finance system. This support protects lenders in the event of borrower default. Theoretically speaking, through protecting mortgage lenders from credit losses, PMI helps to ensure mortgages are available to all qualified homebuyers.
For those of you getting ready to buy your first home, in many cases when you cannot put down 20 percent on a home, lenders may permit a smaller down payment and purchase mortgage insurance, which you as the borrower in turn pay as part of your monthly payment. Special rules and conditions may apply for first time home buyers not to have this additional cost during this period of recession in order to stimulate the housing sector. Ask your lender if this applies to you.
What I want to focus on in this column however is how PMI applies research, analytics, risk management, and loss mitigation to assist lenders faced with potential foreclosures.
In Athens, GA on the most recent report, PMI Proprietary Market Research shows on page three that the Athens market is LOW per the index rank. The study shows that based upon where you buy a home, the pricing for that PMI premium you pay each month is dependent on how risky they feel your market is at the present. For example, Athens had an index value as of Q1 ‘09 of 27.8. Other cities around the state of Georgia were Macon, GA at 57.6, Gainesville 63.2, Atlanta 80.7, Savannah 83.3, and Dalton 97.2.
Dalton was the highest Georgia city in terms of the risk of borrower default. Any cities over 70 were HIGH risk. 99.9 was the highest rating a city could obtain.
This report shows not only risk ratings, but appreciation in recent quarters, affordability, and unemployment. For example, Atlanta had an unemployment rate in the 12.3 percent as compared to Athens at 6.9 percent. The affordability index for Savannah is at 114.8 as compared to Athens at 121.37. This means that Athens is comparatively more affordable a market than Savannah as of Q1 ‘09.
This is a great tool and should offer encouragement and direction for homeowners in the Greater Athens area, but also to people looking to relocate to Georgia.
If you are a buyer in our market, these are probably the best buying conditions in 30 years! If you would like to search the Athens MLS with MapTracks please take a look at listings in our “Classic City” today! On this web MLS search solution you can search every listing on the Georgia MLS for the Greater Athens area or in your Georgia town!