While other parts of the country grope for federal assistance to help bail out their steadily sinking lending and housing markets, New Braunfels — and Texas, in general — may not be in the same boat.
Thanks to fewer sub-prime loans, steady home values and relatively low interest rates, officials say the Lone Star State so far has managed to endure the crisis crippling many of its counterparts.
Federal officials this week announced new plans to expand efforts to bail out mortgage giants Fannie Mae and Freddie Mac in a push to drive down interest rates and extend loan terms for struggling home-buyers.
As the federal government continues to address a worsening housing situation across the country, area professionals say the market in New Braunfels has managed to remain stable amid the recent meltdown.
“I think we’ve dodged a big bullet,” said Steve Lange, owner of S&D Builders. “We’re lucky to be in such a great location. I think Texas hasn’t taken the economic hit that many other areas of the country have.”
He said houses in the area continue to be sold at a steady rate and have been for the past 18 months.
The lack of a local slowdown, while other markets have slowed to a crawl during that same period, is due to a number of factors. One of the primary reasons is that local lenders proved to be more tight with their wallets than others around the nation.
“We really didn’t do any of that sub-prime lending,” said James Racanelli with Sente Mortgage. “It’s hard to say what’s going to happen here (with the federal bailout), because we haven’t been in the same kind of trouble. We’re in a different situation than the rest of the country.”
And that’s not the only difference.
Along with the abundance of high-risk loans, overpriced home values added to the current national housing crisis — another factor that wasn’t nearly as drastic in New Braunfels or around the state.
“Home values didn’t inflate in Texas like they did in other parts of the country, and as such, there’s not that bursting-bubble effect,” Lange said. “We’re not feeling near the effects that other parts of the country are feeling.”
In addition, officials said interest rates remain low and that qualifying for a reasonable loan still can be done with relative ease. So while the country looks to keep its housing market afloat, New Braunfels is and has been steadily above water.
“This isn’t one of those places where you’ll see 30 ‘for sale’ signs on a street, or 30 homes foreclosed in one area,” Racanelli said. “Those are the places that hurt the most, and those are the places that probably will be most affected by the federal bailout.”
