Thursday, December 18, 2008

More Evidence Of The Credit Crunch

It appears to me that the definition of a credit crunch consists of 2 things. People getting more and more in debt and institutions not willing to refinance that debt or lend money at all.

So, where are we in Santa Barbara County?

In the communities on the south coast, Santa Barbara, Goleta, Montecito, & Carpinteria the number of refinances that closed in November is 20% of what it was just a year ago. To put it another way, it is down 80% from a year ago. That is a staggering number when you think about when this credit crunch began. It began in August or September of last year. If you look closely at the chart you will see that the average refinance amount is huge. That is attributed to a 68 million dollar refinance that Wachovia recorded. WOW!

Is the news any different in Santa Maria? NO!
The volume of loans there is down about 80% from the previous year as well. The only difference in Santa Maria is that in the last 5 months the purchase loans have outnumbered the refinance transactions. I would think that is a good sign, since most of those purchase loans are buyers, buying bank owned properties.
Now how different is the Lompoc area? NOT MUCH!
They are in the same situation that Santa Maria is in. Refinance volume is down over 80% from last year and there are more purchase loans than refinances and have been for the last 5 months.
I am not sure if this will change in the near future but I can say with certainty that the number of refinances in process right now has increased dramatically. We will have to wait and see if the properties are able to appraise or the borrowers are able to qualify.

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