Sales Meeting Update

Since last month's sales meeting update went so well, I thought I'd keep the tradition alive and fill you in on this month's meeting*. And while my news this month is not quite as hopeful, it is nonetheless fairly thought provoking.

Here are the interesting tidbits from today's meeting:

• The vast majority of our Q1 and Q2 closed sales came from the $100,000 to $200,000 price range

Why? Well I'm going to go out on a limb and speculate that a) people who could have qualified for the lower price homes last year are no longer meeting minimum lender requirements and b) people who would have qualified for the higher end homes are either staying put, not qualifying for as much home this year, or are being conservative and buying less home than they qualify for. Another factor in all of this is that if the upper and lower range price homes aren't selling, the people who are trying to sell can't move on and buy, which further compounds the issue.

• Our in-house mortgage person estimates that of all the loans she is currently working on, roughly 90% are FHA.

According to her (and others), the number of FHA loans has gone up as much as 50% this year in many parts of the country. Why? Going out on less of a limb, I think one answer here is that conventional mortgage lenders have been tightening their minimum requirements all year long, with the minimum credit score raising to 700 and 100% financing going to the way of the dinosaur. Not only does FHA allow lower credit scores, it also allows the use of down payment assistance programs (read: seller paid) for those who have no money to put down on a home. Combine those two factors with recently raised FHA loan limits and you begin to see why FHA popularity is skyrocketing.

So what do you think? Any thoughts on why the upper and lower range listings are sitting on the market? And what about you mortgage people? What are you seeing in the Knoxville market right now? What percentage of your current business is FHA?

*Keep in mind that while sales meetings, and thus these updates, are chock full of real estate number goodness, those numbers are for my company only and not for Knoxville as a whole.