Housing market in Gallup called ‘stable’

Almost 100 homes are for sale in Gallup, Century 21 has three downtown neighborhood homes available in the Green Street and Country Club Drive area. [photo by Daniel Zollinger / Independent]

By Elizabeth Hardin-Burrola
Staff writer

GALLUP — The foreclosure crisis in many communities across the country may be grabbing national headlines, but the housing market in Gallup is continuing at a steady and stable pace.

That seems to be the shared consensus of many who work in Gallup’s real estate and mortgage loan business. Mary Lou Mraz, a real estate agent with Coldwell Banker High Desert Realty and the current president of the Gallup Board of Realtors, discussed three issues related to Gallup’s current housing market: fair housing, home buying tips, and foreclosure information.

Fair housing

April is National Fair Housing Month, an annual designation that is directly tied to the modern-day civil rights movement. According to the U.S. Department of Housing and Urban Development, the speedy passage of the Fair Housing Act of April 11, 1968, was spurred into enactment by the assassination of Dr. Martin Luther King Jr. just a week before. The act expanded on previous laws and prohibited discrimination concerning the sale, rental, and financing of housing based on race, religion, national origin, sex, and later amended, handicap and family status.

According to those interviewed, problems with fair housing seems to be mostly a nonissue in Gallup.

“I can’t say I’ve ever seen that in Gallup ... I don’t see that as a problem,” said Melvin Vallejos, the president of Active Investors Mortgage Company. A mortgage broker who helps potential home buyers find financing, Vallejos said he moved to Gallup about 30 years ago. “We’ve always been pretty integrated here,” Vallejos said, who added that he has seen other communities in New Mexico that have had problems with segregated neighborhoods.

Tommy Haws, a loan officer and senior vice president of Pinnacle Bank, said fair housing is a sensitive issue on the federal level, and the government does a lot of regulation to insure the law is upheld. Lenders must undergo regular training on the issue, explained Haws.
“All of our lenders are trained on an annual basis on fair lending,” he said.

Home buying

As of Monday, there were 94 homes for sale within Gallup’s city limits, a number that has been fairly consistent over the last several years. With the arrival of spring — a time when the residential real estate market traditionally perks up — Mraz believes potential home buyers, particularly first-time home buyers, need to educate themselves about the home buying process.
She suggested people visit the loan department of a local bank to learn what information is needed to qualify for a home loan. They should learn their own credit score, she added, look at their own credit report, and correct any errors on the report. She also suggested buyers get prequalified for a loan — which will cost nothing — so they know the price range they can afford, and they should shop around for the best loan and interest rate. Talking with Realtors and mortgage brokers is helpful, Mraz said, and the Internet also has lots of educational information. In particular, she added, national realty companies like Century 21 and Coldwell Banker have Web sites with good buyer resource information.

Realtors can be particularly helpful to first-time home buyers, agreed Juliana Dooley, because they can direct them to homes in their price range, help them with lenders, purchase offers, and inspections, and guide them through the day of closing. Dooley, a real estate agent with Century 21 Action Realty, is a past president of the Gallup Board of Realtors and currently serves on two statewide real estate boards.

Vallejos believes having and protecting good credit is the most important step toward becoming a homeowner. The better one’s credit score, he said, the easier it is to find financing for a home purchase. That’s more important than perhaps it was before, he added.

“Someone who may have qualified for a loan two years ago may not qualify for a loan in today’s market,” said Mraz.
Haws stressed four points for potential home buyers: protect your credit score, have stability in employment, have a documented, good rent history, and watch your debt to income ratio.

“It is a good rule to not have your home mortgage payment more than 25 percent of your (monthly) income,” said Dooley.

Haws added that a homeowner’s total monthly debt — including their mortgage payment — should not exceed 36 percent of their monthly income.

If potential home buyers are planning to buy in the next six to 12 months, Vallejos said he would encourage them to move up their timeline and try to buy now because of today’s good interest rates.

Michael DePauli, a real estate agent with RE/MAX agreed. “If you have been waiting to see what is going to happen with the economy before you buy a house, I don’t think interest rates can get much better,” he said, “and there is a good selection of homes to select from ... ” DePauli and Mraz noted that home prices have declined over the last year.

And although it’s harder for potential home buyers to qualify for financing , Vallejos said the USDA is still offering a guaranteed loan with no money down and no private mortgage insurance to qualifying families from communities with populations smaller than 25,000.

“Buyers need to understand that there will still be closing costs,” said Mraz of such loans. Buyers need to save up at least $3,000 to $4,000 for closing costs on even a modest sized home, she explained.

Avoiding foreclosure

The county clerk’s office tracks the number of foreclosures in the country, Haws said, and foreclosure rates have dropped in Gallup over the past couple of years. Rates in New Mexico have also dropped, Vallejos said. He credits that to the fact that most real estate professionals and lenders here tend to encourage standard mortgage loans with fixed rate interest and not the “creative financing” tactics that were used in other markets.

Although the Gallup housing market has never “boomed” like other housing markets, Haws said, there is a positive flip side. “That usually means we don’t bust either,” he said.

While there is a serious foreclosure problem in some housing markets, Haws believes media reports have blown the problem out of proportion. Nationally, only 4 percent of homeowners are currently delinquent with their mortgage, he explained, with the other 96 percent up-to-date with their payments.

For those homeowners who are facing possible foreclosure, Vallejos encouraged them to talk with their lender about the problem.

“Lenders don’t want to own your property,” Vallejos said. “Talk to them early, not later,” he added.

Haws agreed, and explained that his bank has been able to help a few people who have come in to discuss their financial problems. However, he cautioned that while it is sometimes easy to point the finger of blame at mortgage payments, homeowners sometimes put themselves into a financial bind by purchasing vehicles and increasing their credit card debit after they purchase their home.
Mraz noted that HUD has published a list of tips for avoiding foreclosure on its Web site at www.hud.gov/foreclosure. In addition, she said, free HUD-approved housing counselors can be contacted at 1-800-569-4287 or TTY 1-800-877-8339.