Mike Moore
The Journal Times
February 22, 2008
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RACINE COUNTY — A few more days, a few more signatures and Domingo Pedrosa will have the keys to his second chance.
About a decade ago, the Racine man bought a house. Within a few years, his adjustable mortgage rate shot up to 11.5 percent and the bank foreclosed.
He spent the next several years rebuilding his credit and, at 38, he’s buying again. Especially for someone once bitten, this might seem like the time to shy away from the melted-down economy.
Except homebuyers might be the only ones spotting the green light of opportunity in a sea of financial stop signs.
They have plenty of options. The number of homes on the market this month in Racine County is more than double that of two years ago this time, according to statistics provided by the Racine Board of Realtors.
Prospective buyers also have price on their side. Sale prices for homes in the county averaged $155,539 last month, down from $163,164 in January 2007.
This time, Pedrosa went into the search wiser. He and his wife found a duplex on English Street where the owners needed to sell to pay off major medical bills.
He attended a class by the local nonprofit Housing Resources Inc. that explained what to look for at each step of the buying process, and he qualified for a grant from the city of Racine to help cover the down payment. Pedrosa never considered gimmicky mortgages.
“That’s how I got snagged in the first one,” he said.
The buyer’s market allowed Jarred Johnston to snag his first house just two years out of Walden III High School. The 20-year-old Racinian said he searched for about a month and a half before his offer on a four-bedroom Wickham Boulevard home was accepted. He’s on track to take ownership next month, both excited and nervous.
“Whenever you take a big step in life, it’s a little scary,” Johnston said, “because you never know what the outcome is going to be.”
A year after the extent of the nation’s mortgage crisis became clear, foreclosures continue to mount. While that ends domestic dreams for many, it provides an opening for others like Mary Frank.
The 57-year-old Racine woman had been waiting 20 years to pull the trigger and switch houses. With her children grown and the existing mortgage paid off, she found a three-bedroom home in Mount Pleasant that had been foreclosed.
This home has a patio overlooking a pond. Just as importantly to her, it comes with an attached garage she doesn’t have to approach through an alley.
“I was tired of carrying groceries over snowbanks,” Frank said. “The moon has got to be aligned to get my car right in the garage.”
Although certain companies that were too loose with loans are being more careful and thorough, banks like Johnson Bank are eagerly waiting to lend money to prospective buyers, said Bill Winkler, senior vice president there.
Yet falling interest rates aren’t enticing many people to buy homes. Winkler said the index the lending industry uses to chart purchases is at its lowest level since December 2000.
“What I read into that is people’s confidence where they’re at with jobs,” he said.
He’s hopeful government incentives will help people overcome their wariness. The stimulus package Congress passed authorizes an $8,000 tax credit for Americans buying their first home or their first in three years.
Employment isn’t a big worry for Jill Immenschuh of Racine, who feels secure with a family-owned company that sells parts to construction firms. In a recession, people look to fix equipment rather than pay to buy it new, she said.
After years of renting apartments, she and her boyfriend are ready to spring for a place of her own. The market being on her side is just lucky timing, she said. Immenschuh wants a three-bedroom place with a nice kitchen and a spot for a garden. Nothing modern.
“I grew up in old houses,” she said, “and having to do a little cosmetic work doesn’t scare me.”
Compared to the extreme makeover economists and politicians are facing with the monetary system, it must seem like a snap.
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