The future of our Lake Norman Real Estate market may depend as much on government and financial regulations and the progress of the US economy as it does on our local economy. Nationally, the housing market has been greatly impacted by new regulations that have made the ability to get home loans much more difficult. Since we rely so much on relocation buyers, Lake Norman’s housing market gets hit twice, once with the difficulty of folks wanting to relocate here having problems selling their homes and once because our potential Lake Norman home buyers are having a hard time getting loans on purchases. Here is a summary of some of the details related to our Lake Norman housing market:
The Home Valuation Code of Conduct rules employed by Fannie Mae and Freddie Mac since May 1, 2009 for home appraisers have had such a negative affect on the national housing market that the National Association of REALTORS, The Mortgage Bankers Association and the National Association of Home Builders have united in an effort to get the federal government to “establish consistent appraisal rules for FHA and the GSEs” (Fannie and Freddie) and gain official clarification of these new appraisal rules”.
Is the FHA (Federal Housing Administration) in trouble? Rumors have been flying about whether the FHA is running out of reserves due to mortgage losses. According to a recent press release, the FHA “will tighten credit standards and implement new rules for appraisals on January 1, 2010”. They went on to say “FHA’s insurance fund is sufficient to cover future losses, but the tighter policies will ensure that the loan guarantee remain self-sustaining….” (David H. Stevens, FHA Commissioner).
The Federal Reserve will stretch out mortgage purchases according to their news release yesterday. This means they will continue to purchase mortgage-backed securities that have helped keep mortgage rates low by extending the $1.25 trillion program’s sunset from the end of 2009 to March of 2010. Good news!
The First-Time Home Buyer $8000 rebate expires November 30th. There are some efforts to get this extended but they don’t seem to be getting traction.
A new bill was signed into law in North Carolina several weeks ago that is meant to stem the foreclosure rates. The legislation requires a court clerk to determine whether a mortgage holder has been able to talk to their lender about working out a way to pay the loan and whether the lender has given the mortgage holder sufficient notice before trying to foreclose. “This legislation allows time for loan modifications” according the NC Attorney General Roy Cooper.
From the trenches I can tell you that home loans and appraisals have been and continue to be a significant problem here in the Lake Norman housing market. Lenders are now having to use third-party appraisal management companies to hire appraisers who in many cases are not experienced in the area of in which they are appraising properties. Underwriters are taking second looks at the loan packages as late as the day of closing leading to days of delayed closings. Most feel this is because the underwriters are afraid that the loan they approve many not be salable to mortgage purchasers like Fannie and Freddie.
Where is our Lake Norman real estate market today? I just took a quick look at our September month-to-date numbers on our MLS. With 39 closed sales so far this month, it looks like our September sales will be down from both last month and last year. However, the pending and conditional home sales look a bit stronger so we may see a slight increase in closed sales in October. Our inventory remains about the same as last month. According to an article in the Charlotte Observer on September 10th the entire Charlotte area saw some positive signs. However, Mecklenburg County “saw sales and prices down 12% ” and “Iredell’s average price decline of 17% was the biggest” of all of the counties. (Compared to 2008).
Where is the Lake Norman housing market heading? Some of my savvy home buyers have jumped off the fence and are actively looking and buying. This is because they feel there is a window of opportunity this fall. With high inventories and dropping prices, sellers may be psychologically feeling more anxious than they will be when Spring comes and they have renewed hope that the market will improve. With interest rates back down to about 5%, I would have to agree that this fall may be a good time to make a move.
Sometimes I wish I didn’t have to write posts like this one. I remember when buying a home was about just that, finding the right property in which to enable a family to create their dream home…not an investment. Some home buyers still feel this way but most care more than ever about the pricing and timing of their purchase.
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