I admit it. I am a bit of a news junkie. So, you can imagine that with all that is going on around the world, the elections, the US economy and our local drought, I have been on overload. But, today ranks up near the top as far as the “perfect storm” of real estate related news.
I woke up to see the headlines of the Charlotte Observer: Housing Market Strained: Housing slump catches up to Charlotte. Dip in home building and sales accelerates, but prices hold up relatively well.
Then I find an article online later on from The New York Times ”Fed Cuts Rates by Half-Point; second Reduction in 8 Days.”
Finally, there was an article by the online real estate news source Inman News “House OK’s temporary increase in loan limits”. This, of course, is part of the $150 billion economic stimulus package that includes the tax rebates.
I decided to call one of my local mortgage brokers to get a read on what this all means to buyers and sellers here, right now, in the Lake Norman area. Here is what he said:
- The increase of the conforming loan limits for FHA, Fannie Mae and Freddie Mac may not include the Lake Norman market because as a whole we are not one of the “high-cost” areas. In any case, they will not increase more than 125% of the median price of a home in our area. For those of you who don’t know, there are two kinds of loans: “conforming” which are guaranteed or purchased by Fannie, Freddie or the FHA. Right now, that ceiling is about $417,000. Then there are “non”conforming” or “jumbo” loans which are larger than $417,000 whose rates run a bit higher because they can’t be purchased or insured by Fannie, Freddie and The FHA.
- As of this morning, my lender had 30-year fixed conforming loans for 5.25% and 30-year fixed jumbo loans for 6.125%.
- He reiterated that because the Fed controls short-term rates it can take months for these recent reductions to affect our mortgage loans. However, these are still great rates. In the meantime, the Fed’s cutes will help credit card rates and Home Equity lines of credit.
Finally, let’s look at the Charlotte Observer Article. In my mind this is OLD NEWS. I have been writing about the downturn in the Lake Norman real estate market since last June after observing the first signs of a slowdown in March of 2007. There have been so many national news articles ranking Charlotte as one of the top 5 real estate markets in the country that many neglected to look at our local sales.
So, once again, let’s focus on our own communities. Here is the chart from today’s Charlotte Observer:
|County||Percent change in median prices||Percent change in existing homes’ median price||Percent change in number of existing home sales|
Source: Market Opportunity Research Enterprises
This substantiates my many local sales analysis. Our sales are down everywhere. However, the prices have remained strong in places like Denver while prices have been challenged the most in the Iredell County areas, particularly the Brawley School Peninsula.
Just keep reminding yourself that all real estate is local, some Lake Norman communities are performing better than others and some price ranges of homes are selling better than others.
- Mortgage Interest rates are extremely low and may go even lower.
- Conforming loan amounts might increase in our area which is a good thing.
- Many of us will potentially get a $600 tax rebate by May.
- It is now acknowledged publicly that the Charlotte Housing Market is struggling.
Yes, it is very unsettling to hear about our national economic challenges and it is very important to know the big picture. But, don’t let the big picture news determine what is best for you and your family. Know your local market and make decisions based upon that and what is best for you. Be smart but don’t be scared.