Why is it that when it is a seller’s market and home prices are on the rise the news calls it a great real estate market. However, when home sales are slower the experts use nothing but negative adjectives to describe the real estate market? Now , if you are in a real estate related business or a seller then this would make sense…the faster the pace of home sales the more money you will make or the higher the sales price. However, if you are a potential home buyer or real estate investor then wouldn’t the opposite be true? In my opinion, this current market is, in fact, a very good time to consider buying:
- The inventory of active listings is up. Buyers now have more choices in most price ranges and in most of the Lake Norman communities
- Prices are more negotiable. While the overall average sales prices in the Lake Norman area have not dropped a lot, certain price ranges and locations are extremely slow and inventory is sitting. Many builders are offering myriad incentives including paying closing costs and upgrades. I have been bombarded with flyers from builders and even listing agents offering various incentives for buyers and buyer agents. (As always,I personally will turn any bonuses I am offered over to my buyers through closing).
- Mortgage interest rates are hovering at 6.0%. This is historically VERY low. With the Federal Reserve cutting their overnight rates by 50 basis points, the second mortgages and home equity lines will be positively impacted by this drop. And, mortgage rates may be affected in a positive way but there is also speculation that if investors are inspired by this rate cut to invest in the stock market that, in fact, the 30-year fixed rate may go up. Either way, rates right now are excellent!
- The holiday season, while slower, is a very good time to buy or sell. Why? Because the sellers that keep their homes on the market during the holidays are very motivated to sell and buyers who are looking to buy during the holidays are usually very motivated to buy.
The current mortgage crisis is related to the subprime market. A buyer with little to no downpayment, lower credit scores or an unsubstantiated income history will probably not be able to get a conventional loan. However, if you have good credit scores, a tradtional 20% cash downpayment and can provide documented income you should be able to get a very good rate. Lenders and mortgage brokers are looking for clients, they just don’t have the same flexibility that led to the current rate of foreclosures and that is a good thing!
Finally, the possibility of a significant drop in home prices in the greater Charlotte and Lake Norman area is remote because our economy is simply too strong. So, why wait in the off chance that housing prices might decrease and that interest rates will also decrease simultaneously? If you find the home you’ve always wanted, you plan to live here a while and you can line up good financing, buy it and hold on to it!. Now, if you want to flip a property or plan to stay a very short period of time, then I would hold off on buying. Real estate has been a good long-term investment and will continue to be especially in areas of stability like Lake Norman and Charlotte.