I have refrained from making any hard core predictions or gross generalities about our Lake Norman real estate market until I truly had enough evidence to provide well founded guidance to both buyers and sellers. Today was the “Perfect Storm” of data that has prompted me to go out on a limb and give you specific advice based upon my October sales analysis, interest rates, national economic indicators and interviews with some of the leaders of the real estate industry.
For Lake Norman Buyers: It is now time to buy. Why?
- Interest rates have dipped below 6.0%!
- The Federal Reserve dropped their target rate by .25 yesterday but the Mortgage Bankers Association Chief Economist predicted that this would be “the last adjustment needed to reach a neutral position that allows for moderate growth while keeping inflation in check.”
- Lenders have regrouped since the summer crisis. Jumbo loans are returning and good loan options are available.
- The inventory of homes to choose from has never been better: there are currently 1350 active listings in the Lake Norman area (about twice as many as in a balanced market.)
- Sales this past month of October were identical in numbers to October 2006 but the average price was down 11.5%. This is the first month since I have been doing there reports that the sales were equal to 2006. Last month sales were down 22% in volume.
- The average days a listing was on the market for the listings that sold in October was 102 which is quicker than last year at the same time.
- Builders are heavy in inventory and are offering additional price reductions and incentives to buyers.
- We are heading into the holidays which are historically slow for sellers and may be an opportunity for stronger negotiations on price and terms.
- It is impossible to time the market perfectly. Take advantage of all of these conditions while they are still relevant!
For Sellers: How to sell in a buyers market:
- Price your property using the very most recent comparable sales.
- Don’t test the market at a higher price than the comparable sales suggest.
- Be sure to look at comparable sales outside of your own neighborhood because chances are the buyers are looking in more than one neighborhood.
- This past October the average sales price dropped by 11.5% but the days on market dropped to 102 days. This indicates that properties that were priced properly sold relatively quickly.
- Stage your house and gardens before listing! Buyers have many listings to choose from so make yours stand out!
- Make sure the day your property hits the MLS that all marketing is ready as well.
- Make your property easy to show.
- Don’t bank on a significant pick up in the market in 2008. The experts that I heard from today at a RE/MAX conference from the National Association of Realtors and other respected economists all predicted that 2008 will be a repeat of 2007.
- Work with what you have! Make it shine! The only thing to fear is complacency.
- Expect your Realtor to be innovative and to rise to the challenges of this market.
Even the experts agree that you can’t perfectly time the real estate market any more than you can perfectly time the stock market. But, you can identify the strengths and weaknesses of a market and use those to your advantage, whether you are a buyer or a seller. Carpe Diem!