lake norman real estate

Lake Norman Real Estate: What Are the National Experts Saying?

Housing Recession: This frightening term is being bantered about in the news quite a bit. But what does it actually mean to the Lake Norman home buyer or seller? When should you buy or sell? Are interest rates going up or down? Whether its on real estate sites on the Internet, in blogs or at real estate office meetings, most discussions focus on the state of today’s real estate market and predictions for the future. The reality is, no one really knows. However, it is helpful to keep abreast of what the pundits and housing industry experts are saying.

Here is a summary of this week:

First and foremost, what has Fed Chief Bernanke said this week? In a speech on Monday at the Economic Club of New York he said:

  • “A further sharp contraction in residential construction seemed likely to hold down overall economic growth in the fourth quarter and in early 2008” and put a “significant drag” on economic growth in 2008″.
  • Data since mid September suggests a “further weakening in the housing market, as sales have fallen further and new residential construction has continued to decline rapidly”.
  • The decline in the housing sector “has intensified this year as demand has declined further, inventories of unsold new homes have climbed relative to sales and house prices have decelerated…”
  • “Conditions in financial markets have shown some improvement since the worst of the storm in mid-August, but a full recovery of market functioning is likely to take time…The ultimate implications of financial developments for the cost and availability of credit, and thus for the broader economy, remain uncertain.

The Mortgage Bankers Association said on Wednesday, Oct. 17th that:

  • Mortgage originations are expected to fall 18% in 2008.
  • Their chief economist “expects the pace of home sales to remain below 2007 levels until late next year, and said prices could continue to decline beyond that before flattening out in 2009.
  • The MBA expects rates on fixed-rate mortgages to rise to about 6.6% by the beginning of 2008 but are expecting at least one more reduction by the Feds in the next few months.

The National Association of Home Builders will be releasing their latest forecast during their October 24th Fall Construction Forecast Conference. In the meantime they have said:

  • Housing starts were down 10.9% in September.
  • “We do expect some additional downward movement in housing production going into next year, at which point starts should begin to stabilize as sales turn upward in the second quarter.”

Today’s Charlotte Observer’s Business Section’s lead article: Housing starts worsen; Eyes on Fed for rate cut as Sept. construction hits a 14-year low is just one of many throughout the country this week. The writer of this article feels that the recent housing figures “strengthen the case for Fed policy makers to cut interest rates again.” And, an economist at Deutsche Bank Securities Inc. predicted that the “contraction will go on into at least the middle of next year.” This article goes on to state that in Mecklenburg County, residential building permits for single-family homes were down 43% versus September of last year.

Just to make our Lake Norman and Charlotte real estate news more interesting, Vero Real Estate Solutions, released a forecast that looks at the last quarter of 2007 to the second quarter of 2008. This forecast states that Charlotte-Gastonia-Concord housing markets will be one of the top five markets in terms of price growth in the country! “Despite the turmoil we’re seeing in the markets right now there are some areas of the country where real estate is holding onto its value, and some where it is actually appreciating” said Veros CEO Darius Bozorgi.

So, what is my conclusion of all of these expert’s opinions and statistics? First of all, it is clear that the future remains uncertain. Even the experts agree on that. As I have said countless times before, I can’t emphasize enough that all residential real estate is local. If you look back at my recent sales analysis (see link below) you will see that even within our Lake Norman real estate market there are many variables, strengths and weaknesses. My advice to all who read the media regularly is to use this information as a general overview but not to base your own personal decisions upon them.

I will address the specifics and timing of listing and buying a home in our Lake Norman area during the upcoming holidays and through the first quarter of next year in the next few posts.

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