Wow, so where do I begin to discuss all of the various components that make up our current real estate market in the greater Lake Norman area? Between the national economy, sub-prime mortgage meltdown, the ever-changing home loan programs and our own housing sales there truly is a lot that must be considered when analyzing our current Lake Norman housing market.
Let’s start big picture and move to local news. Following the national economic news last week was like riding a roller coaster. Admidst concerns of worldwide destabilization, more and more talk of a recession and plummeting stock prices, the Feds made their stunning and unscheduled .75 rate cut last Tuesday. (Another one is expected at their regular meeting tomorrow.) Plus, there was the creation of the emergency “stimulus package” passed by Congress and on it’s way to the Senate. By the end of last week stocks appear to have stabilized and nerves calmed down a bit.
The subject of the sub-prime meltdown and state of the current mortgage market go hand and hand. While there is a bit of panic conveyed by the news, the reality is that mortgage rates are in the 5%’s for conforming loans and have even come down significantly for jumbo loans as well. The mortgage brokers I work with are anxious to get the word out that they can do loans and have some of the best rates ever available. The main difference between now and the past few years is that to get the best rates buyers need to have about 680 credit scores, a downpayment and they must document their income. However, at higher rates, even buyers with checkered credit and income can still get home loans as well.
Now, let’s look at the Lake Norman housing market. We have had 61 sales so far this month in the Lake Norman areas 1-5 (all but Catawba River) with 4 days left in January. This compares to 86 sales last January 2007 so it appears that our volume of sales is still headed downward. There are currently a total of 1355 active listings and there were 234 prices changes (reductions) in the past two weeks. The average days on market for this January as been 145 days versus 100 days in 2007.
Okay, so let’s summarize:
- Mortgage rates are in the 5% range which are the lowest since 2004
- Lenders are eager to do business
- Overall, the Lake Norman area has high levels of inventory, and slow sales rates versus 2007
- Sellers want to sell and are reducing prices
- We are heading in to what is traditionally our busiest season for home sales in Lake Norman
Keeping in mind that is it truly impossible to predict the bottom of a market, one is in a much stronger position as a buyer while our housing market is still soft and perhaps still going down a bit than right after it bottoms out and is on its’ way back up.
As always I will watch the market closely and give you an update whenever I see a change or just to share recent sales trends and statistics. In the meantime, if you have any questions please leave me a comment or contact me directly.