The 2009 Lake Norman Real Estate Market is going to be dependent upon two major national issues:
- Consumer Confidence
First and foremost, potential home buyers are going to need to feel confident that they are buying a home at the “right” time. What will instill confidence? I think it will be a combination of signs that the national economic crisis is turning a corner and a feeling that the housing prices are low enough to have little risk.
Lenders will play a critical role in our local real estate market in 2009. If interest rates remain incredibly low that’s a plus but the loan process and the buyer’s ability to get a loan is equally important. Short Sales and foreclosures are now in the books here in Lake Norman and those sales are going to and have already started to impact appraisals. One or two low sales in your neighborhood will bring down the appraisals and consequently the amount lenders are willing to loan.
What to look for in 2009:
- Home prices must and will go down. Our inventory of active listings around Lake Norman is excessively high. Every day I get email updates about impending foreclosures and short sales. Builders are already taking their hits. Those that have not gone out of business have stopped building any spec homes with very few exceptions. Two thirds of our existing inventory are now re-sale homes. Some sellers are already in foreclosure or negotiating short sales. I think reality will hit this spring because many sellers and even Realtors are still hanging on to the hope that we will get the usual spring “bounce”. When that doesn’t happen, prices will come down. Sellers, it is not enough to get showings, if you are getting second showings but no offers you are still priced to high. The sooner we get the prices down, sales will go up, our inventory will drop and our Lake Norman real estate market will stabilize.
- Interest rates are incredibly low which may help move some buyers off of the fence if they are motivated to buy.
- Short sales and foreclosures will continue and may even grow.
- New construction has slowed to a crawl and will remain this way indefinitely. Some of the stronger builders are and will continue to offer pricing guarantees and other creative ways to entice buyers to get off the fence.
- Appraisals will become a critical part of the purchase process because short sales and foreclosures are bringing comparable sales numbers down making it even more difficult to get a loan. Buyers will need to have excellent credit, preferably 20% down and the property is going to have to appraise!
- A change in Consumer Confidence: This truly is THE most important factor even in our Lake Norman housing market. Once home buyers feel confident that the US economy has stabilized and that our real estate market is looking more and more attractive they will start buying in greater numbers.
Right now there are two types of Lake Norman home buyers:
- Those of you looking to move over the next few years and who are willing and able to wait for prices to come down further. You look at your home purchase as an investment as much as it is about living on the lake. I would recommend that you wait to purchase for at least 3-6 months or even a year unless you happen upon a “bargain”.
- Those of you looking for a home and an improvement in your quality of life. You plan to stay in your Lake Norman home for many years. If you are able, I encourage you to take advantage of the great interest rates and significant supply of active listings, do your homework so that you know the comparable sales, and go ahead and buy your special home on Lake Norman. The lake is as beautiful as ever…after all, it doesn’t know we are in a recession! Don’t miss out!