I normally don’t like to poke fun at houses or other Realtor’s marketing, but this listing was too good to resist. Click here to view.

=)

Well, it certainly has been an embarrassingly long time since our last post. Though the Wilmington real estate market took a 55% nose dive in January (for # of transactions), we’ve been busy “getting after it.” In times like these our seller clients need more marketing and more consulting than ever before.

That being said, I recently came across an article from the NC Association of Realtors that’s worth sharing. Thank you NCAR for getting us out of our bloggers-block.

About the Economy:
> North Carolina is consistently at the forefront of affordable housing. Most recently, Cornelius was named one of the most affordable suburbs in the country. Fayetteville and Rocky Mount were both recognized for high price appreciations.
> In 2008, North Carolina welcomed the most newcomers (versus loss of residents) of any state, according. For every 100 people leaving, 180 moved in.

About Home Ownereship:
> In February, Gov. Bev Perdue signed an authorization that could save NC homebuyers more than $30 million.
> The National Association of REALTORS® estimates the impact of the stimulus package and lower interest rates on the housing market to be about 900,000 additional home sales in 2009 compared to conditions before the stimulus package.
> Homes were more affordable in December 2008 than at any other point since the National Association of REALTORS® began its housing affordability index in 1970.

About Foreclosures:
> Nationally, January foreclosure filings decreased 10 percent compared to the previous month.
> In January, the number of foreclosures occurring in NC decreased 29.3 percent when compared to January 2008. Nationally, foreclosure rates were 18 percenthigher in January 2009.
> North Carolina continues to descend in the official ranking of foreclosure rates, and is 33rd nationally.
> Four states – Nevada, Arizona, California and Florida – represented 53 percent of the 274,399 foreclosures in the US in January.

WSJ published an article Tuesday that may be received as a slap in the face by many home owners.  The article (with the byline Americans still see real estate as their best shot at wealth. It may be wishful thinking.) addresses the future of home prices.   You can read the entire article here, however below are several points I found especially noteworthy.

• Economists predict home prices will continue to fall for 1-3 years and then “scrape along the bottom” for many years after
• Historically, house prices have risen at a rate just above inflation and roughly inline with household income (some experts even say it’s a bad idea to count on your home value rising at all!)
• Home values in the Carolinas are predicted to stay strong due to retirees and immigration
• We can expect major challenges in areas where there aren’t enough young buyers to absorb inventory from boomers who are selling

The moral of the story? Real estate is not a silver bullet to wealth, but rather a good way “to get rich slowly.”  If you need to sell, price your home to move NOW- prices are falling and will continue to do so for years.

From left: KW agents Christa Preville, Kriby Keene and Becky King at the 2008 Fashion Victims’ Ball

Keller Williams Realty and WWAY-TV3 have teamed up to host Wilmington’s 2nd Annual Fashion Victims’ Ball, December 6th from 7 to 11 pm at the Coastline Convention Center downtown. This holiday event has attendees wearing wacky, outlandish attire (“sacrificing fashion to benefit local charities”) and enjoying hefty hors d’oeuvres, beer and wine, a silent auction, raffle give-aways, and dancing to the music of Lenny Frank.

Charities benefiting from the affair include: Boys and Girls Club, Breast Cancer Awareness, Carolina Canines, Habitat for Humanity, Project Linus, and the Ronald McDonald House in Raleigh that helps out the parents of critically ill children from our area.

Last year, Keller Williams raised over $11k for local charities and danced the night away with over 500 “fashion victims” in attendance.  For more information, including how you can reserve your tickets for $25 each, please call the Fashion Victims’ Ball Hotline at 910-442-1728.

Please click the image below to view photos from the Wesleyan Chapel United Methodist Church Thanksgiving Feast on Wednesday. Enjoy!

High inventory levels. An uncertain election. The seasonal slowdown. Our financial market. One thing is clear: the real estate shift is here.

But what does this mean? What are real estate professionals actually witnessing out there?

In general, we see selling prices in Wilmington resetting back to the levels they were at 2-3 years ago. Based on trends and activity, we expect them to reset even further- perhaps back to 2002/2003 levels. This presents an incredible opportunity to purchase a home (primary, second or otherwise) at a deep discount. While many buyers are balking at purchasing and taking a position in this market, it is in their best interest to do so for the following reasons:

1) If you wait until you know that the market has “hit bottom” before buying, the market will already have done so and be on its way to recovery. You will have missed out on the best deals available.

2) Interest rates (that have been at all-time historic lows for nearly 8 years now) are destined to rise. A year ago, it was feasible to get a 30 year, conventional mortgage for approximately 5.75%. This has now risen to approximately 6.5% at least. Any potential “savings” in lower sales prices will be eroded by a higher monthly payment due to increased rates.

The truth is this real estate market is most likely here to stay for 10-30 years. The main problem the we face right now is the average American family can no longer afford the average American home- illustrated in the graph below:

This happened when lending guidelines were loosened (in response to the idea that “every American should own a home,” ultimately creating an excess of buyers for which the market wasn’t prepared). When you increase demand, supply goes down and prices go up, resulting in the seller’s market of 2001-2005. Of course what goes up must come down, so we’re in the process of moving back towards equilibrium.

Obviously, this affordability issue effects the entire housing market as it limits the supply of buyers. The biggest problem with the local market is that the normal “buyers” can’t sell their homes in other areas and thus purchase homes here in Wilmington. Ultimately it’s a large chain reaction.

Between the lending institutions reaction to the market conditions (making qualification more difficult), the pricing and affordability issues, and the lack of real understanding about the market (many agents/sellers think that this problem will be corrected by next spring), the market is a bit mired.

It remains a great time to buy a home. The irony of this situation is that all the people in pain are now saying “this too shall pass.” Why weren’t they saying it when times were good? All time passes, whether good or bad. A great lesson for the future is to store up in times of plenty knowing that “this too shall pass.”

If you’re looking to take advantage of this crazy market, or if you’d like a consultation on how to sell during these times, please give us a call at 910-442-2030.

All thoughts and comments welcome.

It seems you can’t turn on the TV or radio these days without hearing about the doom and gloom of the housing market. Well in this post, I’d like to focus on the positive. The graph below shows the average interest rate for a 30-year fixed mortgage since 1972.

GREAT NEWS: rates are the lowest they’ve been in a long long time! Unlike what you hear on the news, there is money out there- and buyers are getting approved for financing everyday. So what exactly does a low rate mean to you? Well, a 1/2% in rate = about $6k more in sales price you can afford per $100,000. Again, great news!

But please also note, buyers waiting for rates to drop even further may miss out. Home loan rates have benefited from the weakness in the financial markets. However, the Fed just lowered the Federal Funds Rate and Discount Rate by 0.50%. In an unprecedented emergency move, central banks across the globe joined in lowering interest rates. This could cause home loan rates to rise in the coming weeks and months if confidence returns to the stock markets.

Thank you JD Terry of East Carolina Bank for providing this data. Feel free to call him anytime with questions about the market: 910-799-4106.

Our grand opening party was a huge success! While Keller Williams Realty has been in Wilmington for over four years, we just recently moved to a new office space located at 5911 Oleander Drive. The chamber kicked off the event at 4:30PM with a ribbon cutting, and the rest of the evening was a social whirlwind of friends, family, clients, vendor partners, and Realtors. We estimate several hundred guests came through our doors! From the Champagne fountain to the sushi, there was no shortage of great food and drinks. Currently, Keller Williams in Wilmington has just over 80 agents. Nationally, KW has over 73,000 agents and is the fourth-largest U.S. residential real estate firm. Our company believes in treating associates as partners and shares knowledge, policy control and profits on a system-wide basis. This is truly a phenomenal place to work! Thank you everyone who attended our grand opening party- your support is invaluable!

The Housing and Economic Recovery Act of 2008 was signed into law this week by Bush. This $300 Billion rescue plan is aimed at aid struggling homeowners in avoiding foreclosure, as well as boost consumer confidence in real estate. Below are a few of the major points that may impact you:

1. Tax credits: First-time homebuyers who purchase their primary residence on or after April 9, 2008 and before July 1, 2009 are eligible for up to $7,500 in tax credit, provided they haven’t owned a home in the last three years and fit certain income parameters. The credit is generous, but it is actually an interest free loan, paid back over 15 years at $500 per year when taxes are filed.

Special note: Some types of seller-paid down payment assistance programs are being eliminated as of October 1st as well – so purchasing a home before then may gain you a double benefit of tax credits AND seller-paid down payment assistance while it is still available.

2. Larger loans at lower rates: There have recently been provisions in place that have allowed loans larger than $417,000 to qualify for better financing rates than normally would be available for “jumbo” loan amounts of that size, thanks to Fannie Mae and Freddie Mac. Although these provisions were set to expire, they are being extended… however, the top end of the loan size that will be allowed under these programs will be dropping down from $729,750 to $625,500 as of January 1, 2009.

3. FHA Hope for Homeowners: This provision is designed to help homeowners who are “upside down” on their mortgages- that is, they owe more on their house than they can sell it for in today’s market. Essentially, this plan allows homeowners who meet the requirements and are upside down to refinance their mortgage to a new 30-year Fixed FHA mortgage. There are a number of qualifying details that must be met and requirements to be agreed to- including agreeing to split the equity in your home with the government in the future. Still, if you’re upside down on your mortgage and struggling in today’s economy, this is an option worth exploring in more detail.

These are just a few of the provisions that may benefit you, and there are a number of other items that impact the housing and mortgage industry as whole. But the bottom line is, home prices are extremely reasonable right now, home loan rates are low, and new incentives are in place that may help make the decision to buy even more appealing than before. If you’re in the market for a new home or need to make some changes with your current mortgage…there’s never been a better time to act.

Falling U.S. home prices are “nowhere near the bottom” according to Former Federal Reserve Chairman Alan Greenspan in a recent in interview with Maria Bartiromo of CNBC. The interview, in which Greenspan expressed negative comments about our economy and speculated that the U.S. would likely end up nationalizing Fannie Mae and Freddie Mac (the largest sources of money for U.S. home loans), can be seen here. In Q2 of this year, Fannie Mae dropped 5.8 percent in New York Stock Exchange composite trading and Freddie Mac dropped 6.4 percent, according to a Bloomberg update.

What does this mean to home sellers?

If you have a need to sell (as oppose to a want), it’s imperative to aggressively price your home in order to unload it NOW. In addition to a softening market, we are faced with a seasonal slowdown as the summer nears an end. Take a look at the graph below.

When the market was jamming and home prices rapidly increasing, a home seller could throw out a price that was too high and it was just a matter of time before the market caught up and the home sold. It wasn’t until the market turned in 2005 that overpricing a home became detrimental. In our current market, when home sellers overprice their home, they end up “chasing the market” with price reductions without ever reaching the optimum price that produces a sale. The result is a high number of days on market and low selling price. Now take a look at the next graph.

By pricing your home ahead of the market from the get-go, you are able to sell quicker and for higher dollar. Lesson learned: The market shift is here. The seasonal shift is coming. By hoping for a few extra bucks, you could be setting yourself up to lose many. If you’re in a “need to sell” situation, contact a professional real estate consultant to learn how to price your home to sell in this unique market. If you are in a “need to sell” situation and are afraid that the “right” price is less than what you owe, make sure to talk with your Realtor about the possibility of a short sale.