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Old 06-17-2008, 05:07 AM
 
Location: Morehead City, NC
1,676 posts, read 5,361,785 times
Reputation: 1245

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Crystal Coast Real Estate Opportunity Missed
By: Bill Hitchcock


“The best buying sign there is, is to hear a seller bemoaning the market conditions”

Buyers buy at the worst time. Buyers should buy when times are the worst.
OK, that’ll bend your mind a bit-So let me explain.
Buyers tend to buy when everyone else is buying. This is the worst time to buy in that it favors the seller. Prices rise and terms and conditions are usually strict.
When no one is buying, inventory increases, days on market increases, prices drop and sellers negotiate down to the buyers favor.

Moral of the story: Buy when no one else is!

2005 was the biggest and best year for real estate sales ever along the Crystal Coast. There were a total of 2,153 homes and 430 condominiums sold that year, more than any other year.
And never before or since have sold prices been so high. The average sold price for a residential property in 2005 was $288K, for a condo it was $298K.
66% of every home listed in 2005 year sold.

2008 has been the worst year on record for home sales. Only 17% of all homes listed have sold.
Active listings, (properties for sale) have been the exact opposite. In 2005 there were a total of 3,258 active listings. By mid-June of 2008 we had already reached 99% of that number-3,221.

The average sold price of a home in 2008 is 12% less than in 2005 ($254K vs. $288K)

The 2008 Crystal Coast real estate market offers inventory, more choice, all at a lower price. This should make for a fantastic buyer’s market, right? Then why aren’t buyer’s buying?

Could it be the interest rates that have prohibited folks from purchasing? According to HSH Associates a 30 year fixed mortgage rate in 2005 averaged out at 6%. By mid-June of 2008 the average annual national rate was slightly above 6.4%
Interesting to note-2005 did see more conventional loans and cash sales, but 2008 as seen far greater VA Loans.

What about foreclosures? This is something we hear about almost on a nightly basis from all major news outlets. According to Realtytrac.com the 2008 first quarter rate of foreclosure nationally is 1 out of every 194 homes. In North Carolina that rate is 1 in every 392. For the Crystal Coast and surrounding Neuse River area it is less than 1 in every 2,000 homes. Foreclosures are not an issue.

So why aren’t people buying? Simple-Attitude and perception.

A real estate market is determined to be good or bad solely from the sellers prospective. When prices and sales are down it is presented as a bad time for real estate. This only helps to perpetuate the bad market in that it discourages buyers from buying.

The best buying sign there is, is to hear a seller bemoaning the market conditions.
This fact has not escaped all buyers. Late spring/early summer saw 30 day time periods where as much as 24% of all sales were cash. This is not only an indication of the liquidity of the Crystal Coast buyer, but of the buying opportunity this area presents.

Back To The Future!
Folks, sometime soon the market will revert back to the sellers favor. Although it will be “vogue” (is that term still used?) to buy, it may not be the most financially advantageous time for you to buy.

Right now is the time to buy.
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Old 06-18-2008, 02:56 PM
 
419 posts, read 1,243,586 times
Reputation: 192
How is the lending situation? The rates are low but it seems that the banks are tighter on how much they will lend and who they will lend money to.
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Old 06-18-2008, 03:20 PM
 
Location: Morehead City, NC
1,676 posts, read 5,361,785 times
Reputation: 1245
giffman,
Legal Disclaimer: I am not a mortgage broker or lender. Please consult one for advise.
As a Real Estate Broker and owner of a brokerage firm, this is what we have experienced. If someone has good credit and a down-payment-Borrowing is not a problem.
The first thing we do with our buyer clients is to have them go to a lender and have their financials established/determined. I would highly encourage that eveyone do that first-Before visiting a real estate broker.
I would also encourage everyone thinking about real estate to purchase a complete credit report on themselves.
Even if you have good credit-Sometimes it can be improved it even more.
Bill
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Old 06-19-2008, 09:20 AM
 
Location: Cary and Wilmington, NC
217 posts, read 1,032,439 times
Reputation: 107
I think the problem and reason people are not buying now is the economy. Everyone is pretty scared of what's going on (rising gas prices, food prices, job layoffs). I think people who have the option to stay (i.e. don't need to move b/c of a job) where they are, are doing so, b/c they're in their safety zone. Yes, it's a great time to buy but with the economy as horrible as it is right now, I don't feel people are ready to leave their safety zones right now. I think people will start to feel better after the elections but I don't forsee the real estate market turning around until then. Just my opinion
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Old 06-21-2008, 11:47 AM
 
Location: Asheville
1,162 posts, read 3,700,975 times
Reputation: 1202
I agree with Oyster. It's an election year after a two-term president with no veep to follow. I think the OP should go back and look at house sales in some of the election years and see what the picture looks like that way. Might be interesting. I remember very distinctly just before Clinton was elected, everything economically was tremendously tight. It's the same thing now. People are holding onto their cash, and then it'll loosen up early next spring after the Dems take over everything and straighten it all back out. Smile.
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Old 06-21-2008, 01:01 PM
 
Location: Morehead City, NC
1,676 posts, read 5,361,785 times
Reputation: 1245
Oyster07/gigimac,
I believe your assesments are correct!
Bill
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Old 06-24-2008, 12:54 PM
 
14 posts, read 40,149 times
Reputation: 18
I think there are a few other factors that are not being adressed here. The first is the fact that we are coming out of the biggest credit boom in history which artificially drove prices far higher than simple supply and demand economics would ever have. In response banks are tightening standards which makes it much harder for the average person to stretch and achieve home ownership. The most important one that I see is that the gap between income and the cost to own a home is so far stretched now that the only reason one would want to saddle themselves with a mortgage and all the others expenses involved in home ownership, would be for a healthy appreciation, which there isn't much prospect of that these days with prices still far overvalued. Then throw in oil and the useless war that is blowing our grandchildrens money and fact that America as a nation doesn't really produce anything these days(except debt and consumption), where are we headed? I ask the old timers all the time what they think and the conservative ones are very unsure and some just say , ohh boy, it always comes back around. I'd like to see some glimmer of hope for this nation to give us young people something to look forward to. I am a young person who made a fair amount of money from real estate in the past 8 years , so I have every reason to get back in the market. My question to you or anyone who wants to answer is What is going to magically turn all of these dire situations around anytime soon and get us back on the track that we were on? Or at least a positive track and at least make it worthwhile to buy a house and begin shelling out thousands per month.
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Old 06-25-2008, 05:55 AM
 
Location: Morehead City, NC
1,676 posts, read 5,361,785 times
Reputation: 1245
Here's my opinion.
There's always an ebb tide and a flood tide to the economy and to any business. This reality must be understood and accepted.
Anyone here remember the gas shortage of the 70's and the 15-18% mortgage rates of the 80's?
In real estate and other business ventures I've been involved with-I see folks trying to "will" the situation into something it is is not.
Summer must end. But here's the good news-It will return.
"Behold, we count them happy which endure"- James 5;11

Bill
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Old 06-25-2008, 10:25 AM
 
10 posts, read 32,207 times
Reputation: 14
Homes were being built in Morehead/AB/EI/Cape Carteret etc. at an absolutely absurd pace... it only makes sense that eventually homes produced would outstrip growth. Many of the condos that were built in place of the piers are still vacant
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