Coastal North Carolina Real Estate Blog

Thursday, 02 July 2009

Have We Reached Bottom? 10 Factors to Consider

RISMEDIA, June 24, 2009-Historically, the value of real estate goes through cycles. Many factors affect the value of homes including the laws of “supply and demand.” From the Appraisal Institute, here’s a quick reference guide to some of the factors involved and advice on how to spot a turning point in the market:

1. A spike in local sales activity. A spike refers to a significant rise in the number of home sales (or values) in a local market area, which generally is measured month to month. A spike does not necessarily mean continued growth, i.e. it could be a one month phenomenon.

2. Higher asking and selling prices vs. appraisal value opinions for residential properties. Appraisers study the markets; they do not make the markets. When the data shows higher sale prices in comparable properties market value opinions will increase proportionally. Appraisers seek evidence of value but do not create the value. In time periods with low activity, evidence of any kind is difficult to find.

3. More activity at open houses. Open houses with five to eight attendees is considered average, so a dozen or more people attending an open house means buyer interest is picking up. Also, the mood of the attendees is important. Are they optimist and upbeat? Buyers interest alone does not always translate to effective purchasing power. If the number of buyers in the market increases but they do not have requisite down payments, the sales may still not occur.

4. Shorter marketing times. In some markets, houses have been up for sale for more than a year. In most balanced residential markets, properties that are priced competitively will typically sell in less than six months. If the Days On Market (DOM) is shortening, many practitioners will read an improvement in the market.

5. Reduced number of foreclosures and short sales. A reduction in these transactions commonly signals a more balanced market. If lenders are reluctant to foreclose because of an oversupply of inventory, they may choose to wait to repossess the properties, which could allow a spike in the number of foreclosures later despite a better market condition.

6. Stabilized employment. Stable or increasing employment rates provide the necessary confidence for potential buyers to invest in a home. Since most buyers rely on borrowed funds to make real estate purchases and borrowing money usually requires a source of repayment and that usually means jobs, an increase in this basic need, will enable more real estate sales.

7. Fewer buyer incentives and seller concessions. Seller-paid incentives or concessions are a sign of seller motivation. If there are fewer builders offering “free” upgrades and fewer sellers sweetening the deal with big screen TVs, it may be a sign of lessening supply and therefore a better market.

8. New construction starts. Most builders are quite attune to their markets and will not build new homes without a corresponding contract for sale or a perceived increase in demand. An increase in the number of building permits usually indicates higher demand and higher prices. If residential properties are selling for 25% less than they cost to build, only a few new homes will be built. It would be prudent to buy an existing home rather than build a new one for a much higher price.

9. “Move-up” buyers entering the market. More buyers willing to move to a larger or superior quality home indicates a healthy market. The lack of buyers at the lower end of the price range will have a chain reaction throughout the market. If a buyer for a high priced home has a lower priced home to sell first, the sale of the higher priced home may have to occur before the higher priced one can sell.

10. Apartments advertising renter specials - fewer renters in the market may indicate more people are moving into owner occupied homes or it could indicate a reduction in population. Lower population will cause an oversupply of housing which will oftentimes permeate throughout several markets.

If you would like to buy or sell Wilmington, NC real estate, contact Sandy and Steve Thornton for all your home buying and selling needs. Specializing in Wilmington, Leland, Hampstead, Sneads Ferry, Jacksonville, Topsail Island including Surf City, Topsail Beach, North Topsail Beach, Beach and waterfront properties covering New Hanover County, Pender County, Brunswick County and Onslow County areas.

Experience the Gold Standard

Sandy and Steve Thornton
Century 21 Sweyer & Associates
Brokers Realtors CSP Centurions
unrealestate1@aol.com
www.ncdreamhomes.com
910-352-3526 910-554-2441

POSTED BY: Sandy & Steve Thornton AT 07:54 am | Permalink | 0 Comments | E-mail this

Thursday, 04 June 2009

Pending Home Sales Up for Three Months in a Row

RISMEDIA, June 2, 2009-Record low mortgage interest rates boosted pending home sales for the third consecutive month, with some benefit now from the first-time buyer tax credit, according to the National Association of Realtors®.

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in April, rose 6.7% to 90.3 from a reading of 84.6 in March, and is 3.2% above April 2008 when it was 87.5.

Lawrence Yun, NAR chief economist, said buyers are responding to very favorable market conditions. “Housing affordability conditions have been at historic highs, but now the $8,000 first-time buyer tax credit is beginning to impact the market,” he said. “Since first-time buyers must finalize their purchase by November 30 to get the credit, we expect greater activity in the months ahead, and that should spark more sales by repeat buyers.”

The Pending Home Sales Index in the Northeast shot up 32.6% to 78.9 in April and is 0.8% above a year ago. In the Midwest the index rose 9.8% to 90.4 and is 11.1% above April 2008. The index in the South slipped 0.2% to 93.0 in April but is 3.5% higher than a year ago. In the West the index rose 1.8% to 94.8 but is 2.9% below April 2008.

NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said there are numerous buyer assistance programs around the country. “Some states are offering bridge loans that allow first-time buyers to use the tax credit for downpayment and closing costs, but there are many other local government and nonprofit programs available to buyers, depending on location,” he said.

“Just last week, HUD announced that qualifying buyers can use the tax credit for closing costs on FHA loans, to buy down the interest rate or make a larger downpayment. Buyers who are wondering about their options should contact a Realtor®, who can advise consumers on the housing assistance programs and resources available in a given area.”

NAR’s Housing Affordability Index is in record territory. The affordability index rose to 174.8 in April from an upwardly revised 171.9 in March, and was the second highest monthly reading on record after peaking at 176.9 in January of this year. The HAI is a broad measure of housing affordability using consistent values and assumptions over time, which examines the relationship between home prices, mortgage interest rates and family income; tracking began in 1970.

A median-income family, earning $60,900, could afford a home costing $296,800 in April with a 20% downpayment, assuming 25% of gross income is devoted to mortgage principal and interest. Affordability conditions for first-time buyers with the same income and small downpayments are roughly 80% of that amount. The affordable price was well above the median existing single-family home price in April, which was $169,800.

Yun cautions that the reporting sample for pending home sales is smaller than that of existing-home sales, so it is subject to greater variability. “In addition, the relationship between contracts on pending home sales and closings on existing-home sales is taking longer than in the past for several reasons,” he said. “Mortgage processing time has increased, it is taking many months to close on those homes requiring short sales with lender approval, and some sales are falling through at the last moment.”

The total number of existing-home sales is expected to improve but with dramatic local market variation in the timing of recovery. “The market has already bottomed in some areas, but this is an unusual housing cycle with some areas improving rapidly while others languish or decline,” Yun said.

For more information, visit http://www.realtor.org.

POSTED BY: Sandy & Steve Thornton AT 08:06 am | Permalink | 0 Comments | E-mail this

Tuesday, 14 April 2009

Effective Staging Tips - Don't Overlook the Mirror

By Karen Schaefer

RISMEDIA, April 14, 2009-What is the first thing that you always want your potential buyers to see when they first walk into your home that is for sale? Kitchen? Bathroom? Multi-Level Deck? The correct answer is “themselves.” One of the best staging techniques is the use of mirrors, although most people don’t know how to effectively use them. The first place that you should have a mirror is directly on the wall in front of someone when they open and walk through the front door.

I love having a small mirror right there with a little key hook next to it, holding the house keys. Just above or below the mirror, I do a stencil that says very simply “Welcome Home.”

What if you don’t have a wall that is facing the front door, hence, no place to hang your mirror? The next best area in which to hang a mirror is in a location where the person entering the home will first walk. One of the most important things to remember is that while staging your home, you are creating the flow at which you want visitors to move through the home.

If you are doing an open house event, you can even hang a mirror in the center of a wreath with a small “welcome home” sign suspended from the wreath. You can also put a small mirror just above the doorbell with a stencil that says: “Just use your key” and tie a small key on a ribbon and fix it to the mirror. These are great ways to get people to fall in love with your home before they ever even come through the front door.

My next favorite place to put a mirror is in the bathroom. Of course, you will have one above the vanity or lining the wall above the sinks, but have you thought about putting a small mirror in the bathtub or shower?

A mirror can always be used to expand the size of a room or make a narrow room look wider. Don’t be afraid to have mirrored closet doors in the right environment, or do a mirrored wall. What you don’t want are mirrored tiles.

A great look is large wardrobe mirrors, fixed to a wall centered, top to bottom. Space them about 2-4 mirror widths apart and paint a “frame” around each one. Now you have added a great decorative and interesting element to the room, while still giving it the benefit of “expansion.”

Lastly, I love a wall of mirrors. Not the panel mirrors that we have been talking about, but rather, all different shapes and sizes, framed, etched, big, small, round, square…you get the idea.

The key to success to creating a wall of mirrors is balance. You have to make sure that you end up with a sense of flow and even distribution. You can couple wood frames with frameless, round with square and etched glass with metal accents. If you have something heavy, then put something light next to it, and try to keep the same shapes from being next to one another and feel free to keep the entire wall neutral or add one or two really bold splashes of color with frames. All neutral works well for an elegant look, but to modernize the scene, throw in one or two bright colors like orange, red or yellow.

However you decide to use mirrors while staging your home, make sure that you use them effectively so that you get the greatest impact.

Karen Schaefer is the Founder of Simple Appeal, Inc. and APSD^TM, The Association of Property Scene Designers. She is widely recognized as the Premier Staging Designer for Investment Properties in the Country. For more information, visit www.SimpleAppeal.com.

POSTED BY: Sandy Thornton AT 03:55 pm | Permalink | E-mail this