Why Should I Buy A Home Now?

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Everyone Wants a Lower Price, But What About the Impact of Interest Rates?

When shopping for a home, the natural tendency of any buyer is to want to pay the lowest price possible. It’s important to keep in mind, however, that the sales price is not the only factor that determines what the monthly payment will be. In fact, the impact of higher interest rates can easily nullify any benefit of waiting for a lower price.

Why Should I Rush to Buy?
While you may have heard discussions in the media about the decline of property values in many markets, the rate of decline appears to be stabilizing.

That being said, it would not be unreasonable for buyers to want to hold out for an additional decline of 10%, hoping to capture the best possible price. However, as property values have declined in many areas to 2003 levels or lower, waiting longer to pull the trigger could be a mistake. Many markets are reporting that lower property values have been bringing out investors and the result has been multiple offers on many properties. Properties priced correctly are not declining and, in fact, are creating a lot of interest.

Interest Rate Complacency
The problem is that many home buyers have been lulled into a sense of complacency because of extremely low interest rates. Since the Federal Reserve initiated its program of buying mortgage-backed securities, which control the rates people pay for their home loans, rates had been range bound, bouncing between 4.50% to 5.00% for a 30-year fixed-rate loan.

But buyers shouldn’t be confused by this. These rates are artificially low! Historically, interest rates have been above 6.00%. And any rate obtained below this number is a great deal, especially on homes with price tags from 2003!

Markets are Unforgiving
The last two weeks of May showed just how unforgiving the markets can be for people who choose to procrastinate. In just five days, interest rates from many lenders increased anywhere from .50% to 1.00% as fixed-income investors demanded more for their money.

For anyone who is waiting for prices to drop even more, a 1.00% increase in interest rate would bring a higher monthly principal and interest payment on a home, even if the price of that same home had fallen an additional 10% in value.

If you  are waiting for prices to fall even lower, be aware that while holding out for a lower price may help them win the battle, you could lose the war in terms of monthly payments and overall affordability. With the Federal Reserve scheduled to end its buying of mortgage-backed securities this year, rates only stand to go higher for those that wait. In fact, interest rates are already on the rise and could go higher from here.

$8000 Tax Credit
If you are planning to purchase your  first home this year, you will need to take possession before 12/01/2009 to be eligible for a tax credit of up to $8,000. In a survey conducted in March by Move.com, nearly 50% of home buyers are currently unaware that this free money exists in the marketplace. And since over 50% of all buyers are first-timers in today’s market, this could impact a lot of potential homebuyers.

Wilmington NC Real Estate

First time home buyers in Wilmington NC have a nice choice of homes for sale that are priced to sell quickly. Affordable neighborhoods in Wilmington, NC woodhall1such as Whitney Pines, Alamosa Place and Jacobs Ridge are among the most popular. These neighborhoods are conveniently located near Wrightsville Beach and Mayfaire.

If you are searching for Wilmington, NC real estate, no matter what price range, just log on to my website at www.cbbaker.com for complete details on all homes for sale in Wilmington, NC. You can search by map, price range, neighborhood, schools and more.

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Congress asked to stimulate the housing market

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There has been a  positive development for the real estate industry that was announced earlier this week by the Business Roundtable, an association of chief executive officers of leading U.S. corporations. Specifically, the Business Roundtable’s Housing Working Group – which is chaired by Realogy CEO Richard A. Smith – issued a set of recommendations for the White House and Congress that are aimed at jump starting the housing market in order to stimulate a broader economic recovery.

This is particularly timely as it comes right on the heels of my recent visit to Capitol Hill and Coldwell Banker Legislative Week. The Business Roundtable’s recommendations are as follows, similar to what I was proposing during my recent meetings:

Keep mortgage interest rates at historically low levels (below 5 percent) for at least one year;
Expand the current First-Time Homebuyer Tax Credit incentive from the lesser of 10 percent of the purchase price of the home or $8,000 to a higher limit of either 10 percent or $15,000 for all homebuyers, remove the income restrictions and include all primary residence purchases for one full year;
Conduct a thorough review of current foreclosure mitigation and loan-modification programs in light of rising loan-modification re-default rates;
Make permanent the current temporary conforming loan limits; and
Continue to review and strengthen government efforts already underway to review and refine mortgage lending practices.
“We believe targeted, demand-side solutions – such as the ones Business Roundtable is recommending today – will provide a critical next step for a housing recovery that will help create jobs and boost the economy as a whole,” said Smith in the Business Roundtable’s press release.

Coldwell Banker applauds the Business Roundtable for its proactive efforts to reinvigorate the U.S. housing market, and we are proud of the leadership role our parent company, Realogy, has taken in this regard.
As  we all know, this would be great news for our Wilmington, NC real estate market. We are experiencing an increase in contracts, but sales activity on homes for sale in Wilmington, NC  above $300,000 still remain very slow.

For more detailed information about the housing market in Wilmington, NC, please contact me directly kay@cbbaker.com or 910-232-0363.

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Sell Now and Avoid Mistakes

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If you are truly serious about selling your home in Wilmington, NC, then you need to beat your competition. To accomplish this, you must avoid mistakes that sellers typically make. That way you will seller your home quicker and for more money!

1. Right price – It is crucial to price your home right from the beginning. Don’t overprice it initially, hoping for an offer. Overpriced homes get overlooked by buyers who cannot afford it or they get a better deal elsewhere.

2. Condition – Your home needs to be in pristine condition for a quick sale at top dollar. Buyers are discouraged by homes that need to be fixed up. Instead, they are looking for the model home in move-in condition. If a buyer does consider a fixer upper, they typically deduct more off the sales price than it would cost you to do it up front.

3. Curb appeal – First impression says it all when it comes to selling your home. That is why ” curb appeal”  is critically important for a quick sale. Be sure to spend some time on the landscaping, exterior of the home including the front entrance, windows, porches and decks. Even a new light fixture or hardware for the front door make a tremendous improvement. And, don’t forget some potted flowers.

4. Bright and fresh – Buyers are looking for the fresh paint and bright decor. Always use neutral colors. In addition, freshly cleaned carpet or new carpet can make a huge improvement. Make your home sparkle. Clean and de-clutter every room thoroughly. Get rid of all junk and debris inside and out.

5. Over improvement – Do not spend so much on improvements that you will not recover your investment.

6. Financing – Be sure to accept all types of financing including VA and FHA. You also may want to offer closing costs or other buyer incentives.

7. Don’t go it alone – Always choose a knowledgeable and experienced listing agent to assist you. Sellers who try to sell their own home, often net less from the sale.

8. Showings – Always plan to be away from the home when it is being shown or if an open house is scheduled. Buyers feel more comfortable viewing the home if the seller is not underfoot.

9. Be positive – Approach negotations in a postive manner. Remember, you both want to accomplish a common goal. Let your agent do the job of negotiating your best terms.

10. Offers – Always reply immediately. When buyers make an offer, they are in the mood to buy right then. Do not give them time to cool off.

Kay Baker can provide the most up to date sales data for your Wilmington NC home. To sell your home quickly, please contact her at kay@cbbaker.com.

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April 2009 Pending Real Estate Sales Contracts Up for Third Month

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First Time Homebuyers DreamFantastic positive news was released from the National Association of Realtors today.  The news release stated that the historically low interest rates combined with the $8,000 credit for first-time ( or homeowners who have not purchased a home in 3 years) helped raise the pending home sales contracts, for the third consective month.

The Pending Home Sales Index a “pending prediction” indicator based on contracts signed in April, rose 6.7 percent to 90.3 from 84.6 in March,
which is even above the April 2008 index of 87.5.

To get the first time home buyer credit of $8,000, contracts must be firmed up by November 30, 2009 to receive the credit, so we look forward to an increase in home sales.

The Wilmington NC real estate market has also enjoyed an increase in pending sales contract and still is in a a strong postion to continue this trend.

To search all Wilmington NC real estate and find out about the $8,000 tax credit please read more about the Wilmington NC real estate market here.

Categories: Buying Wilmington NC real estate, Economy, Financing a Home Purchase in Wilmington NC, Uncategorized, wilmington nc, Wilmington NC Market Statistics, Wilmington NC Neighborhoods

Kay Baker Associates | 1001 Military Cutoff | Ste 101 Wilmington, NC 28405 | kaybakerassociates@ec.rr.com | 910-202-3607 | Fax 910-338-2428

Copyright © 2017 Wilmington NC Real Estate Guide. All rights reserved. Disclaimer: All content on this blog is my own opinion and should not be treated as fact or relied upon when purchasing or selling real estate.