On Tuesday morning, Oct. 21, Barbara Corcoran spoke with Matt Lauer on the Today Show about the latest statistics in the housing market nationwide. By examining several variables, she concluded that the answer is "NO" for the country as a whole. I decided to apply her checklist to the housing market in Murphy, North Carolina to see how we fare based the same criteria.
- Unemployment rate is nearing 10% - Our rate in Cherokee County has been above 10% for over a year now, and has actually come down recently.
- There's a large inventory of unsold homes - Our inventory is large, but the total nmber of homes on the market has been dropping
- Home sellers are on the sidelines - Many people who tried to sell their homes and couldn't have decided to rent their Murphy and Cherokee County properties full time instead.
- Mortgage defaults are increasing - According to recent reports in the Cherokee Scout, foreclosures on primary residences are on the rise. However, about half of the homes in Cherokee County are second homes and many owners who were hit by the downturn in the market have already made the decision to sell or allow the bank to foreclose.
- One third of the adjustable rate mortgages in the country will reset over the next 24 months - In areas where the median home price is $400-500,000 and up, a large number of homes were purchased with adjustable rate loans. With many of our buyers being Baby Boomers or retirees, I've seen a lot of cash purchases and 30 year fixed rate loans, which won't be affected by interest rate increases.
Why buy now? Barbara had several compelling reasons.
First, the typical home is 1/3 cheaper than it was 4 years ago. That's definitely true in our area, where right now you can buy an existing house for less than the cost of buying a lot and building the same house on it. The last two homes I sold went for less than the original construction cost. In other words, the buyers got the house at a discount and the lot was free! But we don't have a huge supply of homes in this area. When the foreclosures and builder's spec homes are gone, so are the bargain prices.
Second, Barbara said if the least expensive homes in an area are selling, the recovery has begun. All you need to do is look at my latest October Murphy NC Market Report Update to see that pending home sales are up in Cherokee County. And over the last 60 days, nearly 2/3 of the homes sold or pending were listed at $159,900 or less.
Finally, Barbara pointed out that people are tired of waiting. News from Wall Street is positive and interest rates are at historic lows. Existing home sales nationwide are up 7%. As I pointed out in my post last spring It's Only A Buyer's Market If You Buy, every seller's circumstances are different. A better question to ask yourself might be "Have the sellers of the home I WANT hit bottom?"
And there's only one way to find out the answer to that question - make them an offer.
Comments(3)