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Real Estate and Financial Markets: Don’t Expect Much Leadership from Washington until after the 2012 Elections—But is that a Reason for Your Inaction?

Real Estate Agent with Wilkinson & Associates Real Estate

September 30, 2011 05:27 AM

[NOTE TO READER: The Charlotte Area BEST BUYS are at the bottom of this article]

There is increasingly a sad, frightening consensus among business leaders, economists and talking heads alike that we can expect little or no leadership or positive action from Washington on the floundering U.S. economy until after the 2012 elections have concluded. Beyond the perpetual political posturing ... beyond the destructive attitude that it is preferable to allow people and the country as a whole to suffer than to provide “the other side” with any opportunity for political gain… there is probably such a fundamental philosophical difference of opinions between “the sides” as to what will truly solve our economic woes that the Washington gridlock will probably continue until one side or the other controls both the While House and Congress. Even then, both parties have consistently demonstrated an inability to get much of substance accomplished when they were “in control” in recent years. One can only hope and pray that something will change that dynamic after the 2012 elections—and that the change will be for the better. This uncertainty, more than anything else, is probably most responsible for keeping the economy in the deep ditch it drove into in 2007 or 2008. But one thing seems increasingly certain: we cannot expect much leadership or significant action from Washington until the 2012 elections have concluded.

Whole books have been written on the reasons for the current economic climate, and on the best remedies for the mess we find ourselves in. To be sure, I personally favor the more conservative formulae—less government interference and regulation combined with tax code reform that would serve to level the playing field by eliminating loopholes for special interests and thereby increase revenues without raising tax rates. Let’s face it; most “professional” politicians have never operated a business or fought in the trenches of a difficult economy to make payroll or grow an enterprise. That alone should be enough reason to tell most of them to “get out of the way” of those of us who slug our way through the economic jungle on a day-to-day basis. On the other hand, it is probably naïve and even a bit dangerous to think there is no place for government. National defense and infrastructure come to mind, even the though the former has probably seen enormous waste of both money and lives in the last several years, and the latter has been sadly neglected. That discussion is really for another time and place, however.

My real question for the reader is: “Are you using the lack of government leadership or action as a reason (or an excuse) for your own inaction?” With low interest rates come very low returns on “safer” investments like money market funds, bank deposits and CD’s. The stock markets remain extremely volatile, making them risky, stressful and dangerous for many investors. But let’s look at the facts surrounding the current real estate market. Mortgage interest rates are at historic lows. Home prices are down 30.6% on average from the highs of 2007 and 2008 (depending on the region of the country, of course). The stream of foreclosures (REO properties) into the market continues to hold prices down, although there is credible data to indicate that REO’s are being absorbed by the market now at a faster rate than they are being replaced—at least for now. Further, rental rates are up significantly because the demand for rental properties is up significantly. All of this makes for the “perfect storm” for home buyers and investors. Unless the world lurches into a global depression—and there are very, very few credible economists predicting that, in spite of the current chaos in Europe—it is quite possible and even probable that housing prices have reached bottom. In much of the greater Charlotte area, I have seen prices stabilize and even begin to move slightly upward again (also depending on the area and neighborhood, of course). When viewed rationally in the context of the facts, rather than driven by fear and emotion, real estate looks like a very attractive investment, both as a principal residence and as an investment vehicle. And that really begs the question, “What on earth are you really waiting for?” Those who wait a great deal longer may well miss the best buying opportunities in more than generation.

And on that note, I will move on to this edition’s Charlotte area real estate “best buys:”

(1)Well Maintained 3/2.5 in a great South Charlotte community, assigned to top-performing schools:

Listing Price reduced to $189,900. This is an updated 3 Bedroom 2.5 Bath 2-story traditional home with a fireplace, maintenance-free exterior with a large rear deck and a .61 acre lot with many mature trees, located on a cul-de-sac in one of the most sought-after school districts in Mecklenburg County (Elizabeth Lane Elementary, South Charlotte Middle School and Providence High School)(see www.ncreportcards.org for unbiased school performance data). It has been available since March, so there is probably room for negotiation between the sellers and a serious, qualified buyer.

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(2)Five Bedrooms and 3.5 Baths – Lower Union County Taxes – Sought After Schools and Community:

Listing Price Reduced to $249,900. The average of sold 5 Bedroom comparable properties in this upscale Waxhaw community over the last 6 months has been $297,900, with a high sale price of $326,000 and a low sale price of $275,000. The average of currently active listings in this community is $304,997. The tax assessed value of this home is $316,940. Did you note the reduced listing price of $249,900? The home was built in 2006, so it is nearly new. It is spacious and includes many of the upscale bells and whistles. The community has a beautiful clubhouse, swimming pool, playground, tennis courts and walking trails. And it is assigned to the highly desirable Cuthbertson Schools.

(3)Two Bedroom Two Bath South Park area Condominium that Has Been on the Market More than a Year:

Listing Price reduced to $139,000. This centrally located 2/2 condominium is located within walking distance of South Park and has been available since August 27, 2010. Upgrades include granite counter tops, tiled floor and backsplash and stainless steel appliances. This is a second floor unit with large master suite, balcony looking out over a wooded area, and a washer/dryer in the unit. For resale value or those with a child, the community is assigned to the highly-rated Myers Park High School. All this and an asking price under $140,000.

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Of course, one of the main reasons I take the time to publish this blog is to offer to go to work finding you a great deal on your next home or investment. It’s what I do best, and I love what I do. I would be more than happy to answer any questions or read any comments you might have. Take advantage of all the tools and resources available on my website, including the ability to SEARCH THOUSANDS OF HOMES FREE: www.the-realty-web.com. Or please feel free to contact me.

The next edition of CHARLOTTE AREA REAL ESTATE BEST BUYS, with new information, observations and “best buys” should be published on or before October 15, 2011. Thanks for your interest.

Eric J. Dorer, BS, JD

NC / SC Realtor/ Broker

NAR Certified Short Sales and Foreclosures Resource

Wilkinson & Associates Real Estate

8604 Cliff Cameron Drive, Suite 110

Charlotte, NC 28269

(980)875-0950

Fax: (877)541-9774

e-mail: ejdorer@gmail.com

website:http://edorer.wilkinsonandassociates.com

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