Real Estate Information Archive


Displaying blog entries 1-5 of 5

Are Charlotte Area Home Vales Holding Their Value?

by Buddy Frey

A recent article in our local newspaper The Charlotte Observer, came out with some very interesting statistics about our housing prices.  While many areas have been hit with lower prices, some regional pockets have actually gone up in price.  On average though home prices only fell 4% across the area...way better than most thought.  (See 5 year zip code stats below)


States the Observer, "No one likes a loss, especially in the value of their home. But put your panic on pause.  The average price of homes sold last year in more than three-fourths of the area was at or above prices from 2003 through 2005. That means most people who have been in their houses a few years are likely still sitting on gains.

The Observer reviewed Carolina Multiple Listing Services' sales from 2003 to 2008 and found:  Last year, 26 of 70 area ZIP codes, or more than one-third, posted their highest prices of the six-year period.  Only seven ZIP codes posted declines for the period. In Charlotte, the University area's 28262 and northwest Mecklenburg's 28216, both pocked with foreclosures, had the biggest declines.  The region's biggest gain in the six years came in 28206, which includes part of Charlotte's Arts District, or NoDa, and the fragile Lockwood neighborhood north of uptown.   And, for 2008, Lincoln County's Iron Station led with a 49 percent hike for 28080.  Last year, the top Mecklenburg ZIP code was 28204, which includes the new Metropolitan condos and the historic Elizabeth and Cherry communities."

I believe the true decline in our market began in May of 2008.  Some believe it started as early as July/August of 2007 when Countrywide got in trouble.  I didn't see it here, maybe flat at worst.  But the truth of it is, we're haven't  bottomed hard because we never really exploded to the up side.  And historically, our home inventory is low.  Less people are putting their homes on the market and builders aren't building so that has helped as well. 

Warning!!!  When we turn around here in Charlotte, it will not be gradual.  We're the 7th largest market in the US and and over the years we have actually become a destination.  I predict we will take off big time.  Don't know exactly when but buyers...get in while the getting is good.  Sellers, hang in there. At some point, the ball will be in your court and it might be sooner than you think. 



Housing Stimuls Package to the Rescue

by Buddy Frey

If you have been watching the news this week, you may have noticed that the debate in Washington has finally turned toward real stimulus for the housing industry. As a result, many believe that we could be on the brink of a substantial turn around in the real estate market.  

Last night, the Lieberman/Isakson Amendment was included in the senate version of the Economic Stimulus Bill by a unanimous voice vote. This amendment would provide a Tax Credit to all home buyers at the rate of 10% of the sales price up to a limit of $15,000. The credit would be available for a one year period to all purchasers of primary residences.  And home mortgage rates may be heading lower...Today, the senate expects to debate Amendment 353, a proposal by Senator John Ensign (R-NV) that would provide 30 year fixed financing at a rate of about 4%, for anyone purchasing a primary residence.  This is great stuff.

If these two provisions survive in the final passage of a stimulus bill they could have a tremendous impact on our industry. If they are coupled together with provisions to ease the flow of credit and reduce foreclosures, we could see an immediate and dramatic turn-around in real estate.  Some feel that these provisions represent real economic stimulus. They will put money in the hands of millions of homeowners, increase sales, stabilize home values and add more revenues to local communities in the form of property taxes.

Why not contact your senators and representatives to let them know that you believe these provisions are essential.  You can go to the official Senate and House web sites to locate the email and phone number of your legislators.  Thanks!


Are You Still Living In A Bubble?

by Buddy Frey

I find it fascinating as we at Buddy Frey & Associates and at Keller Williams Realty here in Charlotte, NC, show that real estate in many areas is still overpriced. I think we would all agree that Charlotte area property prices have declined, yet so many homeowners (and their agents) are still living in a bubble. Their homes and condos are priced too high.

Why? Why is it so darn difficult for a seller to come to terms with the reality of what their home is worth? Why do we all view a home differently than any other investment?

What do I mean by that?

If you bought Yahoo stock at its high of $108 per share and had to sell today, you would understand that you could sell your stock for something like $10 per share. You might be disappointed to take the loss but if you HAD to sell you certainly wouldn’t price it at $20 per share — especially if you thought prices would continue to go down. You would feel lucky to sell it at $10 per share. In other words, I doubt you would tell your stock broker “I don’t care that it is only worth $10 per share today, I have over $100 invested in that stock and I need that money to pay off my credit card.” Your stock broker without hesitation (except for a quick laugh) would let you know that the market does not care how much you paid for the stock; the market does not care that you need the money you have invested to pay off your credit card. A buyer will pay the market value of that stock. They will pay the $10 per share.

And so it is with the housing market. A home is an investment. And the fundamentals of investing and economics apply. In a declining market, a buyer is always looking for the best value – they are looking for the “deal”. We accept this principal with other investments, so why is it so difficult to accept with regards to the value of our homes?

Yep. The cold reality is that buyers don’t care. They don’t care what we paid. They don’t care what we invested in our special curtains and upgraded ceiling fans. They don’t care about the time we invested in our flower garden. They don’t care we need that additional ten grand to buy our new house. They are indifferent that we are taking a loss. In any market, a buyer only cares about their situation which requires finding the best house at the lowest price. In a declining market like today, the ‘lowest’ price is the home with a ‘deal’ price attached. Bottom line: Buyers do not buy overpriced homes in a declining market.

I urge you as Charlotte area property sellers to consider your home or condo like a piece of stock on the Nasdaq. Check in with your self and make sure your identity is not wrapped up in your home. And then ask yourself, “What would a buyer pay for this investment in this market?”

Those of you who really want to sell need to ned to take a hard look at the market and make some decisions.  Spring is right around the corner and it might just be the best time this year.

Thank you to Kristinna Wise in Austin, TX for this content  :-)


4.5% MTG Rates WOW!

by Buddy Frey

Well, we finally got to 4.5% on a conventional, 30 year fixed mortgage.  This recent move downward in rates seemed to begin shortly after President Elect Obama outlined his stimulus package. And today's push clearly is in reaction to the jobless claims number reported early this morning.

Quoting an article written this morning in the Washington Post, " President-elect Barack Obama seized on today's report that the economy lost 524,000 jobs in December to renew his call for quick action on a large economic stimulus in order to prevent the economic situation from worsening significantly."

"Clearly, the situation is dire, it is deteriorating, and it demands urgent and dramatic action," Obama said, noting that the economy lost jobs in every month last year, with 2008's total job losses amounting to 2.6 million, the biggest drop since World War II."

"What we can't do is drag this out, when we just saw half a million more jobs lost," Obama said. "You know, the American people are struggling. And behind these statistics that we see flashing on the screens are real lives, real suffering, real fears. And it is my job to make sure that Congress stays focused in the weeks to come and get this done. And I have every expectation that we will get it done."

Yes, many people believe that a big part of the stimulus package will include supporting the housing market...or supporting those who own homes and are having trouble making the payments.  I have to agree.  But the housing market as in all other markets has its up and downs.  And if you believe in the in a free economy, it too will straighten out and bounce back over time.  The bond market is telling us at least for today that it may take a bit longer for this recovery and rates need to go lower to help the healing process. 

Some of us feel the housing market has already bottomed due to increased activity and why not?  We may remain flat for a bit but the activity has for sure picked up since the Fall.  The cost of money is pretty darn cheap right now, there's plenty of value...folks at least have to take a look at what's out there. 

So, are mortgage rates heading lower...are home prices heading lower, maybe.  But at 4.5% either you're buying or refinancing.  And this, is ALL GOOD!



Is The Media Getting Bullish On Real Estate?

by Buddy Frey

The New York Times ran an article recently (also featured on Yahoo! today), entitled: "Maybe It's Time to Buy That First House".  The article covers low interest rates, home price declines, foreclosure (REO) inventory, and a number of other factors, as positive considerations for first time home buyers.  They urge them to keep in mind the current real estate environment and suggest that perhaps now was a good time to start turning back toward real estate as a personal investment and a place to live.  Rather than trying to time the bottom that is perhaps approaching, no time is better than the present.

Obviously, no one knows for certain what the future holds, and this is a consideration that depends a lot on local market conditions. But, it sure is nice to see something in the headlines other than how bad real estate conditions are.

In Charlotte and Concord, I know that the slide has slowed and a definitive bottom may be just around the corner.  But, as I have talked about in the past, with interest rates and prices down to levels not seen in some time, and the downside greatly reduced, the opportunities out there right now in the Charlotte real estate market are definitely worth taking a look at.  This is true for 1st time home buyers, investors and hey, why not mom and dad a property for your special college kid?  Either way, you get a tax write off at worst...and or asset apprcecation at best. 

Positive coverage of real estate -- provided that it is realistic and provided by those with knowledge of local real estate market conditions -- could well spark some renewed interest going into early spring.  Those who are looking NOW in and around the Charlotte area, may be looking at the best prices of the year.


Displaying blog entries 1-5 of 5

Each Office is Independently Owned and Operated