:: Inner Banks of North Carolina - Record Low Lot/Land Prices.
:: New Low! 30yr. fixed-rate mortgage averaged 4.71%
Inner Banks of North Carolina - Record Low Lot/Land Prices.
Has the period of expansion already begun?
The Neuse River area land and lot average sold price for the month of November was at a historic low level. The information gathered to make the graph you see comes from the Neuse River Board of Realtors database of sold lot and land properties.
Are the prices going to keep dropping? No, I don’t think so and here’s why.
Expansion – Equilibrium – Decline – Absorption. These are the four stages of a real estate market. The time to buy is in the cycle of absorption. And never had the absorption rate been so high as in the November of 2008, according to the Crystal Coast Board of Realtors.
The Absorption Rate is a measurement of a market’s ability to sell of its inventory. This takes into account the current active inventory, the amount of sales over a specified time period. In other words, If you take the rate in which properties come on the market for sale and the rate in which properties go off the market as sold-How long will it take to sell off all of the inventory.
In a “normal” stable market it takes about 6 months to sell off a property. That’s why listing agreements are (or rather were) for 6 months.
Marc Stephan Garrison, founder of the National Association of Real Estate Investors says, “All real estate exists in one of four-cycle stages and that would be Expansion, Equilibrium, Decline, and Absorption. I invest, and take investor clients, into absorption markets.
In November of 2008 was the peak for the over-all glut. The housing market had a 33 month supply of inventory and the land/lot market had a 454 month supply of inventory. No-That wasn’t a typo-Land/lot absorption was at almost 40 year supply.
The absorption rate for November 2009 has fallen tremendously. It is down by about 2/3’s of what it was the year before. This means that sales are climbing and in turn means prices will start to climb too.
Is this the beginning of an expansion period? Could it be that the 2003-2005 real estate gold rush is about to repeat in 2010? No one can answer that for sure. But I would highly encourage everyone to take a hard look at the opportunity that is currently presenting itself.
By Bill Hitchcock
North Carolina Real Estate Nationally Ranked!
The trials and tribulations of the real estate market have been a national news feature for some time now. But not all real estate markets are bad. Take for example North Carolina. The Tar Heel state continues to rank high in where people want to live and extremely low in foreclosures.
N.C. ranks as the sixth most popular state in the nation when it comes to where people want to live, according to a recent Harris Interactive poll.
National foreclosure rates soared in the third quarter, with one in every 136 homes going into foreclosure. North Carolina, however, had the 14th-lowest foreclosure rate in the nation, with one in every 417 homes going into foreclosure.
N.C. continues to top a wide range of rankings. In October alone, Asheville was named among the top 10 best affordable places to retire; Durham was predicted to be one of the top cities to post a big rebound; and Raleigh was named one of the top locations for newcomers.
New Low! 30yr. fixed-rate mortgage averaged 4.71%
Long-Term Rates Set Another Low in Freddie Mac Weekly Survey
McLean, VA – Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey® (PMMS®) in which the 30-year fixed-rate mortgage (FRM) averaged 4.71 percent with an average 0.7 point for the week ending December 3, 2009, down from last week when it averaged 4.78 percent. Last year at this time, the 30-year FRM averaged 5.53 percent. The 30-year has never been this low since Freddie Mac began its weekly survey in 1971.
The 15-year FRM this week averaged 4.27 percent with an average 0.6 point, down from last week when it averaged 4.29 percent. A year ago at this time, the 15-year FRM averaged 5.77 percent. The 15-year FRM has never been this low since Freddie Mac started tracking it in 1991, and breaks the record low set last week.
The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.19 percent this week, with an average 0.6 point, up slightly from last week when it averaged 4.18 percent. A year ago, the 5-year ARM averaged 5.77 percent.
The 1-year Treasury-indexed ARM averaged 4.25 percent this week with an average 0.6 point, down from last week when it averaged 4.35 percent. At this time last year, the 1-year ARM averaged 5.02 percent. The 1-year ARM has not been this low since the week ending June 30, 2005, when it averaged 4.24 percent.
(Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage.)
“Interest rates for 30-year and 15-year fixed-rate mortgages fell for the fifth consecutive week to an all-time record low while the average rate on 5-year ARMs hovered near its record set in the previous week,” said Frank Nothaft, Freddie Mac vice president and chief economist. “In addition, interest rates on 30-year and 15-year fixed mortgages thus far in 2009 averaged one percentage point below their respective average in 2008.
“Low mortgage rates and the cumulative decline in house prices have contributed to an extremely affordable housing market and helped spur home sales this year. For instance, total new and existing home sales in October were 36 percent higher than their January low on a seasonally adjusted, annualized rate, according to the U.S. Census Bureau and the National Association of Realtors® (NAR). The NAR also reported that pending existing home sales rose for the ninth straight month in October, representing the longest consecutive gain since the series began in 2001, according to the National Association of Realtors. Seven of those months were the most affordable on record dating back to 1971, based on the NAR’s Housing Affordability Index.”
Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation’s residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters.
United States Real Estate Confidence Index Hits New High in November
RISMEDIA, December 3, 2009—Real estate professionals in the United States sent Point2 Technologies Inc.’s forward looking Real Estate Confidence Index (RECI) to new highs in the company’s November 2009 survey of 2,000 real estate brokers and agents nationwide.
A 7.87% jump in confidence signaled renewed optimism and more positive sentiment amongst real estate brokers and agents across the U.S., with the RECI recording a new high of 6.03 on the 1-10 Index scale (1 being “bad” and 10 being “good”), in a dramatic reversal that follows October 2009 results which saw the industry’s forward looking sentiment gauge dip to an all time low of 5.59 after two months of increased uncertainty about the future of the real estate market.
With a more overall positive tone underlying commentaries offered by real estate brokers and agents in the majority of U.S. markets and who participated in the Point2 survey, improved sentiment took all three RECI Index components to new highs.
The Current Sentiment, which measures real estate professionals’ opinion of present market conditions, moved up 0.27 points to 5.16, a 5.52% increase versus the October reading of 4.89 and a 1.98% improvement versus the Index variable’s most recent high of 5.06 on the scale, recorded in September 2009.
At 5.96 on the 1-10 scale, the forward looking Short Term (3-6 months) Optimism/Pessimism gauge saw the largest improvement amongst the RECI’s three variables, increasing 10.99% versus the prior month’s reading. The 3-6 month outlook barometer’s November results are also its highest since registering 5.80 on the scale, in August 2009.
Long Term (12-18 months) Optimism/Pessimism also reached a new high, increasing 0.47 points versus October, or 7.22%. The Long Term Outlook’s previous high of 6.88 was also recorded in August 2009.
