When's the right time to buy? NOW!

I know you probably hear this kind of talk from real estate agents all the time, but I'm going to give you solid evidence as to why right now is a great time to buy real estate in the beautiful mountains of Western North Carolina, specifically Henderson County.

A friend of mine who is also a broker in Hendersonville just did what's called a Market Absorption Rate report to determine how much real estate has been selling in Henderson County, and based on that, how many months of inventory we currently have on the market. Before I give you the information, please let me ask you to keep in mind that as a general rule of thumb, 6 months of inventory is considered a balanced market. Anything under is a seller's market and anything over is a buyer's market.

So here's the info for Henderson County, North Carolina:

For properties classified as residential in the last 12 months there were 1,358 closed transactions. Based on that figure we have 9.96 months of inventory currently on the market.

In the last 6 months there were 510 closed transactions. Based on that figure we have 13.26 months of inventory currently on the market.

In the last 3 months there were 202 closed transactions. Based on that figure we have 16.74 months of inventory currently on the market.

"Months of inventory" is figured by taking the number of properties currently on the market and dividing it by the average closed transactions per month based on your specified time period... 3 months, 6 months, and 1 year, in this case.


So as you can see, especially based on the last 3 months, buyers have the extreme upper hand around here. This does differ based on what price range you're looking in, of course (if you're looking at $500K properties your leverage will be better than if you're looking at $200K). But anyway, if you've been thinking about buying in this area, and have the means to do so, please come on out here and see me! Most motivated sellers here will consider all reasonable (and in some cases, unreasonable) offers!!

Rate Reductions Galore!!

I received this email from our in-house mortgage person and I thought I would share:

Historic Fed Move Cuts Both Ways for Borrowers

Hot on the heels of its surprise inter-session rate cut of 75 basis points last week, the Federal Reserve cut key interest rates again, the fifth straight cut since September 2007. In its statement last week, the Fed said it had decided to cut the federal funds rate "in view of a weakening of the economic outlook and increasing downside risks to growth." In other words, economic data suggests the US is on the brink of recession, and the Fed is acting accordingly.

Who benefits from this cut?

If you have a loan that is directly tied to the Prime Rate, you will see an immediate benefit. Home equity lines of credit (HELOCs) and variable rate charge cards are the types of loans that will have an interest rate reduction on their next statement.

What does this mean for long-term rates?

Long-term mortgage rates, the lowest we've experienced in years, could actually increase after today's cut, based on historical performance and recent trends.

So if you're waiting for long-term rates to fall further, don't count on it. Your best chance to lock in the lowest rates since 2005 is now. Getting your application in process now will allow you to capture a great rate before it's too late.

What REALLY moves mortgage rates?

Fixed-rate mortgage rates aren't directly tied to Fed interest rate moves. Instead, they tend to follow in the direction of other long-term government bond yields, such as the 10-year Treasury, which historically moves in accordance with the economic outlook and in advance of Fed actions. The performance of Mortgage Backed Securities, issued by Fannie Mae and Freddie Mac, is what really determines long-term mortgage rates.

How does the economic stimulus package fit into the picture?

The economic stimulus package from Congress and the White House could be a double-edged sword for borrowers. Combined with recent Fed actions, the package could create inflation and bring about higher long-term interest rates.

On the positive side, conforming loan limits are likely to be raised from the current $417,000 to upwards of $625,000. This means great potential savings for purchase and refinance candidates who live in 20 high-cost areas across the country.

What should you do next?

If you're unsure how the rate-cut or the proposed legislation affects your mortgage, don't worry, you're not alone. There's no one-size-fits-all answer. Give us a call right away. We'll review your mortgage and see what, if anything, can or should be done to make the most of your individual financial goals and needs