Real Estate Blog Asheville, NC

Hi everybody, it is been a couple of weeks since my last entry.  I haven’t written anything because I was waiting to see where all this economic turmoil is going.  The really short answer is nobody knows.  However, to expand upon that just a little bit I will share with you a conversation I had was some clients just the other day.

I was on a listing appointment with a residential client and they ask me my honest opinion of where things stood.  This wasn’t my verbatim response that it went something like this:

Currently our real estate market is suffering however since we are in Asheville, NC real estate market we’re not as bad off as say South Florida.  Primarily what we’re going to see in the market at least through the second quarter of next year are the bloodsuckers; defined as people with the ability to purchase at extremely discounted prices.  Somewhere moving into the third to fourth quarter of next year we should see a slight turnaround in the Asheville real estate market.  So, at the time we listed the property for one month during the fall, for leaf season, and then we will remove it for the winter.  We will then place it back on the market somewhere late spring to early summer of 2009.

However, after seeing what has happened over the past 72 hours and some of the conversations I have had makes me wonder if our turn around and slow painful recovery is not further out.  While our market in Asheville is surviving it is still starting to show some battle scars.  I honestly feel that this recent bailout OK OK not a bailout but a gov’t loan program will be hardly felt by main street.  The main benefactors of this move of course is wall street.  While the fed buying up all of these crappie assets provides money for the banks to start loaning money to each other it does nothing to make it available to the average Joe.  Let’s face it if you do not have a FICO score a ball of 700 and a job history that is long and illustrious YOU DO NOT STAND A CHANCE of getting a loan!!!!  So, while the overall economy may keep moving the future health and prospects for real estate in Asheville are going to be tight at least for the next year to year and a half.

However, the one bright spot in the real estate in Asheville is the green industry.  While conventional stick built construction and sales of preexisting homes seems to be slowing somewhat it appears as though healthy built/LEED certified homes are selling well.  So, the economic turn down is going to have some affect on the green industry, but I feel it will outperform the traditional real estate and construction industries by a long shot.

Brian

Well, as I mention this morning it appears as though the 30 year fixed interest rate has been dropping all day.  On my website at www.carolina-mountain.com there is an interest rate ticker on the side menus that show a real time reflection of the national average on varying interest rates.  As I worked on the website today I kept noticing their rates declining little by little.  This morning the interest rates were in the low six’s, as of this post they are now listed at 5.92.  Maybe, the seizure of Fannie Mae and Freddie Mac by the fed on Sunday will help suit are troubled real estate markets.

Brian

Anyone who follows the financial markets and how they directly relate to real estate, must have been relieved by the Feds takeover of Freddie Mac and Fannie Mae.  All summer long the financial markets have had a nervous eye cocked towards the two mortgage industry giants.  As the backer of almost half the mortgage debt in the United States the collapse of these two companies would have almost certainly created a bigger hole for real estate to continue tumbling into.  Below I have attached links to pdf files which have the CNN monies stories on this topic.

fed-seizes-fannie-and-freddie

Effect of Fed Seizure on Mortgage Rates

So, what does this mean for the Asheville, NC real estate market short term?  As alluded to in the CNN money report, the short term effect could be a possible lowering of the 30 year fixed interest rates, but there’s something more important at stake.  That’s the availability of lending.  Without the two mortgage industry giants purchasing and repackaging mortgages on the secondary market, the primary lending institutions would almost cease to function because the flow of money would cease to exist.  So, the fed’s seizing control of Fannie Mae and Freddie Mac should stabilize the mortgage industry in the short term.

As of 8:00AM Monday morning that news of the fed’s move has mostly been received positively.  Markets in China and India as well as other foreign markets have all had a positive reaction to the news and have postage sharp gains.

Personally, I feel that the move by the fed was positive for the mortgage industry and the real estate markets for the simple fact that there will still be some lending available in the market.  While that lending is going to be very hard to get even for those folks with stellar credit ratings, at least there will still be some available.  On another issue, I feel it is absolute bull that the taxpayers should spend one red cent helping the CEOs and the other heads of these corporations.  These crooks, while their being replaced, are still going to walk with millions of dollars.  I personally feel that these SOB’s should be held personally accountable for benefiting from the profiteering and risk taking that they allowed their companies to orchestrate which set the stage for the collapse of the real estate market.  While this will never happen, I think it sends a pour message to the rest of corporate America that if they fail in their attempts to fleece their own pockets the U.S. taxpayer will come in for the rescue.

That’s how I feel, how do you feel?

Brian

I wanted to post a real quick note to let those of you who haven’t refinanced or are home shopping to GET IN THE GAME!!!  I have attached a  little email message I got from a lender today.

The bond market has moved below the 200 day moving average for only the 3^rd time in the past 3 years! When the bond market suffers, so do interest rates and you begin to see them climb. We have already seen this since late last week!

Reports are saying we are beginning a shift in the market towards higher interest rates!

That being said, If you have been thinking about a refinance or purchase but haven’t locked in yet, NOW IS THE TIME before rates get any worse.

Call or e-mail me ASAP for current pricing!

Thanks!

Joseph Wahl

Mortgage Specialist

The little ticker on the right hand page of my website www.carolina-mountain.com jumped .12% on the 30yr fixed in just 36hrs.  We all knew this was going to happen, just not so soon.

Brian

Well it has been a while since my last post so I thought I would take just a second for a couple of updates:

1) Well the Super Wal-Mart and Lowes in Weaverville is finally back underway.  After some wrangling with local utilities companies it appears as though the developer of this project has finally gotten back underway putting to rest the rumor mill that had reported the developer as being bankrupt.  It appears that the rumor was nothing more than ill informed locals.  I personally look forward to having the shopping amenities in the area north of Asheville.

2) It appears as though we are finally starting to see some drop in the 30yr fixed mortgage rates.  After months of steady increases we are finally starting to see rates right at 6% or just a little under.  While is not having an effect on home sales, the new rates are at least helping many refinance their homes into locked interest rates.

3) Fannie Mae and Freddy Mac have finally been given a need shot in the arm from the fed, fannie-rates-reduction.pdf, and have also lowered their rates and amount of down payment needed in an effort to prop up the ailing Real Estate markets across the country.

4) And miracles of miracles,  Mars Hill has voted in alcohol sales.  For the first time ever we can go to the local store and buy either beer or wine!!!  It will be interesting to see what effect this has on the area, but everyone I have talked to seems very excited about the prospects.

5)Also in Mars Hill news, Ingles is slated to open the doors on its new grocery store in about 10 to 11 months.  This another huge boost for locals who have been suffering with a woefully inadequate store for many years.  Thanks Bob…..

Just a couple of thoughts as sit and watch the SNOW coming down here in Madison Co. 

Brian

Folks its getting ugly if you have a home to sell.  Generally that would mean good news for home buyers.  However,  if you do not have good credit you may not be able to find financing, because of the turmoil in the mortgage markets.  The following link has the latest article on what is proving to be a severe stagnation and/or decline in real estate markets: Home Prices Drop.  The article, as with most data, is based on National averages and does not reflect the Asheville, NC market as accurately, but the effects of other regions faltering real estate markets can be felt here.  As of today there are 7,409 single family residences available through our regional MLS system, this of course does not include any of the For Sale By Owner listings.  This number is way up, and I do mean WAY UP.  What does this all mean?  If you have strong credit and are looking to buy, now is a good time or even wait a couple more months and see what happens this winter, because sellers are going to start getting desperate, if not already there.  As home builder I can tell you what it means.  My construction company, Blue Ridge Homes, has stopped all spec building for the time being and has turned its focus on custom only.  Its lean times around our household, because we’re not building as much and as a Realtor sales are sharply off.  At this point all I can do is keep my fingers crossed that our illustrious government and banking institutions do not totally slaughter us with their lack of foresight when setting new policies.

Brian

Realtors See Sales Drop - If you had any doubts, which I could not see how that is possible, that are real estate markets have softened and transitioned trastically from the sellers market of the past couple of years to a buyers market, just read the linked file printed last week in Asheville’s Citizen-Times newspaper.  As a Realtor its scary as hell and I try to take solice in the statements from the Association of Realtors that this trend should level out come the middle of next year, but thats still some time off.  The markets that seem to be the most affected are in the price range of $350K to somewhere around $800K.  I know that my clients who are currently trying to sell for a number of reasons or searching far and wide for a light at the end of the tunnel.  I guess we can only count our blessings that we are living in Asheville and not some of the other markets in the nation that have seen retail values drop close to 40% just to generate activity, with no end in sight.  How are the markets doing where you are from?

First-Time Buyers Blues,  This article found in the August 17, 2007 edition of The Week magazine is a statement on the sorry state of affairs in the nations real estate market.  It seems that the American Dream of home ownership is slipping further and further away as prices continue to climb and as credit for those would-be buyers dwindles.  It seems that for right now as the world markets are in turmoil over sub-prime lending and tightening credit lines that the there is no end in sight.  I know that as a first time home buyer not long ago, who’s credit scores were recovering from bad decisions in my earlier days and a nonexistent savings account, that I would never have been able to be sitting where I am today if I had been buying in today’s markets.  I think it is a sad state of affairs when our own citizens who work hard can not afford to buy the roof over their head.  What do you think?

Brian

The NC Association of Realtors has been fighting a new proposed tax on the sale of your home.  I just wanted to bring everybody’s attention to it.  Please CLICK HERE to go to the Associations website concerning this issue.

Brian

This PDF file: US Economic Outlook Through 2008  was released by the National Association of Realtors and shows interest rate trends along with other economic indicators throught the fourth quarter of 2008.  While I think the real estate markets in and around Asheville, NC will fair slightly better, this gives the markets a little cause to feel like things might turn around.

Brian