Crystal Coast Real Estate: Buy when no one else is!
Crystal Coast Real Estate Opportunity Missed
By: Bill Hitchcock
“The best buying sign there is, is to hear a seller bemoaning the market conditions” Buyers buy at the worst time. Buyers should buy when times are the worst. OK, that’ll bend your mind a bit-So let me explain.
Buyers tend to buy when everyone else is buying. This is the worst time to buy in that it favors the seller. Prices rise and terms and conditions are usually strict. When no one is buying, inventory increases, days on market increases, prices drop and sellers negotiate down to the buyers favor.
Moral of the story: Buy when no one else is!
2005 was the biggest and best year for real estate sales ever along the Crystal Coast. There were a total of 2,153 homes and 430 condominiums sold that year, more than any other year. And never before or since have sold prices been so high. The average sold price for a residential property in 2005 was $288K, for a condo it was $298K. 66% of every home listed in 2005 year sold.
2008 has been the worst year on record for home sales. Only 17% of all homes listed have sold. Active listings, (properties for sale) have been the exact opposite. In 2005 there were a total of 3,258 active listings. By mid-June of 2008 we had already reached 99% of that number-3,221. The average sold price of a home in 2008 is 12% less than in 2005 ($254K vs. $288K) The 2008 Crystal Coast real estate market offers inventory, more choice, all at a lower price.
This should make for a fantastic buyer’s market, right? Then why aren’t buyer’s buying? Could it be the interest rates that have prohibited folks from purchasing?
According to HSH Associates a 30 year fixed mortgage rate in 2005 averaged out at 6%. By mid-June of 2008 the average annual national rate was slightly above 6.4% Interesting to note-2005 did see more conventional loans and cash sales, but 2008 as seen far greater VA Loans.
What about foreclosures? This is something we hear about almost on a nightly basis from all major news outlets. According to Realtytrac.com the 2008 first quarter rate of foreclosure nationally is 1 out of every 194 homes. In North Carolina that rate is 1 in every 392. For the Crystal Coast and surrounding Neuse River area it is less than 1 in every 2,000 homes. Foreclosures are not an issue.
So why aren’t people buying? Simple-Attitude and perception. A real estate market is determined to be good or bad solely from the sellers prospective. When prices and sales are down it is presented as a bad time for real estate. This only helps to perpetuate the bad market in that it discourages buyers from buying. The best buying sign there is, is to hear a seller bemoaning the market conditions. This fact has not escaped all buyers. Late spring/early summer saw 30 day time periods where as much as 24% of all sales were cash. This is not only an indication of the liquidity of the Crystal Coast buyer, but of the buying opportunity this area presents.
Back To The Future! Folks, sometime soon the market will revert back to the sellers favor. Although it will be “vogue” (is that term still used?) to buy, it may not be the most financially advantageous time for you to buy. Right now is the time to buy.