In today’s ever-changing economy and real estate market, we are seeing three trends affecting Brunswick County home sales, according to Charles Blake with Port Realty. First the good news, interest rates are remaining low. However, home prices are going up, and inventory is low which in turn offsets the good news.
Let’s look at all three trends and how they affect purchasing a home.
Low Interest Rates
Over the past 48 years, interest rates on the 30-year fixed-rate mortgage have ranged from as high as 18.63% in 1981 to as low as 3.31% in 2012. According to Freddie Mac, mortgage rates today remain at historical lows, with over 60% of mortgage holders paying rates between 3.00% and 4.90%. Charles Blake, owner of Port Realty received his real estate license in the early ’60s. He would agree that interest rates are at an all time low. Low interest rates allow buyers to have a higher budget when shopping for a home. They can spend more on their property while still keeping the monthly payments within their desired budget. For example, if rates were high, the buyer may opt for a $200,000 house to have comfortable payments. However, with low interest rates, the buyer can purchase a $250,000 property and still be in the same monthly payment budget.
Home Prices Going Up
When interest rates are high buyers, tend to be cautious when it comes to purchasing a home. They know they will be getting less of a house and spending more money each month on interest than they are on principal payment. So with this negative reaction, fewer people are purchasing homes. With less demand, the home prices drop. However, it’s just the opposite when the interest rates are low. When rates are low consumers believe it’s time to buy. Therefore more buyers are shopping and home prices seem to soar, due to supply and demand. Real estate agent, Randy Wilson of Port Realty reports, six months ago he was working with a couple that was considering purchasing a vacant lot on the popular vacation island of Oak Island, NC. Recently the couple returned, ready to buy, but found the land had almost doubled in price. In this low interest rate economy, a buyer must move fast to keep from paying more.
Currently, with the low interest rates, home buyers are ready to purchase. The buying power has caused a shortage of homes to choose from in most markets. So one might say it is a seller’s market. Buyers are competing for homes, and they are even willing to pay more than asking price. The sellers can even afford to be picky as to whom they choose to sell their home too. For instance, if two offers come in for the same price, a seller may want to accept the offer of the buyer with the best credit or the buyer who is more financially secure and has a better chance of obtaining a loan. Advice to the buyer, If you find a home you want, act quickly and make a strong offer to get the sellers attention.
The bottom line, find a real estate company such as Port Realty who can help you maneuver through the buying and selling process. Randy Wilson, Charles Blake, Howard Diaz, Tom Sherman and Tom Caudill are all realtors with Port Realty in Southport, NC. Each of these men and have been in the industry for many years. They are experienced, professional and ready to assist you in finding or selling your next home.