Current Myths About the Housing Market
9 MYTHS ABOUT THE CURRENT HOUSING MARKET
Myth 1 - High-to-low home price declines have been about 20%. Nope.
The measurement of home price declines can be misleading. It depends on which homes in which markets are being measured. There are some indexes that indicate home prices are down 20%. Theses indexes are heavily weighed toward homes with sub-prime loans and other distressed home sales. These troubled homes have experienced a steeper decline than home prices in general. Both government data based on loans backed by Fannie Mae and Freddie Mac and data from the National Association of Realtors suggest much more modest price declines. If you're selling your home, the best thing to do is price your home right.
Myth 2 - The smaller number of new homes under construction indicates a dismal outlook for the housing market. Incorrect.
The inventory of homes on the market is very high, so the last thing we need now is more new homes being built. Home builders have cut back sharply on production, which will help lower inventories and stabilize prices. With many new homes completed but not sold, you can find great deals.
Myth 3 - When the housing market recovers, home price growth will be only 4 to 6% per year
The price growth of up to 6% can easily turn into 20 to 30%. Most buyers put less than 20% of their own money into a home purchase; this borrowing power can translate to a greater rate of return. On average, home price appreciation has been about 1 to 2 percentage points higher than consumer price inflation, which translates to up to 6% per year. This growth rate cannot be compared to a rate of return like the stock market, being that most people do not buy a home for all cash. Instead they make a cash down payment & borrow the rest. The leverage this borrowing creates can greatly impact returns. Get the fundamentals right when investing in real estate.
Myth 4 - Impending baby boomer retirements and moves to small homes will cause a glut of homes on the market. Not True.
The first wave baby boomers has reached 60 years of age and the bulk of that generation will soon go into retirement. Contrary to the belief that these boomers will trade down, many are keeping their current homes or moving to properties of the same size or larger. In the future, if the boomers do decide to sell their larger homes, then the rapidly growing U.S. population should absorb the supply of existing homes on the market.
Myth 5 - The federal government takeover of secondary mortgage companies Fannie Mae and Freddie Mac is a bailout that will cost taxpayers bundles.
It's possible that taxpayers may have to cover some losses OR that the government takeover will result in no loss of taxpayer dollars. If taxpayer funds are used, the bailout would be preferable to the global economic problems that would have occurred if Fannie and Freddie had gone belly up. The "bailout plan" is meant for homeowners facing foreclosure. If you would like to know more about the Hope for Homeowners Plan, contact me at your convenience, at (843)907-8787.
Myth 6 - The Federal Reserve controls mortgage rates. Wrong.
What the Fed sets is a short-term interest rate called the Federal Funds Rate. Mortgage rates are determined by global savings, credit spreads and inflationary pressures. Over the past two years, the Fed has raised the Fed Funds Rate to 5.5%, and then cut it deeply to around 2%. All the while, the 30-year mortgage rate has averaged in the 6 to 6.5% range. Today's rates aren't bad compared to the 10% we saw in the early '90s and 17% in the '80s.
Myth 7 - It's the wrong time to buy. Wrong.
All real estate is local. For those who are financially and mentally ready to buy, there has never been a better time to be a buyer. Very low interest rates and a surplus of inventory give buyers an edge. For someone with a long outlook, there is very little worry about home values since homes have historically provided a solid foundation for wealth accumulation. Keep in mind that is also not the right time to buy for everyone. Even when good buying opportunities are presented, someone who is not financially ready shouldn't be forced into joining the rank of homeowners. The decision to become a homeowner requires sacrifices, and homeowners who lose their homes to foreclosure is not good for anyone. Take a good look at your financial status to see if you're ready to buy or move up to a home of your choice.
Myth 8 - It's a terrible time to sell. Wrong.
A seller can get an offer if the property is priced right. In our local market, home sales are steadily increasing. For those looking to trade-up, selling low on an existing home is offset by buying the new move-up home at a lower price. In turn, the price appreciation on the trade-up home will bring bigger bang for the buck. TIP: Homebuyers want bargains in this market. If you price your home much lower than your competition, you might end up with a bidding war.
Myth 9 - More homes are being sold by owners, and real estate agents are becoming obsolete. Nope.
The share of home sellers who choose to go it alone when selling their home has actually decreased to about 12% today. On average, only 4 in 10 say they would sell their next home without the assistance of a real estate professional.
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- MLS#
1218400- Class:
- Land
- Status:
- Active
- Acres:
- 480.00
- Est Lotsize:
- N/A
- # Of Lots:
- N/A
This unbelievably beautiful paradise is located between St Helenaville and Fripp Island, South Carolina, just a few miles from historic Beaufort, t...
View Listing - MLS#
- 900927
- Class:
- Land
- Status:
- Active
- Acres:
- 383.00
- Est Lotsize:
- 383 Acres
- # Of Lots:
- 1
Rare opportunity to own a prime 383 acre parcel in North Myrtle Beach with ±3800 Feet of frontage on the Intracoastal Waterway and over 1.3 miles o...
- MLS#
- 1104403
- Class:
- Land
- Status:
- Active
- Acres:
- 52.36
- Est Lotsize:
- N/A
- # Of Lots:
- N/A
This fully-timbered rectangular site offers 1,083 feet of frontage on Highway 501, running along the tract’s southern border, and additional fronta...
- MLS#
- 908507
- Class:
- Land
- Status:
- Active
- Acres:
- 498.00
- Est Lotsize:
- N/A
- # Of Lots:
- N/A
This land is located in southern Rockingham County, NC approx. 15-20 minutes north of the Piedmont Intl. airport, home of the new Fed EX hub. The ...
- MLS#
- 1210885
- Class:
- Land
- Status:
- Active
- Acres:
- 416.30
- Est Lotsize:
- N/A
- # Of Lots:
- N/A
LOCATION,LOCATION,LOCATION!!! Exceptional property totalling over 400 acres located only six minutes from North Myrtle Beach. Approx 1.3 miles of p...
- MLS#
- 1215149
- Class:
- Land
- Status:
- Active
- Acres:
- 59.18
- Est Lotsize:
- N/A
- # Of Lots:
- 2
Subject property is a compilation of four tracts compiling 69.60 acres with on Highway 501 and Mill Pond Road. This site is cleared of trees and s...
- MLS#
- 1219993
- Class:
- Commercial/industrial
- Status:
- Active
- Present Use:
- Hotel/Motel
- Est Lotsize:
- N/A
- Class-Type:
- Commercial
Exceptional commercial investment located oceanfront in the heart of South Myrtle Beach. Enjoy clean suites and immaculate conditions, outdoor & in...
- MLS#
- 815275
- Class:
- Commercial/industrial
- Status:
- Active
- Present Use:
- Other
- Est Lotsize:
- N/A
- Class-Type:
- Commercial
- MLS#
- 1207758
- Class:
- Land
- Status:
- Active
- Acres:
- 2.80
- Est Lotsize:
- N/A
- # Of Lots:
- 2
Located on the Southernmost tip of private Prince George community in Pawleys Island, South Carolina. Almost 3 acres, this is the most desirable oc...
Virtual Tour - MLS#
- 916895
- Class:
- Land
- Status:
- Active
- Acres:
- 8.58
- Est Lotsize:
- N/A
- # Of Lots:
- N/A
8.58 Acres located directly in front of the proposed town center at Old Robber's Roost Golf Course on North US Highway 17. The property is zone Hig...
- MLS#
- 1100885
- Class:
- Residential
- Status:
- Active
- Beds:
- 8
- Baths:
- 7 Full / 3 Half
- Class-Type:
- Detached
THIS ESTATE HOME IS TRULY A ONE OF A KIND MASTERPIECE OF ART AS WELL AS LIVEABILITY..NESTLED BEHIND GATES ON 3.34 ACRES..5 BEDROOM/5.5 BATH..9700 H...
- MLS#
- 727076
- Class:
- Land
- Status:
- Active
- Acres:
- 14.96
- Est Lotsize:
- N/A
- # Of Lots:
- 1
- MLS#
- 1204154
- Class:
- Land
- Status:
- Active
- Acres:
- 2000.00
- Est Lotsize:
- N/A
- # Of Lots:
- N/A
A hunter's paradise along the Pocotaligo Swamp!!!! This is the complete package with furnished lodge surrounde by Large Live Oaks, horse barn with ...
- MLS#
- 921977
- Class:
- Land
- Status:
- Active
- Acres:
- 229.16
- Est Lotsize:
- N/A
- # Of Lots:
- N/A
Beautiful 229.162 acre tract on Hwy 9 between Loris and Longs. Property is prime for development. Harvestable timber on tract. Approx. 1900 feet ro...
- MLS#
- 1218306
- Class:
- Land
- Status:
- Active
- Acres:
- 1275.00
- Est Lotsize:
- N/A
- # Of Lots:
- N/A
Midway Plantation is an historic 1275-acre inland rice plantation one half hour north of Charleston and Mt. Pleasant, SC. The property is suited fo...
- MLS#
- 810383
- Class:
- Land
- Status:
- Active
- Acres:
- 28.44
- Est Lotsize:
- N/A
- # Of Lots:
- N/A
28.44 acres located on both sides of Cannon road in Myrtle Beach. This acreage also borders Highway 15
- MLS#
- 1213459
- Class:
- Land
- Status:
- Active
- Acres:
- 83.90
- Est Lotsize:
- N/A
- # Of Lots:
- 1
Rare opportunity to own a prime 83.9 acre parcel in North Myrtle Beach located between Barefoot Resort and Waterway Hills Golf Course. Recently ann...
- MLS#
- 1014963
- Class:
- Land
- Status:
- Active
- Acres:
- 0.89
- Est Lotsize:
- 0.89 ACRE
- # Of Lots:
- N/A
RARE DEVELOPMENT OPPORTUNITY LOCATED IN THE TILGHMAN BEACH SECTION OF NMB. EACH INDIVIDUAL LOT IS ZONED R-4/MULTI FAMILY WITH A MAXIMUM HEIGHT OF 9...
- MLS#
- 1111783
- Class:
- Residential
- Status:
- Active
- Beds:
- 4
- Baths:
- 4 Full / 2 Half
- Class-Type:
- Detached
This Mediterranean home steeped in Tuscan tradition is a true masterpiece. The massive double grand doors with custom iron work welcome you to a t...
- MLS#
- 822496
- Class:
- Land
- Status:
- Active
- Acres:
- 11.44
- Est Lotsize:
- N/A
- # Of Lots:
- N/A
This 11.44 acres is near one of the South Strand's busiest intersections. Great visibility. Zoned Hwy Commercial. Good for shopping center, office ...