North Beach Sun Articles

Writing about real estate in the North Beach Sun has been a passion of mine for years. Here's a small exerpt from this winter's edition.

Recently I could not believe my ears when a local Realtor called this market the good old days. These days are the good old days?! Are you kidding me? Prices have come down, we still have many distressed properties and lending has become somewhat trickier. How can anyone call today the good old days? Confronting him about this outrageous comment gave me a new more positive perspective on today’s market.

You can read the entire article at the below link:
http://www.northbeachsun.com

The numbers are up!

Agents have been talking about increased activity for months. We now finally have concrete data showing that increase. Not only were Outer Banks MLS sales agreements up 30% compared to September of 2008 but also it was the best September for sales agreements in the OBX MLS since 2005. October is also looking strong. As of October 20th, there were more sales agreements this year than any year since 2006. The 2006 sales agreement number is likely to be surpassed before the end of the month. Check out the complete monthly summary at http://www.scottrealtyobx.com/files/obxmarket102009.pdf

Market Turn Around?

Sales agreements from April through July were about even compared to the same time period in 2008. August saw the first real increase in the number of sales agreements in the local MLS. In 2008 there were 131 sales agreements, this year it looks like the number will come in above 140. Last fall was also extremely slow due to the uncertainty of the economy. Unless we have another major event, it looks like this fall will be much better! We're a long way from a return to a seller's market but it is nice to see our market trending towards better days.

Observations on 2009 Sales

Definite trends have emerged in the sales during the first half of 2009's real estate market. Similar to the later part of last year, bank owned properties are a large part of the business. Over 23% of all sales through the local MLS were bank owned properties. Our market has now seen the emergence of short sales. Over 7% of all sales in the MLS during the first half of 2009 were listed as potential short sales. In the spring of 2008 most buyers did not even know what a short sale was. This means that close to a third of all properties sold were distressed. It looks like the majority of buyers still do not want to spend the time fixing up a distressed property. To compete sellers should have their property in tip top shape and priced right.

Sales Agreements Increase in June

Preliminary numbers show a slight increase in sales agreements for the month of June compared to June of 2008. Most years show a signficiant decrease in sales agreements in July. This is a difficult month to view homes because many are rented and often times buyers do not want to travel here on the turn over days. It will be interesting to see what this July brings since interest rates are so good and good values seem to be coming out of the wood work now.

Short Sale Frustrations

Back in the first part of April, we had an offer on a short sale home accepted by the seller. It was immediately passed on to the lender for their approval. As of yesterday June 22nd, we still had no response from the lender. We have not even received a time table from the lender. I don't blame the listing agent, he seems to be diligently working to get a response. Sure the lender needs time to make sure they get as much money out of the transaction as possible but you think they would be able to do that in less than 11 weeks. As long as my client wants to stay involved we'll continue to regularly call the listing agent for updates. Hopefully the lender will respond soon.

Celebrating 20 years in real estate!

I graduated from the Harvard Extension School at Harvard University in Cambridge Massachusetts in June of 1989. Three days later I was working full time as a Sales Associate for a real estate company in Nags Head. It has now been 20 years working in the Outer Banks real estate sales industry! Those twenty years have flown by and some great things happened during that time including being the Outer Banks Realtor of the Year twice, being President of the local Realtor association and writing a book on real estate. Who knows what the next twenty years will bring but one thing is for sure and that is I'll be helping people improve their lifestyle through homeownership on the Outer Banks.

Interest Rates

Besides discounted prices, buyers today are making buying decisions based on great interest rates. Last week Margaret Wells at OBX Bank quoted a 30 year rate at 4.625% with three-quarters of a point for an origination fee. Since then rates have come up a little. Today she quoted the rate on the same type of loan at 5.125% with one point for an origination fee. What was the reason for this quick jump in rates? It is beyond my limited knowledge of economics but some people believe the high demand for the low rates caused the increase. Others believe it was because of recent federal government actions. One thing I do know is that rates can not get much better and when they go up it will have a huge impact on buying power. If you are seriously thinking about buying over the next few years, now may be as good as it gets.

Outer Banks Foreclosures

Foreclosure sales represented approximatley 25% of the transactions that occurred in the local MLS system for the first four months of this year. That number was only 10% for the first four months of 2008. Owners of foreclosed properties are surprisingly aware of market conditions. Besides having multiple opinions of value for each property, most also receive monthly updates of showings and activity in their market segment. Many of these foreclosure sellers, (or managers of foreclosed properties), use this information to determine the minimum they will accept for a property. It is common for the bank to counter an offer close to asking price on their property if it is getting a large number of showings. On the other hand, if a bank is not getting much activity on a property, they reduce the price faster than the average seller. Over the past year this has caused our prices to go lower.

IT'S OFFICIAL!

April will be a month with more contracts than April of 2008. Throughout the Outer Banks agents are talking about an increase in inquiries this spring. A few things still have to happen before prices rise. First, this statistic must continue for a signficant period of time. One month does not make a trend. Second, we must sell off the some of the current supply. Some markets still have years worth of supply available even at the current pace of properties selling. However it sure is nice to report something good about real estate for a change!

Is the market turning?

One of the market indicators I track at least once a month is the number of contracts written in the local MLS system. For the last five years, I have been tracking how many times a month a buyer and a seller have agreed on a price. If you've seen the market report in the window at Scott Team Realty you have seen this chart. As of this morning we are only 13 contracts shy of beating April of 2008's total number. This should certainly happen in the next few days. When it does, it will be the first month since August of 2007 where more contracts were written than the same month in the prior year. In a couple months we'll know if this was a fluke or the beginning of a market rebound on the Outer Banks. I have my finger's crossed!

Short Sales Continued

Having patience is the key to a successful short sale. Probably the most common reason for a short sale falling through is the buyer getting tired of waiting. Paragraph 3 of the short sale addendum to the offer to purchase approved by the North Carolina Association of Realtors and the NC Bar Association allows the buyer to void the contract prior to the lender's approval.

One plan of action a buyer may employ in today's market is to write an offer on a short sale property while watching the remainder of the market. If another acceptable property comes on the market, then they can void the contract on the first property and go after the second.

More On Short Sales

Last week's educational semiar on foreclosures and short sales was very informative. Probably the most important thing I learned about these distressed sales is that there is very little that buyers and agents can count on. No two transactions are handled the same by the lender. Compound that with the fact that there are numerous lenders and local Realtors are beginning to understand that flexibility on our part and the part of our buyers is crucial to any successful sale. My most recent example of the necessity of flexibility is a contract on a short sale in Corolla. The seller signed the contract almost three weeks ago. This one had been under contract with another buyer before so I thought that we would be able to get a quick response from the bank. We are still waiting for approval from the bank's negotiator and then it still has to go through the approval process with a board of bank officials! Flexibility is the key to a successful short sale.

Short Sales

More properties today are being sold as short sales. I've written an article in the upcoming North Beach Sun about this new type of sale that is becoming more and more common. Here's a small exerpt from the article:

What is a short sale? A short sale occurs when a property’s net market value is less than the loan amount and the seller will not pay the difference at closing. For example, if a seller will net $500,000 on the sale of his/her property and the loan balance is $600,000 then they are $100,000 short. Besides the seller bringing $100,000 to closing there are two common ways to get this property to close. The bank can lend the seller the difference owed or the bank can take a loss. Having this third party involved in the sale complicates things because the bank may have different interests than both parties.

The local Realtor association is having a educational meeting this Friday to help agents get a better grip on this subject. They asked me to moderate this meeting and I am sure I'll learn more about short sales there. I'll be sure to post what I learn next week.

Welcome!

Thanks for visiting my blog on Outer Banks real estate! This business changes all the time. Even though I have been in the real estate industry here for almost 20 years I still learn something new almost every day. This purpose of this blog is to help buyers, sellers and anyone else with their real estate needs here.