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.