Rising Interest Rates Could Get Buyers Moving
Rising interest rates may finally push Charlotte real estate buyers off the fence and into the market.
In December, after President Obama agreed to extend tax cuts for two years, the financial markets  indicated this event would most likely push mortgage interest rates higher and, they have.

Analysts predict that buyers will continue moving now that rates are going up and are unlikely to come down.  “Once people see this might actually be the bottom, they’ll go for it,” says Paul Dales, U.S. economist at Capital Economics Ltd.

For an example of interest rate increases, note what happened Q4, 2010:
•    On December 2, the 30-year fixed interest rate hovered around 4.46 percent.
•    One week later, on December 9, it was up to 4.61 percent.
•    On December 26, the 30-year fixed interest rate was up again to 4.875 percent.
Charlotte Foreclosure Rates Fall
Has the real estate market hit bottom?  According to Realty Trac, foreclosure activity decreased dramatically in November with fewer than 300,000 properties receiving a foreclosure notice for the first time since February, 2009.  While foreclosures typically decrease in November, and we’re already begun to see a rebound in foreclosure activity in early 2011, these statistics are not to be dismissed because they show the lowest level of foreclosure activity since November, 2008.  Additionally, both the 21 percent month-over-month decrease and 14 percent year-over-year decrease in foreclosure activity were the highest drops recorded since RealtyTrac began publishing the U.S. Foreclosure Report in January, 2005.
Want to know more about the Charlotte real estate market?  Give me a call or email me to discuss our real estate market.  I look forward to hearing from you.

In response to the initial question – The difference between a foreclosure and a short sale is that a foreclosure is owned by the bank and a short sale is still owned by the homeowner of record. That homeowner is dependent upon the bank(s) approval of the sale of their property for less than what they owe on their mortgage(s). The short sale process can take awhile but, there are different schools of thought as to which is the best to purchase–short sales or foreclosures.

Consider this–Many homeowners who have lost their home to foreclosure, leave their homes angry and tend to stop maintaining or caring for their home, sometimes removing appliances and light fixtures as they are asked to leave their home, and sometimes even maliciously destroying their former homes as they leave the home. Many short sellers WANT to protect themselves from the 7-10 years of bad credit that a foreclosure can bring, therefore they do everything that they can to keep their homes maintained so that they CAN get a buyer and get out from under their mortgage with as little damage to their credit as possible.

Short sales can and often DO take longer than a standard home purchase or even a foreclosure but, the home that you buy, compared to other options (standard resale or foreclosure), can be in better condition and at a great price too.

Buying a foreclosure is easier on you and your agent but, if you have patience, a short sale can be the better investment, oftentimes requiring FAR less rehabilitation for you, as the buyer.

Why was the 203K created?

The U.S. Department of Housing and Urban Development ( HUD ) created the 203K Program to promote and facilitate the restoration and preservation of the Nation’s existing housing stock.

What is the 203K?

The Section 203(k) program is the Department’s primary program for the rehabilitation and repair of single family properties. As such, it is an important tool for community and neighborhood revitalization and for expanding home-ownership opportunities. Since these are the primary goals of HUD, the Department believes that Section 203(k) is an important program and we intend to continue to strongly support the program and the lenders that participate in it.

How is it different?

Most mortgage financing plans provide only permanent financing. That is, the lender will not usually close the loan and release the mortgage proceeds unless the condition and value of the property provide adequate loan security. When rehabilitation is involved, this means that a lender typically requires the improvements to be finished before a long-term mortgage is made.

How is the program growing?

Helen Adams Realty has joined several national players and along with local partners to introduce this program to the Charlotte market.  ReBuild USA and Lowes Home Improvements stores

Helen Adams Realty will be providing consumer workshops to promote all the benefits of this program.  Stay tuned to our blog for more information.

For detailed information visit HUD’s website or contact Helen Adams Realty to talk with one of our 203K Specialists

Seek professionals to assist you: Your team of professionals should include a real estate agent, a home inspector, a contractor and an appraiser.   You often have to be ready to move on a foreclosure home immediately, so establishing relationships as well as setting a plan of action with these professionals ahead of time, is a must.

Set your sights on a short sale (pre-foreclosure): Short sales offer some of the best deals.  The seller is likely to be more willing to accommodate you because they are striving to avoid ruining their credit.  This means you’ll have a much better chance of getting a great deal – something more than the seller owes the bank, but oftentimes less than market value.  As well, the seller may still be in the home to assist with repairs and in general, these homes are in far better condition than other distressed properties.

Forget the auction: While going to foreclosure auctions is certainly another avenue that investors may take, it definitely is not for the beginning investor.  You may find that you’ve done a lot of research and invested a lot of your time for nothing, because the auction was cancelled.  You may ultimately wind up with a property that has been trashed because the previous owners didn’t want to move, or because the house has been empty for a very long time.

Be very careful buying bank-owned properties: This option is seldom as great as it sounds.  Not all banks price homes at fair market value.  Many of them are trying to get their hefty legal fees as well as their lost loan amounts back.  With depreciation over the time of the process, paired with decreasing market values locally, the price can be much more than the home is currently worth.  Pair this with the speed in which you may have to move, giving little time to perform your due diligence, and also considering the condition of the property, these homes are not all they’re cracked up to be.

If you’re considering buying distressed properties in Charlotte as an investor or a homebuyer, I can help.  Call me or email me for more information.

The lowest mortgage rates in decades and high affordability have also helped the hard-hit housing market find some footing this year after a three-year slump.

Interest rates on U.S. 30-year fixed-rate mortgages, the most widely used loan, fell for a fifth consecutive week, averaging 4.71 percent for the week ending Dec. 3, down from the previous week’s 4.78 percent, according to a survey released on Thursday by home funding company Freddie Mac.

Freddie Mac, the second-largest U.S. mortgage finance company, started the survey in 1971.

Mortgage rates are linked to yields on Treasuries and yields on mortgage-backed securities.

The sharp drop in rates provides an opportunity for consumers, who may want to spring into action, if forecasts by economists ring true.

Cameron Findlay, chief economist at LendingTree.com in Charlotte, North Carolina, said mortgage rates will be sharply higher next year.

For current mortgage information click here for our partner Bank of America’s rates.

The bill has a few provisions including:

* Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible.

* Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.

The bill also introduced 20 weeks of unemployment benefits in states with jobless rates above 8.5%.  States with unemployment rates below 8.5% would provide 14 weeks of unemployment benefits.

The bill also provides refunds on profit taxes for businesses that had operating losses in 2008 and 2009.

Click below for the First Time Home Buyer Tax Credit Form:

Click here to review the speech by Jeff Adams, which accompanies the PowerPoint below.

“Historically low mortgage interest rates, affordable home prices and large selection are encouraging buyers who’ve been on the sidelines. Activity has been consistently much stronger for lower priced homes,” said Lawrence Yun, NAR chief economist.

The recovery was not equal across all price ranges. Homes that require a “JUMBO” loan or a loan value greater than $417,000 have not entered into a recovery phase.  Higher interest rates and larger down payment amounts will impact this market for quite some time to come.

Pending home sales were higher in all four regions than last month, and only the west experienced a decrease from a year ago. The index in the Northeast rose 0.4 percent to 81.2 in June and was 5.8 percent above the same period last year. In the Midwest, the index climbed 0.8 percent to 89.9. It was 11.6 percent higher than June 2008.

We value your opinion and look forward to any comments or requests to enhance our investment category of this blog.

Information concerning real estate investment opportunities from our New Construction Projects will be posted when available.

For information about investment properties please contact us at Helen Adams Realty