The Charleston Real Estate Search.com

Real Estate Buyers: Timing is Everything

Shopping for great real estate deals in today's market? Use your yardsale instincts to get the most for your money.

Given the current volatility in the world economy, there’s never been a better time to invest in good, old-fashioned, tangible assets: gold, silver, copper and you guessed it, REAL ESTATE!  Have we hit bottom? By all accounts, not yet; however, truly savvy buyers don’t wait for the bottom to hit.  They buy as its going down.  Here’s why: 

Fewer competitors – The fewer buyers you have to compete against, the better the price you’ll pay for anything.  Think about it.  If you and I are at a yardsale vying for the same antique rocking chair, chances are you’ll pad your offer to out-do me.  But if you’re the only one there, you’ll take advantage and bargain your way to a great deal.  Stats show that multiple offers on Real Estate usually bring 5-10% more to the seller. 

Better Terms - If you know that you are the only buyer for a given product, you can demand better terms.  In real estate that translates to more seller concessions like repairs, inspection costs, quicker closings,  and even personal property thrown in.  On one of my latest sales, the buyers fell in love with all of my staging supplies so the seller threw those in.  

More Choices -  Sales ratios this month have bumped up a bit but the Charleston Single Family home market is still selling around 10-20%.  That means that 80-90% of the homes will not sell in a timely fashion.  That’s a lot of inventory to choose from.  Almost too much so do yourself a favor and know what you want before you begin or you’ll fall prey to that shiny teapot I talked about yesterday. 

Higher Profit Margins in the Long Run – Why? Interest Rates are still hovering at rock bottom numbers.  That will change once inventory starts to move. In plain English that means that the $300,000 home you buy at 5.25% will cost $1656 per month instead of 1703 at 5.5%.  Doesn’t sound like much, but that little 1/4 percent will cost you $16,832 over the course of the loan. 

Food for thought if you’ve been thinking about salvaging your retirement fund or switching out of stocks.

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Hi Ho Silver!

With all of the hype around the impending Bear Market, I thought I’d share this info from my Money & Markets Investments Center. 

In a Good Year for Gold, This “Other” Metal Will Do Even Better

In case you haven’t guessed, I’m talking — of course — about the “other” precious metal, silver. In a good year for gold, especially with the cycle we’ve just locked into right now, silver can give you even greater gains… driven by the same precise megatrends

Because many other forces drive the price of silver, specifically, even beyond those driving megatrends the white metal shares with gold.

Just take a look…

• The supply-and-demand dynamic for silver looks even better right now than for any other metal, including gold and platinum, because more and more industries want silver, but fewer mines are producing it
• Maybe you’ve heard, however, that the huge rise in digital photography spells doom for silver demand. Not so. In fact, only 8% of world silver demand ever came from the photography market
• What many amateur investors don’t realize is that silver is one of the best electrical conductors in the world. But it doesn’t corrode like other metals. Virtually all modern electrical switches, from batteries to computer circuit boards, use silver-based solder
• That means you need silver to make digital cameras. And iPods. And laptop computers. Not to mention dishwashers, microwaves, televisions, washing machines, refrigerators and more
• The electronics industry alone uses up 44% of all the silver produced each year
• You need silver to make solder for most metal pipes, because it’s also temperature resistant. And smooth. Which has also hiked up silver demand because it’s an excellent lubricant for jet engines
• Silver has anti-bacterial properties too. The water you drink or use to fill your pool was filtered using silver. Silver is used to help process almost all pre-packaged food, too
• The $300 billion plastics industry couldn’t exist without silver. It’s the perfect chemical catalyst. You use it to make everything from adhesives and heat-resistant surfaces to toys, car parts and more
• Even the U.S. Mint churned through 28.8 million ounces of silver in 2009, to make coins and medals. We haven’t even touched on jewelry demand, which sucks up another 30% of the total annual silver production.

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What happens in Las Vegas stays there? Hope Not!!!

At least not where the housing market is concerned.  For the first time in three years, median home prices rose in Las Vegas this January.  Although it was by a meager 0.3%, it was the first evidence of a near bottom in the housing market for that region.  Las Vegas, like most resort areas, was hit extremely hard by the burst housing bubble, proving the old adage “the bigger they are, the harder they fall.”

So what does this mean for the rest of the country?  Hopefully, it means that we are beginning to see the end of the drop.

According to the latest numbers from the Shiller National Home Price Index, housing prices are back to what they were in 2003.  This is good news. Not great news but good news. Barclay Capital is predicting it to dip another 4-5% before it stabilizes.  They also predict that it will be a VERY SLOW climb back up over the next few years. 

So how do you interpret this? 

First time buyers – It means that as long as interest rates hold steady (which may or may not happen) you can probably expect to see lower prices and affordable housing continue to become available. Even if you miss the April 30th deadline for the $8000 tax credit, you can still get in on an affordable home.

Sellers – It’s time to get real. Don’t expect the moon and stars.  Ask yourself what your house would have sold for 5-10 years ago?  Chances are that you are in the right pricing ballpark.  If you have 10+ years of equity, you can still expect a decent profit.  If not, expect to break even or get out from under.  Otherwise, HOLD!

Investors – Cash in king!  If you’ve got it, you can pick up deals now like nobody’s business.  And I’m not just talking trashy handyman specials or bank owned money pits.  I’m talking luxury homes, beachfront villas and commercial retail space at fifty cents on the dollar. Take these homes, for example.

2208 Palm Blvd

Brand New, 6 bedroom,6.5 bath luxury oceanfront home on the Isle of Palms.  This home has the best of everything you could imagine.

Original asking price:  $6,495,000.00

2010 Asking Price:      $3,800,000.00

312 Bridgetown Pass, Belle Hall

Or this upscale newer home in Belle Hall, Mount Pleasant.  This 3700 square foot home with Charleston style porches, chef’s kitchen, features 4 bedrooms 4.5 bath, and custom-built everything: triple crown molding, rubbed bronzed finishes, 10 foot ceilings, Brazilian cherry floors.

Original Price:  $940,000.00

New Price:      $612,000.00

And it just keeps getting better….

3C Turn of River, Folly Beach

This 3 bedroom, 3 bath highrise condo comes fully furnished.  With incredible sunset views overlooking the Folly River, you could sail off into the sunset or just relax while the sunset comes to you.

Other units have sold here  in the mid $400s. 

Asking Price for this fully furnished luxury unit: $320,000.00

If traditional homes are more your style, check this out:

664 Highwood Cir, James Island

This 4 bedroom, 3 bath brick home in the heart of James Island was well maintained by the same owner for over 20 years.  New roof, HVAC, hot water heater, freshly painted and landscaped.  Inside is pristine and ready for your own personal updates or you can leave it as it is and enjoy comfortable, traditional living. 

A few years ago this home would have hit the market in the high 400’s.  2010 Asking Price: $300,000.

Charleston prices have been holding steady now for the past six months.  Still dipping in some markets but climbing in others resulting in ’even-steven’ price index. 

That’s why CNN Money voted Charleston one of the best real estate investment markets in the country. 

Want to find more REAL DEALS?  Give me a call and I’ll set up a steady stream of investment opportunities tailored to your preferences.

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Would I buy real estate now? You betcha!

A 3 foot Shark at Folly Beach

For some odd reason I woke up thinking about fishing strategies.  Expert fishermen study all of the trends of weather, currents, bait, etc to make informed decisions about when and where to find the biggest catch.  But even with all of their expertise, they still have to wait for the fish to take their bait and time it just perfectly to hook them. Too early and you scare the fish away.  Too late and you’ve lost your bait.

Buying a house can be like that too, especially in today’s weird economic climate.   Just when you think you know what the market is going to do, it swings up or down without warning. But smart Realtors are like fishermen.  They study and watch and wait until more signs point in one direction than in another.   Here’s what I’m sharing with my buyers and sellers:

• Interest Rates All of the economic indicators predict that rates will go up very soon, perhaps in the next month or so.  Bernanke is trying to hold back the floodgates but the inevitability is in front of us.  China is no longer buying our debt and we cannot continue to shore up our own Treasury Bond Market indefinitely. Unless the administration can pull a rabbit out of its hat, I expect interest rates to begin climbing at a fast clip by mid-summer.
• Prices Believe it or not, average prices in our area have dropped to a point where they are now teetering around a bottom.  For the last six months the average prices of homes sold on James Island have climbed $32,000.

August               211,244

September         212,532

October              183,844

December           296,078

January              241,705

February            243,092*

• Tax Credits We are now on the home stretch of the $6500-$8000 tax credit.  Nothing from the FED indicates that it will be continued.  Contracts must be ratified by April 30^th and closed by July.
• SPRING We can’t help it.  No matter how logical we try to be, it is our very human nature to “nest” in springtime. FACT: For the last 100 years, (on average) more houses have sold between March and July than any other time of the year.
• Financing Given the current climate of stated-income financing available, there continues to be fewer investors buying.  The financing just isn’t what it used to be for them so they are left making more cash deals than loan deals.  As one investor told me at the auction, you can only do that so much before the cash runs out and then you run out of buying power.

Factors that might swing the market in another direction:

• Foreclosures and Job Loss I do not think we’ve seen the full impact of either of these.  Both will bring down prices.  Foreclosures will increase the home inventory and Job Loss will shrink buyer demand.  Question is, by how much?  Only time will tell.
• Short Sale Process For six months we’ve seen banks struggle to handle the tsunami of short sales.  Most banks HATE these and process them at a snail’s pace, preferring to foreclose so they can collect the Mortgage Insurance and cover their losses.  Arithmetically it doesn’t make sense but who ever said that American capitalist banking makes sense.

By now your head is probably spinning much like a novice out on a deep-sea excursion.  Never fear, your Realtor is here. It’s my job to understand all of this and use it to help you make the right decisions.

The bottom line question I’ve been asked a lot lately:  Would I buy now? The answer: yes!

Why? Because I treat real estate as it should be treated, as a long term investment in my own future and yours.

Happy day,

If you’d like help navigating the Real Estate Market,  give me a call at 843 276-1618!

Trust ~ Reliability ~ Integrity ~ Service ~ Heart

*Stats courtesy Dan Mengedoht, Carolina One Real Estate

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The Cost of American Living – Then and Now

While continuing my de-clutter exercises, I came upon this Pages of Time magnet on my fridge.  Since I was born in 1965 the Time Magnet lists prices for that year.  Here’s what they were then and what they are today. 

Not a numbers person?   Here’s what I see:

In my lifetime, incomes rose 300% but everyday items like bread and milk prices rose 1100%.

Gas prices really didn’t rise that much. (Perhaps we just drive that much more or we talk about it that much more.)

In 1965 the average house cost twice as much as your average income; today it’s ten times more.

But as a realtor I was happy to see that despite the short term view that the media often spins on long term investments, both stocks and real estate investments rose incredibly high AND if I had to choose between the two, I’d still buy and invest in real estate over stocks any day of the week.

Sources:

http://investmenttools.com/median_and_average_sales_prices_of_houses_sold_in_the_us.htm#re_div_dow

http://www2.census.gov/prod2/popscan/p60-049.pdf

http://www.scaruffi.com/politics/dow.html

http://wiki.answers.com/Q/What_is_average_income_per_person_in_US_in_2009

http://wiki.answers.com/Q/What_was_the_average_price_of_loaf_bread_in_january_2009

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“Loan Mods, Refi’s, Incentives,” oh my!

With all of the talk about the new Government stimulus packages out there, I thought it best to shed some light on the good news.  Sure home prices are still taking a beating for those who purchased in the last five years, but for others, we’re still looking at at least 3-5% appreciation over a 10-year span.  Show me a stock that’s paying that well.

Anyway, for those of you who may be in the Five Year Panic Position, upside down on your mortgage, getting adjusted right out of your ability to pay, or needing to sell for less than you owe, here’s something to chew on.  Loan Modification is the newest tool in the mortgage toolbox helping you prevent foreclosure or short sale.

Loan “mods” can be structured in any number of ways. For instance,

• The borrower’s interest rate and payment can be reduced.
• If the borrower has an Adjustable Rate Mortgage that’s about to adjust higher, the rate can be frozen at the “start” rate instead.
• The loan term can be extended – turning a 30-year mortgage into a 40-year one.
• The monthly payments already missed can be added to the loan’s principal, and the loan re-amortized, making it more likely the borrower will catch up.
• Or the actual loan principal can be reduced.

Sound too good to be true?  It’s not.  Yes, there are limits like everything else but think about it from the bank’s perspective.  If I sold you a pair of shoes and you couldn’t pay me back, wouldn’t it be better to renegotiate your payments rather than add another old pair of shoes to my already over-stuffed closet? 

The dreaded stimulus package that everyone is barking about on television does have some other stuff in it that not everyone will like.  Free market economists say that we should let all of the foreclosures happen, clear the books and start over, something this package is desperately trying to avoid. 

It also has caps on amounts borrowed or modified and still imposes a minimum equity for refinancing but, in my opinion, that’s a good thing.  We don’t want to postpone every foreclosure.  Some homes need to be foreclosed or we’ll never recover. 

So here’s my straight talk: If you made a bad decision two years ago, why continue to hold on to a sinking ship? You should consider short sale, auction, or a quick sale with a GREAT price, even if you have to bring a little bit to closing.

But, if you made a good decision and your circumstances have changed, loan modification may be your best option.  It’s a win for the banks and a win for you. Read the rest of this entry »

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Fannie Mae Crunches Condos with a new fee

This just in from our Carolina One Mortgage Team

Fannie Mae’s added fee to crunch condo buyers
Mary Umberger | House & Homes: On Real Estate 

It’s about that condo you’re thinking of buying-or refinancing: The price is going up.

I’m not talking about the sale price, but the latest fee that will nick you unless you’re making a sizable down payment.

With many lenders already casting a wary eye on condo loans because of their default rate, Fannie Mae has upped the ante by adding a fee of .75 percent of the loan amount of a 30-year fixed mortgage, for borrowers who put down 25 percent of the purchase price or less, effective April 1.

In simple math, for a condo priced at $300,000, with a mortgage of $240,000 (a 20 percent down payment), if Fannie will be purchasing the loan from your lender, it will assess the buyer an additional $1,800.

That’s probably not fatal for the condo market, but it sure doesn’t help. On the other hand, we’re kind of getting what we asked for.

That is, if you’ll recall the screaming and hand-wringing over Fannie Mae’s tarnished act during last fall’s financial meltdown, you’ll understand that the giant mortgage financier (now wholly within Uncle Sam’s stable) is under tremendous pressure to clean up its portfolio and sidestep riskier loans. Taking on mortgages from anybody who could wave a checkbook in the air is a large part of what got the economy into its current mess, and so now we’re seeing a more sober-and tighter-lending atmosphere.

I asked a Fannie Mae spokesman to comment on the new fees, and she preferred to respond in writing. Here’s a slightly edited version of how Amy Bonitatibus put it:

“These are targeted pricing adjustments aimed at aligning price with risk for the highest-risk products in the market today, including interest-only loans, cash-out refinances, low credit scores, high loan-to-value loans and condos. Fannie Mae continues to support lenders and provide liquidity to the market,” she wrote.

Other side of coin

Mortgage broker Dan Green (who pens the informative themortgagereports .com blog) says the condo fee and numerous other loan charges announced at the same time put the federal government at cross-purposes with itself.

“It negates the Federal Reserve’s push to drive down mortgage rates,” said Green, who is based in Cincinnati but also does business in Chicago through Mobium Mortgage. “Even as the Fed is trying to actively force mortgage rates down [to get housing moving again], Fannie Mae is unwinding those efforts.”

He predicts that many of the affected condo loans will stroll over, instead, to another governmental outlet, the Federal Housing Administration. The FHA insures low-down-payment loans; after being relegated to the sidelines during the housing boom when its services really weren’t needed, the FHA is soaring in popularity because it’s the only recourse for many borrowers.

So, while that may be a relief for buyers, it merely shifts the risk from Fannie to the FHA.

Green says the fee will affect the majority of condo buyers these days, and it will particularly ding the pocketbooks of first-time buyers, many of whom are drawn to condos.

“You’d see somebody putting 20 percent down, and they have a 750 credit score (on an 850-point scale), and everybody would say they’re ideal borrowers, but because they’re buying a condo, they’re subject to a fee,” he said.

He said the fee is starting to show up on lenders’ rate sheets, even for closings scheduled before April 1, because of the time lag between closings and the packaging and sale of the loans to Wall Street, which might not be until after April Fools’ Day.

For more info on these fees, contact our Caroline One Go Team.

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Refinancing rates down to 4.75% for owner-occupied homes

Refinance today for a better financial picture tomorrow.

A refinance is essentially a brand new mortgage that replaces the one you have. Refinancing can free up money by reducing the interest you pay on your mortgage. Shelter Mortgage offers hundreds of loan types including fixed rate, adjustable rate, and FHA loans.

Reduce your monthly mortgage payment: If your home loan rate is higher than today’s mortgage rates, reduce your monthly payment by switching to a lower interest rate, freeing up cash for savings, other bills, or fun.

Shorten the term of your mortgage: Cutting your term down to 10 or 15 years will save thousands of dollars in interest over the life of your mortgage. In the short term, your monthly payment will likely go up because you are paying down the mortgage balance over fewer years, but in the long-term, you will own your home free and clear in half the time.

Convert from an adjustable rate to a fixed rate mortgage: If you plan to move from your home before your ARM is to adjust, there’s no reason to refinance because you’ll pay off that mortgage as part of the sale. However, if your ARM is about to reset, consider refinancing into a fixed rate loan, with predictable monthly payments that do not rise.

Rapid refinancing for current customers: If you already have a mortgage with us, the refinance process moves ahead more quickly and easily with less paperwork and details to manage.

For more information, please click here to find a loan officer near you.

You can even Apply Online today!

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Bird-watchers Paradise Sold to the Highest Bidder!

Wood Stork Rookery 1/2 mile down the road

Many of you have heard me talk about the incredible bird-watching that can be had near Folly Beach on James Island.  One of my very favorite spots is the rookery at the dead end of Sol Legare Road, right near the boat ramp.

Everytime I go there, I see no less than 30 wading birds like this wood stork. 

Imagine getting to see that everyday from your own window? Of course, paradise like this usually has a high price tag, well over $1 million. But what if I told you I had a spot available for under $300,000? You heard me!

On Saturday, January 31st, an absolute auction will take place on the steps of 1820 Sol Legare Rd.  That’s about a quarter mile jog down the street before the boat landing on the right. The house is currently listed at $360,000.00 but the seller needs to sell!  That means someone is going to get a great deal that day.

Marsh view from the back yard

I’ve seen and shown this house several times.  It’s really cool! Despite the bland exterior, the interior includes 4 bedrooms, 2 baths, an open kitchen and dining area and a living room that just makes you want to hang out.  It reminds me of OLD FOLLY!  Remember? Real Wood paneling, hand-made doors, tiled floors.

This place is just begging you to come and relax.  Drop your surfboard at the door, cop a squat on the futon, burn some incense and cook a veggie burger.

Yoga Studio behind the house

 After lunch, wander to the yoga studio out back,  your very own buddhist haven and do a mantra for me.

If that doesn’t relax you,  walk the 4 acre (subdividable) lot, enjoy the marsh views or hop on your bike and ride a mile to the ocean.  Chances are if you live here, you’ve rented a place like this one summer.  This is Classic, Folly Beach living.

If you’ve never been to an Absolute Auction, you need to check it out.  This is the latest trend in Real Estate purchasing and I expect to attend a lot of them this year.

Unlike teaser auctions where there’s a hidden reserve price, Absolute Auctions start at a low bid and go until someone wins, no reserve! Of course, there are little details that I can walk you through, like a $10,000.00 downpayment the day of the sale to the winning bidder and a 10% addition to the winning price to pay all proceeds and commissions. There’s also the possibility that if no minimum bid is secured the auction just won’t happen but that rarely occurs. 

If you want to explore this process, give me a call. As the lingo goes, I’ll hook you up.

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The biggest flood of red ink the world has ever known

by Mike Larson:

How much is $1.186 trillion – or $1,186,000,000,000, written out the long way?

• It’s more than the inflation-adjusted cost of the Vietnam ($698 billion) and Korean Wars ($454 billion).
• It’s more than the Louisiana Purchase ($217 billion) and the Savings and Loan bailouts ($256 billion).
• It’s greater than the 2007 Gross Domestic Product of all but 13 other countries in the world.
• It’s equal to $3,881 for every man, woman, and child in the U.S.
• It could buy 189,760,000,000 bushels of wheat at recent prices. 26,893,424,036 barrels of oil. Or 1,581,333,333,333 cans of Diet Coke at my trusty vending machine in the break room.

Why do I bring this up?

Because that $1.186 trillion figure is the projected 2009 deficit, according to the latest report from the Congressional Budget Office (CBO).

And it is downright scary.

These Numbers Are Big – Really Big!

That $1.186 trillion is such a large number – so out of control – that it’s hard for most of us mere mortals to process it. Suffice it to say … It’s the biggest flood of budgetary red ink any country has ever seen in world history. And it makes last year’s $455 billion deficit look like chump change.

It’s not just the absolute number, either …

The projected 2009 figure is equal to about 8.3% of U.S. GDP. That tops the post-World War II record of 6% set in 1983.

Still not worried?

Then get a load of this:

The CBO estimate doesn’t even include any potential stimulus package from Congress and the Obama administration.

We haven’t gotten the final details of the stimulus plan. But it could cost anywhere from $675 billion to $1 trillion. That means the ultimate 2009 deficit could end up being larger by 60% … 70% … 80% … or more!

Is the red ink a short-term problem, one that will soon go away? Not according to the CBO. Scroll through the agency’s report – “The Budget and Economic Outlook: Fiscal Years 2009 to 2019″ (available at: http://www.cbo.gov/ftpdocs/99xx/doc9957/01-07-Outlook.pdf) and you’ll come to a nifty table on page 23.

It projects red ink as far as the eye can see: An ADDITIONAL $3.135 trillion from 2010 through 2019.

Two possibilities could bail us out of this black hole of debt:

1. Congress and the incoming administration could really clamp down on spending going forward to stem the tide of red ink.
2. Or the stimulus plan could manage to completely offset all the credit, real estate, and economic problems, thereby leading to a windfall in tax receipts.

Both are highly unlikely …

And if neither scenario comes about, this country’s finances are going to be blown to hell for years and years to come.

Consequence-Free Borrowing Forever?
Not Bloody Likely

Now if you’re the type of person who believes consumers, corporations, or even sovereign nations can borrow money they don’t have … and spend far beyond their means … for all eternity, then you can stop reading right now.

There’s absolutely nothing to worry about.

But if you’re like me, and you think numbers like $1.186 trillion are so far off the charts that they HAVE to have consequences, then you should be downright scared!

The government is already selling record amounts of debt at auction, day after day, week after week.

This week alone, Treasury sold $8 billion in 10-year TIPS and $24 billion in four-week bills on Tuesday … $30 billion in 3-year notes and $35 billion in 70-day cash management bills on Wednesday … and $16 billion of nominal 10-year notes on Thursday. And there’s no end in sight.

Total net issuance could approach a mind-boggling $2 trillion by year’s end!

At some point, investors are going to balk at all this issuance. They’re going to choke on the massive amount of U.S. paper spilling out of Washington. They’ll demand higher yields to buy our debt, driving bond prices down and interest rates up, just as I warned in my December 5, Money and Markets column, “The Biggest Bubble of All: Long-term Treasuries?”.

Heck, the day of reckoning could already be upon us …

Thirty-year Treasuries plunged more than 3 points on New Year’s Eve … another 2 30/32 on January 2 … a whopping 5 16/32 on January 5 … and another 1 28/32 on January 7. They’ve lost almost 13 points in a virtual straight line, while yields on 10-year notes shot up from 2.25% to 2.5%.

My advice remains the same: Short-term Treasuries are fine as a place to park your keep safe money. But stay the heck away from long-term U.S. debt.

This investment news is brought to you by Money and Markets. Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit http://www.moneyandmarkets.com.

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