Outer Banks Real Estate

Mortgage Market Update

Last Week in the News

After a two-day meeting, the Federal Reserve left short-term interest rates at 5.25%, where they have stood since June 29, when the Fed halted a two-year rate-hike campaign aimed at controlling inflation. Fed policymakers said on October 25 that "economic growth has slowed over the course of the year, partly reflecting a cooling housing market."

Existing-home sales fell during September for a sixth straight month to a 6.18 million annual rate, a 1.9% decrease from August's unrevised 6.3 million annual pace, the National Association of Realtors (NAR) said October 25. "The worst is behind us as far as a market correction," said David Lereah, NAR's chief economist.  

New-home sales in September increased 5.3% to a seasonally adjusted annual rate of 1.075 million, the Commerce Department said October 26. Economists had expected no gain.

However, the median price for a new home sold in September was $217,100, a drop of 9.7% from September 2005, the Commerce Department reported October 25. It was the lowest median price for a new home since September 2004 and sharpest year-over-year decline since December 1970.  

Orders for durable goods -- items expected to last at least three years -- increased by 7.8% last month to a seasonally adjusted $226.7 billion, the Commerce Department said October 26. Economists had anticipated a 2% gain.

Interest rates on 30-year fixed mortgages rose for the week ending October 26, Freddie Mac reported.          

This week look for updates on consumer confidence on October 31 and construction spending on November 1. 

All is calm today on the Outer Banks...

The weather today is calm and overcast.  Temps at noon are around 60 degrees.  Things are about to change on the Outer Banks.  There is a severe weather alert for our area starting at midnight.  Winds in excess of 35 mph are forecast for the coast.  You would think that is a bad thing.  Not according to Bill over at Bill's OBX Beach Life .  Seems the windsurfer / kite-boarding crowd is pretty excited about a potentially epic weekend.  The ocean temp in Duck is 63 today but as you head further south towards Hatteras, it is pushing 70 degrees. 

Outer Banks makes list of top 200 Rural Counties

Bigger and more affordable houses with large yards are luring people to settle in the "exurbs," the area that exists at the edge of the suburbs, while many other ex-suburbanites are off to find rural land to build anew.

According to the U.S. Census Bureau and USA Today research, the fastest growing exurbs with populations greater than 10,000 in 2004 to 2005 include: Flagler, Florida (25 miles to Daytona, Florida), Lyon, Nevada (80 miles to Reno) and Kendall, Illinois (50 miles to Chicago). Reasons for moving include leaving congestion and costly living.

The Progressive Farmer  magazine progressivefarmer.com recently released its picks for the top 200 best American rural counties to live, which include Ontario County, New York; Union County, South Dakota; and Oconee County, Georgia.  Transylvania County  (in the western part of North Carolina) came in as the highest ranked county in North Carolina at 124.  The only other two counties  mentioned were part of the Outer Banks - Dare County at 145 and Currituck County at 151.  You don't think of Dare being rural in the summer with 150,000 visitors here every week but we are this time of year.

Rural counties comprise about 97% of the United States and are becoming increasingly popular for people looking for areas more isolated than the exurbs. However, depending on how far away these "pioneers" stray from civilization, there can be premium costs.

Typically, homebuilders encounter higher building costs the farther away they are from populated areas. Experts say that a 10% to 20% surcharge is often levied for transporting materials, and adding sewers, water service (or a well) and electricity can be challenging and expensive.

Check the local government's master plan for build-out. Nobody wants to build a dream home with the goal of solace when an industrial park is planned next door 10 years down the road.

Mortgage Market Update

Last Week in the News

Helped by sinking gasoline prices, consumer prices fell by 0.5% in September, the largest dip in 10 months, the Labor Department reported October 18. The decline was better than the 0.3% drop predicted by Wall Street analysts. Consumer core inflation, which excludes energy and food, rose 0.2%, the third straight month of modest gains.

Producer prices -- the prices that producers charge wholesalers -- fell by 1.3%, nearly double the expected decline and the largest in more than three years. Producer core inflation, however, jumped 0.6% in September, the biggest increase in 20 months. Much of the rise in core inflation was attributed to auto dealers ending their incentives to try to sell a glut of unsold cars.

Meanwhile, the Conference Board said on October 19 that its September Index of Leading Economic Indicators edged up 0.1%. The index, which had slipped 0.3% in July and 0.2% in August, is designed to predict economic activity three to six months in the future. The small September gain fits with economists' expectations that growth will slow in coming months.

Housing starts showed an unexpected rise of 5.9% in September, the Commerce Department reported October 18. While an improvement over August, September's housing starts are still 17.9% lower than a year ago. Issuance of building permits -- a key indicator of future building activity -- declined 6.3% in September, the biggest drop since October 2001.

After last week's gain, rates on 30-year fixed mortgages declined for the week ending October 19.        

This week look for updates on existing home sales on October 25 and new home sales on October 26. 

Mortgage Market Update

Last Week in the News

The U.S. trade deficit -- the difference in value between the goods and services imported and exported by the United States -- hit an all-time high of $69.9 billion in August, up 2.7% from July's $68 billion deficit. The trade deficit is on track to set a record for a fifth straight year, running at an annual rate of $784.2 billion, 9.4% higher than last year's $716.7 billion record.

However, the nation's federal deficit -- government spending versus incoming revenues -- fell to $247 billion, a four-year low and a 22% improvement over the $318.7 billion deficit in 2005. Revenues climbed by 11.7% while spending increased only 7.3%.

Retail sales dipped a bigger-than-expected 0.4% in September, the Commerce Department reported October 13, but if the big drop in gasoline prices is excluded, retail prices would have posted a 0.6% advance.

In addition, the University of Michigan reported that the big declines in gasoline costs helped consumer confidence rise sharply in October, posting a preliminary index for the month of 92.3, up from 85.4 in September. Analysts said the rise in consumer confidence should translate into solid consumer spending during the upcoming holiday sales season.

First-time jobless claims inched up 4,000 to 308,000 for the week ending October 6, the Labor Department said. The median estimate from Wall Street analysts put first-time claims at 310,000.

Interest rates on 30-year mortgages moved up slightly from their seven-month low, Freddie Mac reported October 12.        

This week look for updates on the Producer Price Index on October 17 and Consumer Price Index on October 18.

Mortgage Market Update

Last Week in the News

Employers added 51,000 jobs in September, less than half of the 120,000 positions analysts had expected, the Labor Department reported October 6. Despite the disappointing increase, the nation's unemployment rate dropped from 4.7% in August to 4.6% in September. Service sector growth fell sharply in September to 52.9, down from 57 in August, according to the Institute for Supply Management (ISM). The ISM index was the poorest showing since April 2003 and far below analysts' expectations. A reading above 50 indicates economic expansion. The nation's retailers, however, reported better-than-expected gains in September with the arrival of cooler temperatures and easing gasoline prices. The International Council of Shopping Centers' index of retail sales rose 3.8% in September. Kohl's reported a robust 16.3% gain in same-store sales (sales at their stores open at least a year) and Nordstrom registered a 13.4% rise in same-store sales. Overall construction activity unexpectedly edged up 0.3% in August, the Commerce Department said October 2. While private home construction dropped 1.5% in August, the decline was more than offset by a 3.4% rise in nonresidential construction, the biggest one-month increase since a 4.1% gain in September 2005. For the week ending October 6, interest rates on 30-year mortgages fell to a seven-month low, Freddie Mac reported. Rates have been headed lower as financial markets have become convinced that a slowing economy will keep the Federal Reserve from raising interest rates. This week look for updates on the trade deficit on October 12.

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Top 500 Real Estate Blogs to Watch

The folks over at Pittsburgh Home Daily created a massive blogroll of the Top 500 Real Estate Blogs to Watch.  What a job that must have been.  The great news is that my blog - Outer Banks Real Estate made the list along with another local blogger Matt Huband at Hometown Realty.