Negativity in the Mortgage Market on the Outer Banks

There is a new Outer Banks Blog from Greg Cremia titled Outer Banks Community Forum.  Greg is an old school Active Rain blogger that has now switched to an independent platform.  Greg understands the technology and I think he will be a very active local blogger.

Greg has a guest author Bernie from Beach Mortgage.  Bernie is a good guy and a long time lender on the Outer Banks.  He posted an article about the negativity in our mortgage / real estate market.  I believe that Bernie is correct on a few fronts - there is a tremendous amount of negativity in the press about the current mortgage market. 

This is where I differ from Bernie. 

• Loan requirements have tightened - higher credit scores are larger down payments are required today compared to July 2007. 
• It is reported that the mortgage industry has lost 27,000 jobs in the month of August. 
• North Carolina Legislature has passed a bill addressing Mortgage Fraud.  The new law goes into effect on January 1, 2008.   
• Most lenders do not have all of the products they had before the fall.  Just check out the Implode-O-Meter to see who is no longer in business or what products have been pulled from inventory. 
• Existing Home sales dropped to their lowest level since 2001. 
• The press moving onto another subject is not going to fix the problem.

Prices have dropped on most properties on the Outer Banks.  Rentals for most companies hit an all time high this year.  There are some good deals on the market today and there are some very motivated sellers. 

A favorite old boss of mine had a saying that he would share with us on an all too frequent basis - it is what it is - which was voted the #1 cliche of 2004.  Deal with the facts and move forward.  Find solutions for your customers when the rules change.   

Done for the night - time to watch the Rockies try to defy odds and beat those hairy Red Sox. 

Comments

[Katie]

Loved it....Red Sox kicked butt last night, kind of a boring game though !!!!!

[Allan Rodgers]

Ronnie:

I just read your post and had a few thoughts. There's no doubt in my mind the OBX market is experiencing a slightly recessive trend. I wonder if you subscribe to the notion that this market tends to experience national trends ahead of the rest of the country and conversely begins to recover ahead of the national economy? Several colleagues with many years of experience in local real estate cycles have shared this theory with me. I cannot find any information to support nor deny it.

My office is realizing increased buyer activity and logged the best September Sales Production in our 6 year history. In fact September '07 will go down as the third best month for production on record in our office. This was achieved with 1/3 fewer agents than in years past. October appears as if it will be a fairly flat month for production compared to same period in years gone by. However our November and December closings are poised to set office records. Whether or not this is a sign that recovery is closer than we think is a matter left for debate but it makes me wonder if buyers are beginning to feel as if this is the time to bargain for the best deals. There's a renewed sense of optimism amongst the real estate professionals on my team. Forecast or Fancy, the activity levels are increasing and I hope that means better days are ahead for Outer Banks real estate sales.

On a side note I reviewed some stats from the Outer Banks Association of REALTORS MLS system recently which revealed that two of the top 5 largest residential real estate closings recorded in the OBAR system occurred in 2007. Both were at or above $4 million. Ironic that we appear to have set new pricing records during these times when real estate sales are down.

Regards,

Allan

[Ronnie Roach]

Allan,

I do believe we felt the slowdown before many others - partly because we are primarily a vacation market. Not sure if we will recover before others but it seems logical. We have seen a greater reduction in prices than surrounding markets.

Based on last years rentals - the desire to visit the Outer Banks is continuing to rise. That is good news for those that own property.

Glad to hear your office is doing well. I am not surprised because you have a knowledgeable dedicated group of agents. With the reduction in prices, motivated sellers and low interest rates - we should see some activity in the coming months.