Is it time to buy?

Recently, the most frequent question asked of Carolina Fractional's real estate professionals is this: Is it a good time to buy, or should I wait until the market hits bottom? We are devoting a good deal of time and attention to answering this query. Whether you are purchasing a fractional, or any other type of real estate, being fully informed about market conditions is essential.

At the moment, our answers focus on two areas; general market conditions, be they local or national, and regional improvements that contribute to the overall economic health of an area. Listed below are extracts from recent developments and news. This page will continue to be updated as more data becomes available.

General Market Commentary

A recent Time Magazine/CNN article (published 2/20/08) makes some very compelling arguments regarding the current state of the market. The main points are:

  • A home should be your first investment... "an owner occupied home is nearly always profitable-- housing debacle and all."
  • "When prices are falling, few people have the discipline to buy stocks, a house, gold, art, or any other asset. But those who do pull the trigger excel in the long run. As John D. Rockefeller famously said, 'The way to make money is to buy when the blood is running in the streets.'"
  • With regard to stocks, if you "stick to a steady, dversified plan while everyone else is retreating, you will be happy years from now... Sure, the market could fall again before recovering. But the recession may be half over already- or we may avoid one altogether." This same argument can be applied to home ownership with regard to prices and interest rates.
  • The article goes on to state that whilst some skepticism is still in order for the housing market, if you have been waiting for the perfect entry point, this may be it... "It's time to get serious-- before an inevitable rise in interest rates wipes out your advantage". A further drop in prices may be offset by rising financial costs.

For example:

A typical home sells for $218,900. With 20% down and a 30 year fixed rate mortgage at 5.5% , you have a monthly payment of around $994.31

Consider that same home after a further 10% price drop, for $197,010. However, if the rates rise by then to 6.5% to stem the possibility of inflation, your payment is now around $994.94

You save nothing, have not had the benfit of the home for the past year, and sellers may be less willing to negotiate once prices have settled. 

In conclusion, the time to buy may be now... None of us have a crystal ball, and by waiting for market bottom, we are most likely to miss it. More often than not, by the time a recession has been announced, it is nearly over, the pendulum has swung, and the best prices are in hindsight. To read the complete article, click here.

For another, related article from MSN.com click here.

In more positive press, Forbes has just named Raleigh and Charlotte, NC two of the best real estate markets to invest in. Click here to read the article.

Local Forces

Many of the properties that Carolina Fractional represents are located on Carolina Beach and Kure Beach, NC. In a vast, community wide effort to keep Pleasure Island moving forward, many initiatives have been approved and begun. These civic efforts and smart development choices, led by an energetic and positive local council, add up to creating a year round destination with excellent prospects for value appreciation... Just a few of the recent starts are:

  1. A 100 room Fairfield Inn by Marriott, approved in Jan. 08
  2. An architecturally distinctive Hilton Hotel constructed by popular local builder Russ Maynard, approved in 07.
  3. Future restaurant projects including:  Blackhorn Beach Club, Harbour Masters (including transient boat slips), and a 200 seat rooftop, water view restaurant.
  4. Trolley bus tours provided by Trolley Bus Tours of Wilmington, to include a loop to Southport, Wilmington, and Mayfaire
  5. A major redevelopement of the Boardwalk is in the works and includes a full makeover, the addition of park seating, remodeling of the public bathrooms, new lighting, and many other amenities addressed in a multi-phase approach.