Hey Linda, What Is Going On With The Real Estate Market Here In The Greater Raleigh Area?
This is a question people ask me every day and I thought I would spend a few minutes sharing today about what I am seeing.
This November saw a 3.9% jump in housing starts, according to the US Department of Commerce. Unfortunately, the recent gain in activity still lags 45% below the “Healthy” mark, which is 1 million units annually. Foreclosures hit 1.2 million in 2010 up from 900,000 in 2009. 2011 will also be bringing many more foreclosures according to RealtyTrack. That ‘s partially due to issues the industry has face with foreclosures processing that began in the fall and delayed a portion of foreclosures from being completed this year.
What About Loan Modifications?
The volume of loan modifications according to the treasury department indicate that fewer borrowers were being approved for modifications. Most banks are also telling borrowers they must be behind in payments before they can request a loan modification. They are not telling borrowers the rest of the story and that is once they stop making payments the parallel path of foreclosure begins.
Is That Happening Here In The Raleigh Area?
Yes, last week I spoke to a family who has been processing a loan modification since August of 2010. Their foreclosure date is set for January 3, 2011. They were told the week before Christmas they would not be approved for a loan modification. I suggested they try requesting a forbearance instead of a loan modification to attempt to delay foreclosure. They no longer have time to sell in short sale unless they can get the foreclosure date pushed back. Be cautious if you are considering a loan modification. Most economists agree that we will not see substantial gains in the real estate markets until the jobless rates vastly decline.
How Long Will This Last?
It is going to take several years to work through the excess inventory and many industry experts believe prices will continue to fall another 10% on a national basis. Historically it has taken five to seven years for prices to stabilize after a deep correction. The Triangle market was one of the last to fall and is expected to be one of the first to rebound.
What Is The Best Thing For Me To Do?
2011 will be a great buyers market however, interest rates are starting to edge up and expected to rise later in the new year. Remember, if rates go up 1% it is equal to paying 10% more for the same house. Now is a great time to buy a new home and keep your present house as an investment property. This is the best financial way to ride this sluggish market out and see the largest gains in the future.
If you have any questions or would like to talk about what may be best for you feel free to call me at 919.235.0007.
Hope you have a good week!