Posted by: Roby Robertson | February 29, 2008

Lake Norman Area Real Estate – Ignore the Headlines

The Lake Norman area is still a good place to buy and sell Real Estate.

I read an interested article today by famed Money Manager Peter Lynch. The headline read like this:

IGNORE THE HEADLINES! Except this one. Sure Housing’s in the hole. But there is a potent case for buying now!

This information applies for entire U.S. but the Lake Norman and Charlotte areas especially apply.

Ignoring the headlines is no easy thing.  How do you tune out all the chatter and ink on recession, sub-prime woes and the credit crunch. BUT, what exactly are you waiting for?

A top reason why, if you don’t already own a home, in which case that should be your first investment since and owner-occupied home is nearly always profitable. Lynch reaffirmed those thoughts – housing debacle and all.

When prices are falling, few people have the discipline to buy stocks, a home, gold or any other asset. But those that do pull the trigger excel in the long run!  As John D, Rockefeller famously said, “The way to make money is to buy when blood is running in the streets”. And…the streets are stained crimson.

As ofr housing, certainly some skepticism is in order. Formerly sizzling markets in Florida,Arizona, Nevada and California  probably have not seen the worst headlines yet though they may yet be close. And “JUMBO” mortgages,those more than $417,000 are likely to remain artificially high for a few months while banks work through their credit issues.

But, let’s say your ready to buy a home in the Lake Norman or Charlotte area,have good credit and have been waiting for the perfect entry point. Well as Lynch has said,  “IT IS TIME TO GET SERIOUS before an inevitable rise in interest rates wipes out your advantage”.

“The thing that will make home prices stop falling is the very same thing that will push mortgage rates higher”. says Jim Svinth, chief economist at mortgage firm Lending Tree. So anything you gain by a further drop in prices might be offset financing costs.

Consider a typical home that sells for $218,900.  You put down 20% and get a 30 year fixed mortgage rage of 5.5%.  Monthly principle and interest comes to $994.31.  Let’s say that 12 months from  now the homes goes for 10% less or $197.010. But but by then the recession is history and the Fed is jacking up rates to stave off inflation.  If mortgage costs increase by just half a point to 6%, your monthly payment would $994.94 and you would have saved nothing. Meanwhile, home prices might steady and sellers might become less willing to negotiate.

“Risks always seem most acute when headlines give you ulcers. But that is exactly when you should think long term and get off your thumbs”.

This information is especially true in the Lake Norman and Charlotte markets.  While we have not be through the down turn, it is still a buyers market and sellers are ready to sell!  Just think how good a situation you will be in having bought in our maket while rates are good and sellers will consider offers that in the past would not even be discussed!

Visit your Lake Norman and Charlotte  Lake Norman Real Living Agent  or call at 704 451 7051 to get all the information you need and a lender that is willing to help!


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