Grand Strand 2012 Market Report

The Grand Strand Market Report is out--here's a quick summary:

Nationally late 2012 appears to be the turn around for the real estate market and the Grand Strand is tracking along, perhaps a few months later.  

• Property sales are up by double digits over 2011
• Inventory (number of properties for sale) continues to decline
• Distressed inventory (short sales and foreclosures) continues to fall
• Single family homes sales were up 18.1% over 2011; condos up 11.7%
• For 2012 median home prices was $168K down 2.6% from last year; condos, $104K a 3% drop
• Both home and condo prices were up in December benefiting from declining inventories and low interest rates.

The big picture:  inventories are declining, number of sales are up, prices are trending up, read the full report here:  Grand Strand MarketReport, December 2012

News You Can Use: Free Music

Amazon.com has announced that anyone who has bought a CD on Amazon over the last 15 years is entitled to a free digital copy of that album and the deal applies to all purchases going forward.

Your tunes will automatically appear in Amazon's Cloud Player and will be immediately available for download.  If you've never accessed your account, you'll find the music there when you do.

A great deal especially if you've lost your CD or had them stolen from your car.  But think about it, it's a little creepy that Amazon keeps all your purchases on file, apparently forever.....

Now if they'd just make the same deal for books....

Good bye to Adjustable Rate Mortgages?

The Feds have changed the rules for adjustable rate mortgages making it harder for buyers to qualify and probably forecasting the end of ARMs.

They've instituted an ability to repay rule, effective January 2014, requiring lenders to evaluate whether a borrower can repay if the loan adjusts upwards.  Unlike fixed rate mortgages which have the same interest rate and payment over the life of the loan, ARMs fluctuate with interest rates, usually being pegged to LIBOR, a world wide reference rate computed in London.

Instead of qualifying buyers with an ARM's low introductory rate, the lender will be required to use the loans loan's "fully indexed rate" or LIBOR plus the lender's margin.  This will make it harder for some buyers to qualify,  but once they do it's less likely they'll be forced out of their home if (really when) interest rates rise.

One thing for sure, interest rates will eventually go up,  it's just a matter of when and how far--how can I be so sure, easy, they can't go much lower unless we start paying banks to hold our money....

So why bother with an ARM?  An ARM with a low introductory rate might make sense if you know you will be moving around the end of the introductory period; otherwise a fixed rate mortgage is likely to be a better deal for the long term.

Mortgage Forgiveness Debt Relief Act

On January 1, 2013, Congress passed an extension of the Mortgage Forgiveness Debt Relief Act. This great news for struggling homeowners in the Grand Strand.

The Mortgage Forgiveness Debt Relief Act was originally passed in 2007 to aid the millions of homeowners who suddenly found themselves in danger of losing their homes to foreclosure following the housing market crash.

Under the Mortgage Forgiveness Debt Relief Act, any debt forgiven in a short sale, foreclosure, or loan modification, is exempt from federal taxes on primary residences.

For homeowners facing foreclosure, this exemption may save them from paying thousands, or even tens of thousands, in taxes on top of losing their homes. For another year, homeowners can take advantage of this exemption if they must  do a foreclosure, a short sale or a loan modification. 

Apartment Rents Continue to Rise

Landlords along the Grand Strand are finding that demand for apartments and rental houses is strong and high rents aren't deterring people from renting. But as rents continue to rise and and mortgage rates remain at near record lows, more folks are finding it's cheaper to buy than rent, if they can qualify for a mortgage.  However scraping together a down payment to buy a home remains tough for many consumers and tight mortgage standards are forcing some who might like to buy a home to continue renting.

Part of the high demand for rentals is driven by changing demographics as many people like the flexibility to be able to pick up and move; the improving job market makes people think twice about putting down roots if they believe relocating will be a good career move.

What's the impact for the Grand Stand?  If your job is secure and you're happy with the area, now is the time to buy; if you're looking for a better opportunity, keep renting.  As the economy continues to improve, developers are dusting off those apartment projects they put on hold; once new units hit the market, rents will stabilize.