Real Estate Market Sees More Activity
Home-buyer traffic in Moore County is increasing, but it's occurring primarily in the lower-end market thanks to a federal tax credit.
Tim Venjohn, president of the Pinehurst-Southern Pines Assoc-iation of Realtors, said that traffic continues to be good as the summer home-buying market ends.
Many in the market are first-time buyers looking to take advantage of the $8,000 federal housing tax credit, which is set to end on Nov. 30.
But the market for more expensive property continues to be tough.
"We are seeing a lot of activity in the first-time buyer," he said. "The story for the whole year has been the low-end market. It's the one that's moving really well. The high-end market has been stagnant and hasn't been moving much at all."
He added that both the federal tax credit and conforming loan rates are driving the sales of lower-end homes. Middle-level buyers aren't really getting any incentives, he said, making it difficult for them to move up to the higher-end market.
"It's extremely hard to get loans above those conforming loan rates," he said. "The days of 100 percent financing are almost gone at the moment."
Venjohn indicated that existing home sales -- the number of units sold -- in August gave back some of the strong gains made in June and July, but continue to be much higher than before the stimulus. In August, 87 units were sold at an average price of $263,197. That's less than August 2008, which saw 101 units sold for an average price of $308,201.
From January to August of this year, 596 units were sold for an average price of $247,456. Over the same period last year, 791 units were sold for an average price of $270,828.
Venjohn said the price drop from 2008 to 2009 is not a sign that homes are selling for less now but is a reflection that the less-expensive market is more active, and high-end sales are slow at this time. Having a greater quantity of cheaper homes sell simply lowers the average sale price.
"The value of houses hasn't dropped," he said. "The number of units [sold] was a little bit less than what I would have expected."
Moore County's housing market remains relatively stable, Venjohn said, adding that this market is usually impacted by outside forces. The county remains a destination for a lot of folks in other states, but because the housing markets are so bad elsewhere, it takes longer to sell their homes before they can move here.
Venjohn said one way local buyers and sellers are affected negatively are through appr-aisals. Appraisers from outside markets assume Moore County is having depreciations that it doesn't actually have, which is frustrating.
"We need people to be experienced in our local market before working in our local market," he said.
But in the end, Venjohn is convinced that it's a great time to buy in Moore County. Inventory is good, interest rates are low, and there are other incentives, such as the federal tax credit.
He said it's difficult to predict how the housing market will play out in the coming months, but he said Moore County continues to be a preferred spot to relocate to because of its excellent schools, outstanding health-care facilities, recreation variety and business growth.
Venjohn is quick to remind first-time buyers that if they want to take advantage of that tax credit, they should have a house picked out and under contract by the end of October because it typically takes 30 days for mortgage paperwork to process. Sales must be completed before Dec. 1.
"Real estate, when purchased well, is the single best tool for maintaining and developing wealth in America," he said. "Buyers should look at and participate in this market."
Contact John Krahnert III at (910) 693-2473 or by e-mail at firstname.lastname@example.org.
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