As 2008 begins, the mortgage problems grow worse, beach foreclosures are predicted to escalate, and now the interest rates on mortgages is rising. Many realtors say it's going to get better later in the year or at least by 2009, and just as many of the doom-sayers are saying we're on the verge of a recession and it's going to get alot worse before it gets better.
Through the end of the year I've had many investors and buyers talking about WAITING, and so sure the prices of homes are going to continue to drop. I don't agree with this in most cases, at least as it pertains to Myrtle Beach real estate. Our listings in the heart of Myrtle to the outskirts of Little River and Pawleys Island condos and homes are just about at rock bottom. They can't be sold for less than what's owed on them, and in many cases, it's to that point.
And now mortgage interest rates are rising.
In order to save a few thousand dollars, buyers are apt to cost themselves alot more when the interest rate on a 30 year mortgage jumps several percent points, and it's very likely to do just that.
Bond markets have gone down while yields have risen. With mortgage rates tied to the sale of the mortgage bonds and securities that are backed by them, they go up with the yields.
Economy gurus have reported that mortgage applications went down over 22%, purchases sank to almost 12%, and there was a drop of nearly 28% in refinancing in the last week or so. All this results in a considerable increase in the amount of your monthly payment as well as what you will eventually have to pay in full.
When the preconstruction condo market was so hot, the ones who got into it early on made HUGE profits. Another large group waited and waited, and by the time they finally did buy, it was too late, and many ended up stuck with the property they hoped to "flip". Between having to close on mortgages they were given when they really couldn't afford the payments, and the mis-use of ARM loans, thereare many, many people in a pile of trouble right now.
Why? Because they waited too long to buy. Trying to "time the market" is just like playing the roulette wheel. Not only does it not usually work, but when you lose, you lose in a big way.
This is the time. In our area especially, real estate and condos sales are very seasonal. With the spring, vacation home sales increase, and so do prices if you get the best properties. Tourists that are here on vacation fall in love with a condo and are primed to buy, and tax refunds help sales along, too. This time between winter and Easter should be best negotiation time, and may well be the lowest mortgage rates for the year.
Don't be standing on the beach wishing you had kept the pair instead of tossing them in for the flush that didn't show.