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Need help with closing costs?
Washington, D.C.based home finance giant Fannie Mae is offering up to 3.5% of the selling price to home buyers for closing expenses. Fannie Mae hopes the incentive will help deplete the inventory of foreclosed homes it has accumulated.The credit is also available for buyers to use for their choice of new Whirlpool appliances providing an opportunity to upgrade to more energy efficient models. That’s an awesome allowance amount, by the way.
My biggest question is why Whirlpool? Why should Fannie Mae care?
The closing cost incentive is available to all owner-occupant home buyers who close on a listed property prior to May 1, 2010. Eligible properties are listed on HomePath.com.
Read more about what Fannie Mae is offering at Closing Cost Assistance and Appliance Incentive for Fannie Mae Homes.
North Raleigh Home Sales Report
Area 2 of North Raleigh
Curious what North Raleigh homes sales look like as we head into 2010? Below is a graph showing market activity for area 2 (As shown on the graph map above) using sales data from Triangle MLS, the local multiple listing service for the Raleigh area:
- North Raleigh property sales
The end of the graph looks pretty nice, huh? Active listings drop in December and the average selling price is going up. I am placing a townhome in area 2 on the market today in Camden Park. Since I met with my clients 3 weeks ago, 3 more townhomes have been listed for sale. This is par for the course as home sellers are ramping up for what is expected to be a bustling spring as home buyers clamour to take advantage of deflated prices and the home buyer tax credit.
Harris Teeter takes North Hills location to new heights
Harris Teeter is scheduled to open their first 2-story store in Raleigh at the new North Hills expansion along Six Forks Road in North Raleigh. This new store will replace to old location around the corner at the Lassiter at North Hills while adding 26,000 square feet and 50 new associates, according to a company press release. The new store is another feather in the cap of the developers of North Hills and the surrounding homes which continue to appreciate with strong sales even in a slower market.
I lived in Charlotte for years, where Harris Teeter is headquarted and I became a loyal follower. My office with NationsBank at Southpark was next to a Harris Teeter we deemed the Taj-Ma-Teeter for what we considered to be a wildly extravagant store. They had a sushi bar, hot bar, salad bar, Starbucks and bank which may not seem like much now but this was nearly 15 years ago! It fast became fashionable to have lunch there during the week.
I’m no longer a die hard loyal to Harris Teeter since my wife usually does the shopping these days. Before you think I’m a pig, understand the roles in our house are clearly defined with her in charge of food and me in charge of laundry. My wife Mary Ann is an outstanding cook and I have to admit, my whites are pretty darn white!
The new store is will open at 8:00am on Wednesday, February 10 and the old store at the Lassiter will close at 6:00pm the night before.
If you would like more information, read Grand Opening of 1st Two Story Harris Teeter in Raleigh, NC on the Harris Teeter website.
North Hills East
(Click to view full size photo)
Photo used is from http://www.NorthHillsRaleigh.com. http://www.northhillsraleigh.com/news/living/wp-content/uploads/2009/02/cropforfri-copy1.jpg. Accessed 01/27/10.
Inflation fears & buying a home in Raleigh
Renting may seem cheaper than buying a home, especially in an uncertain market. However, rents will increase over time due to multiple factors, inflation being one. Raleigh is already seeing an increase in rental demand and according a story from the Triangle Business Journal yesterday, Raleigh rental rates are leading the charge. in U.S.
“Despite a slight dip in the fourth quarter, the Raleigh-Cary MSA was one of only two U.S. metros in 2009 to see a increase in average rent for apartments and other rental housing.
Average monthly rent in the Raleigh-Cary MSA rose 2.9 percent to $806 in 2009, according to a report released Thursday by research firm RealFacts Data.” (1)
What I found interesting is that rents nationwide have decreased while Raleigh has increased. My thought is that our continued growth is driving the rental market as individuals moving here for work. etc.. may have properties yet to sell in other markets.
A decrease in the value of the dollar is yet to come. I think that many people will miss the point I am making by thinking short term. Renting versus buying a home may seem like a better deal right now, but if you want to protect yourself and your family from the effects of inflation, start thinking long term. Even if the rate of inflation remains fairly tame, rental rates are still going to rise. Now, factor in appreciation. Appreciation is how your house increases in value over time with the market, just like inflation. Raleigh has historically appreciated at nominal rates that might compare to inflation so even if it costs more to buy than to rent, your costs are offset by this new value you have in your home.
If you buy a home with a fixed rate mortgage, your payment will not change over the life of the loan. This is a distinct advantage of buying a house.When you rent, your rent will fluctuate with inflation. The advantage of locking in your payment is rarely mentioned for some reason, but it’s power should not be underestimated. Your tax bill will fluctuate and so will your insurance, but your principle and interest payment will not.
Current mortgage interest rates are extremely low, but that will change. The Federal Reserve has been keeping rates artificially low by subsidizing the mortgage securities market. Rates are sure to increase as the Fed works to stave off the coming inflation. Also, the price of buying a home has hit or is near bottom and property prices will rise, too. In another 5 years, the value of houses will have increased and the low daily mortgage rates we enjoy today will follow.
It is my opinion that buying a home is an excellent way to fight inflation and for the next few months, the government is even giving you a tax credit to buy now! This is an outstanding opportunity to buy a home if you are gainfully employed and have a plan to live in the home for the next 5+ years. Some cases in Raleigh may be suitable for shorter term buyers, but I’m a big fan of the 5+ year plan right now.
(1) Leo John. Triangle Business Journal. Raleigh posts top U.S. apartment rent gain; Durham holds steady. January 21, 2010. http://triangle.bizjournals.com/triangle/stories/2010/01/18/daily39.html. Accessed January 22, 2010.
Changes to FHA Loans: How will Raleigh be affected?
I’m not sure what this means to Raleigh as an individual market. We are seeing stronger sales below $300,000 and strongest numbers as we see them are below $200,000. FHA goes up to $295,000 in our area so I’m sure it will have some ramification on buyers because the lower price range often represents younger buyers with smaller down payments which make FHA loan an attractive option. The current average home price in the Raleigh area/ Wake County is around $200,000- $230,000 any given month.
Under the changes, homebuyers will:
- Pay an upfront mortgage insurance premium of 2.25% of the total loan amount, up from the current level of 1.75%. A borrower taking out a $200,000 mortgage would pay a $4,500 fee, for example, as opposed to a current fee of $3,500. Borrowers will still be able to wrap these fees into the total amount borrowed. FHA officials also plan to ask Congress to increase the maximum annual premium that FHA can charge.
- Borrowers will need at least a 580 credit score to qualify. Many FHA lenders already require a higher score, but there had been no standard requirement across the program. Borrowers with a score lower than 580 will need a down payment of at least 10 percent.
Just over 18% of FHA borrowers are one payment or more behind or in foreclosure, compared with 14% for all loans, according to the Mortgage Bankers Association (MBA).
The MBA released a statement on changes to FHA policy earlier today.
My buyers relied heavily on FHA loans early in my career from around 2000 until about 2005 when all you had to do to get a loan was have a pulse. Now that the market has tightened, more of my clients are choosing to go this route.
Read FHA raises fees, tightens loan standards from MSNBC here.