In just about any market you can find an article about why now is a good time to buy. It’s easy to be cynical when you hear calls to action today after what has occurred in the real estate market over the last five or six years. What makes this particular fall unique compared to just about any of the other times you’ve been told to purchase Outer Banks real estate? Rarely do so many market variables favor buyers. Here’s some information on a few of these variables.
Historically low interest rates: As of this writing, interest rates are around 3.75% for a second home loan amortized over 30 years. Interest rates are close to the lowest they’ve ever been since amortized loans became common place in the mid 20th century. These low rates offer you an incredible savings in interest payments. For example, a loan of $100,000 for 30 years at 5.5% costs the buyer an additional $100 per month more than the 3.75% loan. Even a modest purchase is much more affordable now. If you require financing then history shows this is as good as it has ever been to make that purchase.
Available properties: Despite increased sales this year, there is still a decent amount of inventory in most market segments. For example if you are looking for a single family beach cottage in Duck under $500,000, as of this writing there is still twenty to choose from. With the foreclosure sales trending down and buyer’s interest picking up your choice of homes will likely not be as big this time next year.
Great prices: Market values are the lowest they’ve been in about ten years. For example a house on the golf course in Kitty Hawk sold during the summer of 2005 for $440,000. That same house sold again this summer for $375,000. Another example is a house in Duck that sold in the fall of 2004 for just under $695,000 that same house sold again in July of this year for $515,000. There are many similar examples up and down the Outer Banks of both privately owned and bank owned homes showing these large discounts in sold prices.
Is there ever a perfect time to buy? That really depends upon your personal financial situation but with the unique combination of market characteristics it may be time for you to take a closer look. Who knows when we will see all these market characteristics favor the buyer again.