According to a report released last week 2012 will be the year of turnaround for the Asheville Real Estate Market. One major reason will be because of loosening of credit.

This alone can have a major effect on housing sales.

With the loosening of mortgage requirements could have a major impact on the consumer buying power to own a home.

On a national note analytics firm notes the average credit score required to attain a mortgage loan is 700 this may loosen up. Additionally, lenders are now lending amounts up to 3.5 times borrower earnings. This is up from a low during the crisis of 3.2 times borrower earnings.

Banks are also loosening loan to value ratios, this is a clear sign of an improvement in mortgage credit conditions.

The combination of depleting housing inventory and lack of bank owned homes on the market prices will start stabilizing this summer.

The home buyer that has been sitting on the fence is starting to jump off making the last half of 2011 home sales equivalent to 2007 sales. I am seeing the Asheville home search on www.MillsRealEstateTeam.com web site triple in viewers over that last six months indicating a strong interest in Asheville home buyers.

Sellers will start seeing home prices stabilizing midsummer and by spring in some areas in Asheville like Grove Park as there are more home sales than inventory. This is allowing Grove Park home prices to even increase.

Other areas to watch in Asheville home sales is Biltmore Park, Arden, Asheville downtown condo sales and Haywood County that include Maggie Valley and Waynesville.

Buyers beware Sellers will start demanding more for their homes by mid summer as homes sales become much stronger. Remember home sales in many areas are already equivalent to 2007 and the 2006 was the peak so it will not take much to see a strong finish in 2012.

For example if prices are still going down would it not be better to wait? OK, I understand the interest rates are a 60 year low and this is a good time for financing a home but my understanding is rates are going to stay low until 2014.

So would it still not be better for me to buy later?

I am a seller with prices so low wouldn’t it be best to wait to sell my home? Well the answer to that is easy yes if you do not have to sell now.

As an Asheville Real Estate Broker you would think I would have only one answer will read on.

Let’s stop for a minute and look at a couple of things that may help you decide if this is a good time to buy. Years ago when we purchased a home we really did not pay too much attention about the selling price as long as it fit into what we wanted to spend and it appraised.

The reason was we knew the property long term would increase in value and create a nest egg for us for the future.

Well I feel pretty comfortable telling my Clients they can feel comfortable with that same thought process as we had years ago. However it is hard to think that way because of what has been happening over the last several years. For example the domestic automobile business has sure had its own problems and now it is climbing quickly out of the hole. Well I have been driving Toyotas for many years now and need to buy a new car and I am not sure if I am ready to buy an American car yet I just do not have the confidence.

How does that relate to homes? I find Buyers are still holding on the same fears about their confidence in the housing market.

It is important to know the housing affordability rose to a record high during the fourth quarter of 2011, which means a home buyer’s purchasing power is greater than it ever has been before. Cars you drive them of the showroom floor and they drop a 1/3 of their value. Home prices are starting to level off and it is predicted that by 2013 we will see a swing upward in price increases.

Today ownership is within reach of more households than it has been for more than two decades.

Ok, this is all fine a good but how does that affect me?

I like the old saying cannot win the lottery without buying a ticket. If you do not buy a home it will not affect you. However if you do I believe your investment will be well protected and if your renting most likely you can buy and your monthly payment will be less plus the tax deductions you receive.

So I guess it is your call but if you would like more information go to: Increase My Buying Power

Listen to the rushing creek while you ponder the beauty around and within this sensational rustic cabin.  Just pack your provisions and you are on your way for a fabulous retreat in the mountains.  From top to bottom tastefully furnished with all the elements of a dream to reality you could imagine.   With plenty of light and airy spaciousness, relax and enjoy one of the two fireplaces, hot tub or jet tub. Seek solace in the loft, curl up by the fire in your finished lower walkout level, or separate bonus room.  Escape into the fresh mountain air by the fire ring and take in the scenic views. Everything you could desire without leaving home.  You are just minutes away from Asheville, Maggie Valley, Waynesville and Tennessee. Come and experience this nook in the Smoky Mountains.

I was talking with a real estate friend the other day that deals with rentals on a personal level and as I was sitting in his office two separate people dropped by with rent checks. He looks at me and smiles and said pays my monthly bills.  As the government gears up along with Equity Firms to start marketing foreclosed homes as rentals this may be a wonderful opportunity for us to invest in real estate and take advantage of these foreclosed properties.

This is not something new as investors for several years now are buying up Bank Owned properties and with a coat of paint renting these properties out. My friend was telling me Asheville Real Estate thresh hold for rental is $850 a month or less and the average for vacancy is less than 5%.

The Federal Housing Finance Agency plans to offer some of its 180,000 foreclosed homes through Fannie Mae and Freddie Mac to private operators who will turn them into rental properties. This could be an opportunity for all of us to take advantage of some great Asheville home deals. Let’s not forget in areas like Maggie Valley, Waynesville and Asheville a seasonal rental are strong and allows you to have a mountain cabin to enjoy during the summer.

As Asheville home buyers continue to pay cash it seems to be sending values down much lower than they otherwise would be. I believe this has been a trend for several years as investors pay cash for distressed properties.  With one out of every 3 buyers are paying cash on an average these cash buyers have a tremendous influence on pricing. As Cash buyers continue to be attractive to home sellers, banks and mortgage companies they do not usually come with contingencies like must appraise, contingent on buyer qualifying for a mortgage and so on. The trend to keep prices down will continue.

So what is the future for Asheville Real Estate? I believe prices will continue to fall through this year but not at the same pace we have seen in the past. However some popular areas will stabilize by midsummer and perhaps spring as some economic experts are predicting. Over 60% of homes sales in Western North Carolina have come from Florida. Areas like West Palm Beach, Miami, Ft Lauderdale and Ft. Myers are starting to see a strong upswing in home sales and will have a major impact on our areas. In fact 6 out of the top 10 markets making major improvements in home sales are Florida cities.

So is it time to get off the fence? For me I plan on buying some rentals this summer .

Because of low mortgage interest rates an increase of 20% in mortgage applications for home purchase and refinancing surged last week.

Asheville real estate home sales increase last week including mortgage applications for home buying an increase of 10.3 percent.  

Because of mortgage rates reaching another new low, volume jumped in Asheville, Maggie Valley and Waynesville from buyers returned to the market after the holiday season.

Freddie Mac reported that 30 year fixed rate mortgage averaged a record low of 3.89% last week is helping home buyers buying power to be able to qualify for a more expensive home than they normally would be able to.

The question is can you qualify to receive the lowest mortgage interest rate or do you have to give up your first born? Lenders offer the best interest rates to borrowers that are less risk.

We all hear about having a good credit score so it is a good idea to have a 740 or higher and putting 20% down will most likely help you enjoy the fewer than 4% interest rate fixed for 30 years.

Lenders may have a rate premium for condos, duplex and 4 unit buildings.

When you combine the low interest rates and all time low home prices the continued surge of new mortgages and home sales will continue stated by the economist. By all indications they may be right when projections of stabilizing home prices as soon as spring 2012.

Asheville and statewide economic measure showed surprising signs of life in November, even the notion that North Carolina's economy could be on its way to recovering. Created by N.C. State University an index surged in November, this could be a sign of an accelerating state economy for the New Year.

This index should similar result in October as well indicating this may have some substance and could be a good reason Asheville real estate closed out with a strong 4^th quarter in 2011.

North Carolina has remained among the fastest growing states in the nation during the economic downturn. North Carolina ranked fifth in growth just behind Texas, California, Florida and Georgia.  We continue to be listed in many magazines as one of the top places to come, Asheville ranked happiest place to live and top ten best place to live.

So what about real estate? Asheville, Waynesville, Maggie Valley home values probably had their smallest decrease in four years in 2011, according to Zillow, whose survey found that prices may find their floor soon and will begin rising by 3% a year through 2016.

Many forces had a major impact in real estate for example government, the mortgage industry, and Mother Nature all shook the Asheville housing market in 2011. Banks had approved numerous foreclosures without proper approval. Banks did slow their processing of foreclosures greatly in 2011, making sure to take extra precautions. As regulators and states work on settlements with banks over the scandal that may include reducing loan balances of current home owners, however once approved could bring more foreclosures in 2012. A series of natural disasters effected real estate in 2011, tornados, floods, and hurricanes. Let’s hope 2012 will be much calmer. October 2011, the government lowered the conforming loan limit for loans backed by Fannie Mae and Freddie Mac as well as those insured by the Federal Housing Administration from $729,750 to $625,500 in most areas. It appears conforming loan limit will stay for 2012. Great news is mortgage lenders are willing to charge lower rates for loans when backed by Fannie or Freddie. Also the Federal Housing Administration is extending its “anti-flipping” waiver through the end of 2012, which allows buyers to purchase homes that have already been sold in the last ninety days. 

There seems a lot of good reasons that real estate in Western North Carolina and the nation may see some positive move meant in 2012 and the investors that have and are buying up properties may enjoy a much faster return than expected.

This seems to be the time to purchase and taking advantage of the low interest rates and home prices.

As the recovery of Asheville Real Estate we are starting to see other communities starting to see positive movement.

With the economy improving, unemployment decreasing, home prices at an all time low and interest rates at a 60 year low real estate is starting to turn.

We continue to see Asheville home prices starting to stabilize and in some areas like Grove Park, Biltmore Forest, Biltmore Lakes, Waynesville and Maggie Valley. Second home is starting to increase in sales and as other areas like Florida with home sales on the rise buyers are able to make their move to Western North Carolina.

Interest rates for 2012 are predicted to rise however the LA Times and CBS News think it will still fall. We know the Fed is going to keep interest rates low until mid 2013.

We know analysis predicting the future whether it's housing-related, mortgage related or something else are based on a combination of past events and personal opinion. So the bottom line is they do not have a clue.

But this is what we do know right now Asheville real estate is improving, prices are stabilizing and the economy is better.

The attached graph is a list of markets that could see an increase in home prices in 2012. In most case the Asheville area is normal not ranked because of its size. But if it was ranked I believe it would be right up there in the top 10.

Land values in some areas are starting to stabilize especially farm area in Western North Carolina and the Mid West as investors are trying to buy up land at the low prices before prices increase. In the mid west prices are climbing 25 percent higher than a year ago because of rising prices in corn and other agriculture has sent land prices soaring. 

We are starting to see investors take advantage in other areas in real estate now that bank owned inventory is shrieking.

Thought you would find what the average home prices are in other areas, Asheville average price in 2011 was $187,400.

• Hawaii: $667,299.33
• Washington, D.C.: $393,453
• New Jersey: $344,240.85
• New York: $340,124.50
• Maryland: $328,650.89
• Connecticut: $326,416.85
• Virginia: $312,930.83
• California: $310,676.35
• Utah: $276,211.67

 So is it time to buy or sell the answer in my opinion is Buy now and if you do not need to sell hold on another six months to a year.

Western North Carolina Pending home sales continued to increase again in November by 19% and reached the highest level in nineteen months.

The Pending home sales are not homes that have closed but properties that went under contract and are a good indicator for things to come.

 With the Asheville, Waynesville and Maggie Valley housing affordability at a record high as Buyers take advantage of the current opportunity of low prices and interest rates.

I believe the sustained rise in contract activity suggests that closed existing home sales, which are the important final economic impact figures, should continue to improve in the months ahead locally and nationally as home sales continue to improve in areas like Florida, Texas, Ohio, Detroit and Georgia will influence Asheville home sales to increase quickly.

As buyers continue to feel good about the housing market and saying it’s a great time to buy. However sellers on the other hand are not happy unable to get even close to the price they want. With 20% of all home owners underwater many lenders seem to be willing to work with sellers to lower the mortgage amount allowing them to sell their home without showing up at closing with their check book.

So all indications are this is the time to buy and sellers will start enjoying stabilization in prices soon. Last week while showing property to a couple we had two properties go under contract and several months ago I wrote an offer on a home for a Client to have a full price cash offer come in at the sometime. I believe the last time that happened was 2006.

I appreciate the tone my dear friend. I sure understand it saddens me as well to see what is happening to our country. What our founding fathers had in mind and what has been going on most of my life time is not the same. Our country was founded on solid principles that are no longer a part of our government. The word God is not allowed on any governmental walls, pray is not allowed in our schools and for the people is gone.

The new survey shows that those in Washington serving the people that over 75% become millionaires while in office and on the average from 2009 to 2011 they have enjoyed a 15% increase in salaries and the average American has seen an 8% decline in income, that is if you are working. Those in office increase their wealth by inside trading (this is illegal).

The speed of Tweeting, Facebook and Blogging is a magical way of getting heard and rather than using it to ransack malls and crashing parties it could be used to change our government but people would rather just complain. I do not believe writing to them will help as it is like writing to a life time thief and asking them to stop. So when do we stop blaming a party and demand a change in the government. Obama blames Bush andif there is a new President they will just blame Obama.

There will be a day Ben, that the people will want to over throw the government and I do not believe it is too far away. I do not believe either party will ever change to serve the people their mold of dishonesty, lying and cheating is an acceptable way  and it is too deep to change now.

No wonder the republicans do not want to tax the wealthy (I am sure many Democrats are relieved) because it would affect most of our government officials.

So there you go as Bush said in an interview it with Barbara Walters, all this is not my fault it just happened on my watch. Really!

Lenders are twice as likely to give a loan modification through the program ‘Foreclosure Counseling”.

This program provides foreclosure counselors to assist home owners on budgets and guide them to avoid foreclosure. 

Those home owners who have participated in the program have found they are more likely to stay current on their mortgage after the lender has made the modification.

It seems lenders want to work with those after the counseling and are willing to adjust the loan to make it more affordable and can have a major effect on your monthly payment.

Making Home Affordable is a key part of the Obama Administration's effort to help homeowners avoid foreclosure. If you are struggling with your monthly mortgage payments or have already missed a payment, now is the time to take action. You can call 888-995-HOPE (4673) or go to http://www.makinghomeaffordable.gov/pages/default.aspx for more information.

If the above is of interest to you this could be a wonderful opportunity to start the New Year fresh and on the road to a great start without the pressure. I would suggest contacting them sooner that later because budget cuts are around the corner and the Making Home Affordable will most likely not have the same amount of funding for next year.

Asheville

Asheville Foreclosure filings continue to decline in North Carolina. In the month of November, foreclosure filings in North Carolina totaled 2,710- down 34% from a year ago and Asheville had 39 down 42% over last year. Haywood County did not have enough to rank. In Asheville one out of every 1342 home received foreclosure notice for November.

Home resale’s moved to a 10-month high in November, the latest in a series of strong showings from the housing sector.

November closings were up by 18% over last year for Asheville, Waynesville and Maggie Valley area combined. December is pacing to finish the year even higher than November. January closing is always strong because of homes going under contract in November and December.

If this year’s trends continue to into next year as the economist are predicting 2012 could be the beginning of a turnaround for the Asheville real estate market. Prices as predicted will stabilize in spring of 2012. So those of you that have purchased a home this year congratulations as you have most likely have taken advantage of a once in our time opportunity. Those that are still considering a purchase before prices stabilize or increase it would appear this is the time.

Here is how it stacks up for the type of buyers.

• First-time buyers : 35% of home resales, up from 34% in October 2011
• Repeat buyers : 46% of home resales, down from 48% in October 2011
• Investor buyers : 19% of home resales, up from 18% in October 2011

With mortgage rates a 60 year all time low keeps homes extremely affordable.

New home starts increased to 447,000 units in November a 2% increase from October.

New home starts are defined as breaking ground.

These figures are the third straight month for new home starts. This seems to be holding true in Asheville new home starts as well. Data has been trending better since September with sales volumes rising and home inventories falling. Basic economics tells us that home prices should soon rise.

The low mortgage rates should keep homes very affordable with a 30 year fixed under 4% and an ARM at 3.5 fixed for 5 years not closing costs will continue to help homes sell and as predicted for spring 2012 see homes prices level off. This will defiantly improve the ability for the Seller to sell closer to their asking price by midsummer.

Here is a good example of what lower interest rates can mean to a buyer

• Midyear at 4.5% 2011 : $200,000 mortgage costs $1,013.37 per month
• December at 3.7% 2011 : $200,000 mortgage costs $920.57 per month

This is a savings annually of over a $1,000.00. Or your buying power increases by over $20,000.

For example if you qualified for a $200,000 mortgage at $1,013.37 a month you can now purchase a home worth $20,000 more.

This is the time before interest rates increase and prices stabilize to consider buying that home. Most likely if you’re renting a home purchase would be well worth the investment just in a reduced of rent but the tax deductions and future inflation would also be nice to have.

I spend a lot of time reading WSJ, Nation Real Estate articles and I am blogging nothing that has not already been published by some of the economic experts the only difference is I am in the Streets experiencing this and I can tell you it appears based on what I am seeing next year will begin the turn around with home sales.

There are so many things to do in Asheville around the Holidays and the downtown area is so charming this time of year with all the decorations.

Here are some suggestions of ways to celebrate Christmas in Asheville North Carolina.

• Christmas at Biltmore Estate – Asheville’s largest home is decked out in festive finery. Candlelight Evenings are especially magical. Continues through January 1.
• Shop Downtown Asheville – Asheville downtown has more than 200 shops, 30 art galleries and a dozen antique stores all locally owned.
• Gingerbread Houses at Grove Park Inn - This incredible display of gingerbread houses from the National Gingerbread House Competition at the famous Grove Park Inn
• Shop Biltmore Village – Biltmore Village has more than 40 unique shops and 10 cafes and restaurants. Most businesses are housed in historic cottages and buildings.
• Asheville Artists - Over 100 galleries and even more artist studios, you will need plenty of time for exploring.
• 6. Antiques - Antiques District in the Biltmore has 13 stores within a mile and a half are in the Biltmore Estate
• Christmas Trees - North Carolina is the number 2 state in the country for growing Christmas Trees – You can pick the perfect one for your home.

Here are some suggestions to take the family after all that hassle of shopping, getting the home decorated, rapping up business and start truly enjoying the Christmas spirit. Do not forget Waynesville’s historical downtown if you want to see a post card perfect town this is it.

Merry Christmas

Back in the 1950’s my parents purchased a home they paid 4.5% interest for 40 years and that was a special government program that was only honored for one year trying to get homes sales going again. I remember my parents bragging to people on the low interest rates.

Well over the last year we have seen some interest rates at a 60 year low. A 4%, 30 year fixed plus a Five year fixed 3.5% ARM.

So listen to this - Fixed mortgage rates dropped even more this week, continuing the trend in reaching new record lows. The 30 year fixed-rate mortgage averaged 3.94% this week while 15 year rates sank to 3.21%.

Could they drop lower? Here is the deal; normally buying a second home your interest rate would be about 1% higher so based on the current interest rates you would still fall under 5%. Most likely around 4.5-4.7% for a 30 year fixed mortgage and even lower with other available packages. Many are taking advantage by buying their Asheville Mountain log Cabin and putting it into a rental program until they retire and use it as added income.

Again I ask will they drop again. What do you think?

As Foreclosures continued to fall as it has over the last year effecting the number of Bank Owned properties coming on the market for example in November, dropping 3% from October and 14%  compared from a year ago. Asheville real estate seems to stay with the national average.

Repossessions are down 45% compared to September 2010. But a new wave of foreclosures may be looming in the New Year, experts warn. However I do not believe this will have an alarming effect on home prices. As in many areas home sales are starting to increase and appraisers will have more inventory to use as comps rather than Bank Owned, Short Sales and Foreclosures.

As missed payments drop as they have so far this year by 8% with lenders this will also affect the number of foreclosures. Another good sign for sellers as home price per economist will start stabilize by spring of 2012.

Because of the shortage of good bank owned properties over the last several months when a new wave of foreclosures becomes available they will be gobbled up quickly by investors that have been waiting.

This is the time to get serious about buying as the economy improves interest rates will increase and prices will stabilize. When prices stabilize in most cases that is the beginning or prices going up as inventory depletes.

After my last Blog about the Federal Reserve I thought I would follow up on their Tuesday meeting. The good news is we will continue to see low interest rates until mid 2013. This does not mean as the economy improves and unemployment continues to drop we will not see some increase. A 1 or 2% increase can make a big difference to a family trying to qualify for a loan when their monthly mortgage payment increases $200.00 a month. Most likely those that are on the fence of qualifying may need to adjust to a lower priced home. Anyways the Federal Reserve will keep interest rates low and opted to not take any new measures to help the economy, as they feel the economy is already showing signs of improvement.

The Federal Reserve said the federal funds rate which serves as a benchmark rate for many types of loans, including mortgages will remain near zero until mid 2013.

The Fed feel the economy has steadily been showing signs of improvement and is on track to post its strongest gains of the year in the final months of 2011. This is encouraging and will set a nice pace for 2012.

As I look at properties for Clients there are more now than ever going under contract and the Holidays is always a strong time for Asheville real estate sales.

As Florida and other areas improve in home sales Asheville Area second home sales will improve and as the baby boomer continues to think about retirement the Asheville mountain area will continue to increase in real estate sales. It would appear that 2012 will be the year we start see a taste of an improving real estate. As predicted by the economists spring of 2012 will see home price stabilizing.  

So things are looking up for the Seller as bank owned property inventory depletes along with general homes for sale is will allow the seller to wait for the right buyer willing to come closer to their asking price.