Money Matters....

Recently I spoke with Martin Barbee, President and Sr. Loan Officer of Intracoastal Mortgage about the volatile market we are experiencing:

MR: Martin, as an expert in your field, how would you define our times?

MB: We are in the grips of historic volatility in the financial markets. There have been large swings in stock prices as well as rates. Unfortunately, I don’t see it ending for some time. A common question we continue to get is why rates are going up when the stock market is going down. A down stock market has historically pointed to lower rates but the game is different.

MR: How so?

MB: A guarantee of bank debt is a safe haven for investors in lieu of mortgage backed securities. Not good for rates.

The government is issuing large sums of treasury debt in order to raise the cash necessary to inject into the financial institutions and support the overall $700 bailout plan (not good for mortgage bonds)

Overall risk in mortgage backed securities remains high even with the explicit guarantee of the Federal Government because the underlying asset could still be depreciating. With the new options of essentially “risk-free” debt why take a chance.

Some large market makers in mortgage backed securities (Lehman Brothers and Bear Stearns) are gone so there are fewer buyers and a smaller market. Remember when the price of a bond goes down the yield (rate) goes up.

MR: So, when do you see rates stabilizing?

MB: When the market establishes a firm floor and the fundamentals return, we should see a more stable rate environment and one that is lower than current levels.

MR: Any time soon?

MB: We are already seeing some positive improvement with rates. That’s not to say we won’t continue to see them jump around but the trend is positive for now.

MR: Should buyers hold out for the stabilization? Or should they purchase while the selection is good and rates are still relatively low?

MB: Rates are still very low on a historic basis. I would encourage buyers to budget off of the current levels rather than hold out for rates we saw in years past. Take advantage of the incentives and selection while they still last.

For more information on mortgages or the market in general, feel free to contact Martin directly at martin@intracoastalmortgage.com or 910.256.7773

Market Update in Marsh Oaks

While the economic world may be in turmoil, values still hold in Marsh Oaks. This is a great time to buy and savvy buyers are buying value, not just looking for the best deal on paper.

Within the last thirty days of this post, 4 homes in Marsh Oaks have been put under contract, one was on the market less than 30 days, and one was put under contract before it even hit the multiple listing service.

In the last thirty days, 3 homes have closed in Marsh Oaks. One of those homes was a pre-sale, and another sold for 107.75% of asking price! The average percent of sale price to list price in September was 101.8% .

In the SaltGrass section of Marsh Oaks, we are sold out of standing inventory (don't worry, new construction should be done in 6 months!)

If you are looking for a home that will hold it's value, as well as provide a great neighborhood atmosphere, you really should check out Marsh Oaks!

Marsh Oaks is STILL a great investment!

I've done a little research to confirm what I already suspected: Marsh Oaks is a great investment. I've looked at 19 of the homes that have re-sold within 2007 and calculated their return on investment. The average return on investment is 30%, the average number of months for the return is 35. (Click here to see the details of the return on investment in Marsh Oaks)


So here comes the logic (pause for effect)...

If the best time to buy is during a buyer's market, the best place to buy is Marsh Oaks! Imagine what some of these returns would have been if the homes had been purchased in a "buyer's market" and not a seller's market!

If there are any questions I can answer for you about Marsh Oaks, please do not hesitate to contact me!