The crystal ball for Chapel Hill housing and mortgages in 2012.

Regardless of the national housing and jobs forecast, all real estate pricing is local.

Bloomberg says that prices will continue to fall nationally in the light of foreclosures not on the market and that the job market is what will drive the local market first, followed by secondary considerations such as schools, convenience to shopping, condition of the house, etc.
 

Locally, at the N.C. Economic Forecast Forum the predictions were no better. At the conference, Bob Ingram, former CEO of GlaxoSmithKline said leadership is about showing what could be, not what is, and motivating others to improve.”If we stress the negatives, it becomes a self-fulfilling prophecy,” Ingram said.
 

Though I don’t want to be an economic cheerleader contradicting the reality of this economy, he’s right.

 

During my career, I’ve observed that even in bad markets, someone is selling a home, someone is buying a home, and someone is making a loan. It might as well be you.

Here’s how to make it happen for you:

If you are selling, don’t fight the market –

1) Price your home correctly. What a home “was” worth matters not.
2) Fix up your house inside, outside, and the yard. If you will be selling within the next three years, one of the regrets I hear most often from sellers is “I just put $_______ dollars into paint, floors, kitchen, bathroom, etc. I wish I’d done that while I was still living there.”
3) Stage and de-clutter.

Next, offer financing incentives that demand attention. For example, offer a “rate reduction” as an alternative to a “price reduction.” Contributing 4% of a price reduction to financing    will reduce a fixed rate by .5% today. That is significant, and gives the buyer immediate benefits, rather than when they sell years later.

 

If you are buying-
Whether you are cash flush or not, ask the seller for a financing concession- it can be enough to cover closing costs and even escrows, or to buy down the interest rate permanently. Don’t be afraid to ask. All the seller can do is say no or counter your offer.

 

For down payment tight borrowers, remember that there are still Zero down payment USDA loans (not available in the city limits), and low down payment loans of 3% to 3.5%. And, the down payment can be a gift from a family member. Combine that gift with a seller closing cost concession, and you’ll be moving into your new home next month.

 

 

“The Fed that will publish rate projections along with its regular quarterly economic forecasts after its next meeting on Jan. 24-25.  They will also make forecasts on the first rate hike. This is to offer more transparency and add confidence to the market. By convincing financial markets it will keep rates on hold for longer than they already expect, the Fed could pull longer-term rates lower.”

My friends at the Mortgage Market Guide predicted:

 

“For the year ahead, we see home loan rates moving a leg lower in the first part of 2012 as QE3 rumors swirl, making for possibly the lowest rates ever. Like all windows of opportunity, this one may be short as well.

If the Fed doesn’t do QE3, we still see rates being very attractive in the first part of year, and then moving a bit higher in the second half of 2012 as the economy picks up. 30-Year Fixed rates may dip down near 3.5% and rise somewhere in the mid-to-high 4’s in 2012 – but not higher, as long as inflation fears don’t unexpectedly rise. “

 

These all add up to huge savings for buyers; faster selling homes, and for homeowners, the chance to “ratchet” down their interest rate even more. It’s going to be a better 2012.