Real Estate Market Watch…The promise of a new year

by Wes and Cathy Cleary

We don’t have a crystal ball, but the future of real estate here looks very promising. There are numerous factors in play, which should ensure growing demand in our region. 

The town of Lake Lure is focused on rebuilding and restoring vital infrastructure with key projects for the dam, sewer system, wastewater treatment plant, as well as strengthening cellular and broadband internet service. The Rumbling Bald on Lake Lure community is also underway with its community wide broadband internet installation project.

Another development related to financing options, new conventional loan limits, Fannie Mae credit updates, and more affordable investment and second home loans should also help facilitate home sales. 

According to Karen Maxwell, Sr. Mortgage Banker at Atlantic Bay Mortgage Group, in Rutherfordton, the Federal Housing Finance Agency (FHFA) announced that conventional loan limits are increasing for 2022 to $647,200. Now more homebuyers can apply for conforming mortgages instead of “jumbo” loans. This means buyers can write an offer on a property with a sales price of $809,000, put 20% down, and still obtain a conforming loan with no private mortgage insurance. Or they can make an offer on a sales price of $681,200 with only 5% down and finance using conforming instead of jumbo loan guidelines, which generally have stricter underwriting standards and require more money down.

Fannie Mae credit updates make homebuying more accessible after announcing a way to help underserved borrowers. Consistent monthly rent payments of more than $300 will now be allowed to count toward loan applications. For buyers with solid rent payment history, this can provide a major boost to their loan eligibility.

Investment and second home loans are also now more affordable since the Treasury and the FHFA suspended January 2021’s controversial Preferred Stock Purchase Agreements (PSPA) amendments, restricting Fannie Mae and Freddie Mac purchasing guidelines. Now buyers who wish to purchase second homes and investment properties can get regular agency rates and terms, enjoy better loan-to-value, and borrow more money at a cheaper rate.

Inventory for single family homes remains extremely low. While new listings should increase, the pace at which new homes come on the market is not keeping up with sales. For the 28746-zip code, there were 278 closed home sales in 2021 (data as of Dec 10th) with an average home price of $519,028.00. For the same period in 2020, there were 300 closings, yet the average home price was $459,505.00. A recent report by the Canopy MLS Realtor Association states experts are expecting an especially busy housing market this winter. Total existing home sales will top the highest level in 15 years, according to the National Association of REALTORS®, which predicts home prices will continue to increase in 2022, albeit at a gentler rate compared to the record-setting pace of this year.

Wes and Cathy Cleary of Team Cleary Real Estate, Inc. are full-service licensed NC & SC Realtors® who live in Lake Lure.; call 828-785-2115 for Wes or 828-808-6790 for Cathy;

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