Quick Fact About '08

Once again, Island Realty was the clear leader east of Cowan Creek both in sales volume of $32,000,000 and number of units closed at 37. Our nearest competitor had volume of $19,000,000 closing 19 units. Given the challenging economic times I am very proud of these numbers and clearly we are keeping our market share.

Have we seen the bottom of the market? Who knows, certainly not me and no one will know until it has passed. This is just a guess, I suspect the real esate market graph will look somewhat like a V. In other words, if (and I hope it doesn't) it continues to slide downward, when it hits bottom, I believe that with all the pent up demand, it is going to blast back.

Think about it, the front end of the baby boom is starting to retire, they are beginning to inherit, their kids are off their payroll and they have their 401 k money etc. So many people have been sitting on the sidelines that when this thing turns, I suspect they will all be jumping in at once. The simple laws of supply and demand tell me that all that pent up demand will drive prices up. So what's the takeaway here? It's a buyers market, so buy. Buy now while you can buy low, before the prices start rising, before the inventory decreases, before interest rates begin to creep. Speaking of which, I just closed on a great piece of property, so my money is indeed where my mouth is.

Feds Cut Rates

The Federal Reserve's cut in Key interest rates makes 30 year fixed mortgage rates the lowest since the 1960's, sparking a surge in homeowners looking to cash in and refinance. Some lenders are now offering rates as low as 4.5 %. Last March, I refinanced my own home at 5.5% and was thrilled with that rate. Does it make sense to seek out a refi? It could depending on what your current rate is, how long you plan to be in your home etc. One rule of thumb that I hear a lot is that if the difference in your current rate and the new rate is at least 1.5% you should consider it. You need to determine how much the refinance is going to cost you in real costs and how long it will take to realize any savings. In other words, if it cost you $1500 to refinance and you are going to save $100 per month, it will be 15 months before you realize any true savings.

Another good reason to refinance is if you are in an adjustable rate mortgage (arm) that is getting ready to reset, already has or in general has simply become too expensive. Lenders are stricter with credit, requiring higher credit scores and borrowers equity position of at least 20%.

All of this leads one to believe there is a strong possibility of a big refinance boom. If you're trying to sell and haven't been able to this could really help you out. With lower interest rates there are more able borrowers out there to buy your home. The other possibility is that if you have enough equity in your home, you can pull some out to make improvements. In any event, the loosening of the credit hopefully will help stimulate the housing market followed by the rest of the economy.