Great News!  Interest rates have been reduced and the fed has cut the key lending rates.  The national average for a 30-year mortgage is at 5.06% – the lowest since 1960. 

Great for Real Estate

Obviously this is great for the real estate market because it makes housing more affordable.  In fact, housing might be at an all-time low affordability rate adjusted for inflation when you consider that prices are off 25%-35% from several years ago and with interest rates down as well the cost of ownership is down tremendously. 

Help Around the Corner

Recently I have felt that the market has not been slow because of interest rates, but slow because of consumer confidence.  Maybe this will help with consumer confidence.  We are willing to take any help we can get.

One of the problems we have had in our market are bank’s reluctance to lend money.  In fact, there are only several banks on Hilton Head Island doing lot loans at this time and they have restrictions on what they will do.  Lot sales are down 92% this year compared to a 10-year average.  If you cannot get a loan on a lot, most people are not going to purchase one which makes the market worse and drives prices down.

It is about time we got some good news; most news recently has been very negative.  All you have to do is look at the front page of the newspaper and it is one negative headline after the other.  This has had a major effect on consumer confidence driving it to a 30-year low.