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I helped a great family from NJ with a visit to Raleigh last weekend and just got a very nice thank you! I’d like to think of this great gift from my clients as the fruits of my labor, but I think it’s more seasoned with distinct notes of aged oak.  The fruits of our labor!
I spoke with reporter David Bracken at the News & Observer on Friday after he reviewed August home sales data. He was seeking further opinion about where the Greater Raleigh real estate market is heading. Read Triangle home sales rebound and see what I had to say. I’m excited sales numbers were better but the truth remains that to sell in this market your home has to be the best value. Buyers have too many choices. Linda Craft reported to our listing customers earlier this week that 624 new listings were added to MLS and 294 listings were sold last week. We both agree that we would love to start selling more houses than we list! This does not mean you can run out the door and start making ridiculous offers on listed properties. Crazy offers really don’t get you anywhere. But, as a seller it means you need to listen to what buyers are telling you and respond quickly! I recently sold several properties with multiple offers by helping our sellers do just that. There are still hot properties that are selling fast and there is a strategy as to how it is done. In a tweet this morning from WSJ real estate reporter Nick Timiraos: Existing home sales were up in August by 7.7% from July. Should be short lived. How many contracts were signed in August — prob not a lot Home prices in the United States were around 2.9 times a buyers income from 1985 to 2000, in a study reported on Zillow.com
The ratio changed over the last decade where home prices peaked nationally around 5.1 times a buyer’s income. Since the the bubble burst, the nations average is closer to 3.3 times a buyer’s income. It is important to note that this ratio can change in a region as a result of fundamental shifts in employment base, etc… As Raleigh stabilizes, it may not go back to it’s historic norm as they have marked it.  Raleigh home prices appear 5% above their historic norm previously set between 1985 and 2000 So, is it a good time to buy in the Raleigh Market? The fact that they show Raleigh as above the norm reflects what we are seeing in our market: Home prices are still moving backward. Now think in terms of the ideal scenario of buying at the bottom and selling at the top. It’s just that, an ideal. Ask an investor and they will tell you that you buy on the way down AND on the the way up, selling as you go. People are continuing to move to our area and projected growth for the Raleigh area remains high. We may not have hit bottom, but my research shows me we are close. Factor in the low cost of financing and it’s a no-brainer for a home buyer with plans to own their home for 5 years or more. I would be cautions if you don’t have any longer term plans. For those of you in the Raleigh area considering selling, determine your goals. Waiting a year or two won’t do you any good. If you are going to wait, I suggest you think 3 to 5 years out. Even as home prices hit bottom, our supply of homes for sale is still very high. We can expect home prices to stay relatively flat for some time with little appreciation. Read more from the study by Zillow.com: http://www.zillow.com/blog/2011-01-11/zillow-names-10-best-places-to-invest-in-2011/ Inventory of unsold homes is at the lowest level since the housing downturn began. “It’s good news, maybe” according to Wall Street Journal real estate writer Nick Timiraos.
According to Triangle MLS, there are 7,660 homes for sale in Wake County and there have been 982 sales closed over the last 30 days. Based on that selling rate, that reflects a near 8 month inventory of homes for sale in Wake County. The last 30 days of closed home sales in Wake County using records from Triangle MLS looks like this:  Average Home Sales Price Wake County for the last 30 days
My opinion? There are a lot of good homes for sale but until they price their homes to what the market is telling them, they will not find a buyer. Statistics show that in 2011 only 28% of the houses listed for sale on MLS will sell. To get into that lucky 28% sellers have to watch the subtle changes that happen each week and move quickly to stay ahead of the depreciating market. Curious where the proposed South Eastern Expressway will go? Check out the Google Earth presenation from the NC Turnpike Authority. The video highlights the protected corridor for Phase I and a possible corridor for Phase II. These alignments are conceptual and have not been officially selected for the project. The NC Turnpike Authority has stopped analysis of all alternative routes that are north of the protected corridor (AKA the “Red Route”) as mandated by state law. Check out more about the I-540 Triangle Expressway from the NC Turnpike Authority. Closed sales for Wake County through April 2011 are down 16.6% compared to the same period last year. The good news is that there are 22.8% fewer new listings for the year. The bad news is really unknown: How many people are sitting on the sidelines waiting for the market to turn around before they sell? Wake County includes Raleigh, Cary, Wake Forest, and 12 other towns in the surrounding area. Here’s what Wake County real estate looks like so far this year:  Click to enlarge Linda and I are fielding a lot of phone calls from potential sellers curious to know if the market is improving. The answer I want to give you is yes AND no. The only way I can really answer that question is to ask “What kind of seller are you?” A lot of sellers tell me they aren’t in a hurry to sell. Others are in need of moving quickly due to some sort of distressed. Then there is a 3rd kind of seller, one that is willing to part with their home accepting whatever the market will give them regardless because they just want to move. What kind of seller are you? I track Raleigh real estate data and news about home inventory levels because it helps my clients stay competitive in a market where 20% of real estate transactions are some sort of distressed sale. But, there’s more to look at than just what’s listed for sale and what’s recently closed.
Many sellers in Raleigh are waiting for better days to sell, but that may be a mistake. Better days are coming, but not before home prices endure the doldrums that many economists predict. Banks are struggling A recent report in the Triangle Business Journal highlights some of the challenges Charlotte based Bank of America faces .
Notice the number 1,400,000! That’s significant volume of mortgage loans past due.
The Double Dip
The latest Home Data Index™ released by Clear Capital shows that home prices have dipped 0.7% below prior lows experienced in March 2009. This is the official Double Dip in national home prices we have been hearing about in the news. The Case for Selling If you are considering a move in this down market, the news is not as bad as you might think. Zillow.com economist Stan Humphries makes The Case for Selling in a Falling Housing Market and shows that there’s no real advantage to waiting. Put aside your fears of losing money on lower prices and consider the actual costs involved.
Make Peace Don’t get hung up falling prices. Mortgage rates are very low right now and home prices have dropped about 25% since the market peaked in Raleigh in 2007. If you are considering a move, then look at the overall cost of your move and not just home prices. Is commuting an issue? How about schools? What about association fees? Even in this recession, Raleigh is a growing city and the new home market is important to our economy. Following are a few notes about the current state of our new home market: 1st quarter 2011 compared to 1st quarter 2010:
Closed sales comparisons will be swayed in the 2nd quarter as orders for new homes in 1Q/10 were increased due to the home buyer tax credit incentive. New home sales are struggling to compete with re-sale properties that are selling at distressed prices. Foreclosed and short sale homes account for approximately 20% of current real estate sales in the Raleigh area.  1Q New Home Sales History- CLICK TO ENLARGE I have updated my graph of monthly showing appointments to include March, 2011. These numbers represent the number of appointments that real estate agents have scheduled to view properties for sale with their clients. The entire Triangle region is included here along with areas of Johnston County, Chatham County, Granville and Franklin Counties. As expected, showings have declined. This is no surprise since we are still up against the tax credit incentive that was in place for home buyers last year.
 Click to enlarge The tax credit ended April 30th of last year so next month we can start comparing apples to apples. A recent report in the News & Observer shows that first quarter home sales for the Triangle market are down 8% compared to the same quarter 2010.
The good news is that the number of listings on the market has dropped. I was afraid that we might see more listings this spring but as it stands right now. Inventory is down to just under 9 months from other reports I have seen. The time to buy really is now, now joke. All of the numbers favor buyers and our office is busy with new clients. As a matter of fact, we had 244 leads come through our office last week! |
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Stalk Jason