Archive for December, 2007
Seasons Greetings
December 25th, 2007 Categories: Odds and Ends
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Merry Christmas | Blessings of 2007
December 21st, 2007 Categories: Odds and Ends
As 2007 nears its end, I just wanted to take a moment and let everyone know how much I value your reading and commenting on my blog. And I sincerely appreciate your support of my business.
God has blessed me, both personally and professionally, in so many ways this year. And for that I am humbly grateful. In that spirit, I would like to pass along a few things I am personally thankful for this year, in the hope that it will encourage you to think about the blessings in your own life.
2007 has been an interesting year for my career in many ways. Over the past five years I have built a very robust relocation business. What a pleasure that has been. I have had the honor of helping dozens of wonderful families move their lives to our area.
During the past 6 months, that relocation business slowed down quite a bit as clients in struggling real estate markets across the country experienced extended delays in their plans while they waited for their homes to sell. I’m pleased to report that things have begun to improve for many families who found themselves in this situation. A number of clients were able to find buyers towards the end of the year and move forward with their plans to relocate to the greater Raleigh area. A true blessing for everyone involved!
If you’re still waiting for your home to sell somewhere around the country, hang in there. It will happen. Keep working with your Realtor to get ahead of the market and capture the most money possible. It can be done.
One blessing that I am particularly thankful for is the dramatic increase in referral business that took place just as my relocation business began to slow. The highest compliment I can ever be given is for someone to recommend me to a friend or family member. This surge in referrals came at the perfect time… just when I needed it most. Thank you to everyone who referred clients to me in 2007!
Another blessing has been the successful launch of RaleighRealEstateTalk.com. This new website, with a blog as its main focus, has allowed me to greatly expand my reach to people searching the Internet for homes. It also allows me to share information about the area and real estate buying and selling tips with all of my readers on a regular basis. A very special thank you to everyone who has taken the time to read what I write, comment on my articles, and especially those who have sought my help with their real estate transaction!
I sincerely hope that you too have enjoyed many blessings in 2007. God’s grace is all around us. I would appreciate it very much if you could take a few minutes and leave a comment below about how you have been blessed this year. My hope is that there will be positive comments left here from dozens of people sharing the good that has happened in their lives during 2007 and that it will be yet another blessing to all who read it.
Merry Christmas to everyone and I’ll be back here, writing again, right after the holidays. I look forward taking RaleighRealEstateTalk.com to even higher levels, and sharing even more about the Raleigh real estate market with all of you in 2008!
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Why Are New Homes on Such Small Lots
December 17th, 2007 Categories: New Construction Homes
I cannot tell you how many people start their home search in the Raleigh area looking for a lot with acreage. If not acreage, then many people want at least a 1/2 acre lot with a large private back yard. Of course, many of these same house hunters want a nice neighborhood with a pool, tree lined streets, and they want to be very close to shopping and restaurants.
I can’t say as I blame them. Heck, that description sounds pretty good. And with the right budget, it is available and obtainable. But is it reality when there are financial constraints… e.g, how much house you can afford? So that you’ll be more empowered to make wise choices when shopping for a new home, let’s discuss the reality of new construction and how the cost of a home gets distributed between all these things.
When a builder wants to build new homes in Raleigh, or any other city, the very first step is to find suitable developed land. I say developed because most builders do not have the financial resources or the expertise to put together a planned neighborhood on their own. So, builders almost always work with a developer to get building lots.
The developer is the person, or company, who takes the initial financial risk by purchasing a large tract of land and installing the infrastructure for a neighborhood. This usually consists of streets, run-off water management systems, sidewalks, street lighting, and any amenities such as lakes, common areas and parks, pools, tennis courts, and club houses.
Once this has been done, without any financial return to the developer, building lots are ready to be recorded and sold. Prices for a 1/4 acre building lot will typically run anywhere from $40,000 to $75,000 in what most people would think is a nice neighborhood that happens to be anywhere close to shopping and restaurants.
The $40,000 lots are typically in neighborhoods where there will be fewer amenities and the $75,000 lots will deliver more amenities. The average construction costs, including the lot, typically run anywhere from $110 to $150 per square foot. The construction cost is also where the finished amenities and features of the home start to make a difference in the price. One more thing to keep in mind is that a good economic rule of thumb is that the lot should only be about 20% of the price of the finished product.
Using these figures, lets do an example of each extreme.
First, the lower cost model. Assuming $40,000 for a lot, $110 per square foot construction costs and following the 20% lot cost rule, here is what we will end up with. The total finished cost of this new home would be about $200,000 if the lot is 20% of the cost. ($40,000/0.2) At $110 per square foot, (200,000/$110) the house would be about 1818 square feet. Because the lots were lower in cost, it is probably fair to assume that the developer had to omit a few of the higher end amenities such as pools, parks, lakes, and tennis courts.
Now let’s look at the higher cost model. This time, let’s assume $75,000 for a lot, $150 per square foot building costs, and let’s follow the same 20% lot percentage rule. The total finished cost in this case would be $375,000. And, at $150 per square foot, the home would be approximately 2500 square feet. Now, because the developer had almost double the money to spend developing the land, it would be safe to assume that higher end amenities would start to show up in the neighborhood.
I hope these examples help explain why a large building lot in a new neighborhood is difficult to have at an affordable cost. It’s not impossible, it just costs more. I also hope these examples help to illustrate why there can be such a wide variance in what you get at any given price point in new construction.
Are there exceptions to the basic rules of home construction I have given here? Sure there are. Location is the largest determinant of price for any real estate, and that includes land that can be developed into a neighborhood. Construction methods can also create variance in the numbers. A crawl space foundation costs more than a slab. Brick costs considerably more than vinyl. Granite counter tops cost more than Formica. And so on.
There are a lot of moving parts, so to speak, in any residential real estate construction project. And as a result, the price of the finished new home can vary quite a bit. The most important thing to remember is that as the cost of the developed land increases, it has the biggest impact of any factor on the finished cost. In our lowest cost example, a 1/2 acre building lot could end up costing $80,000. If the 20% rule is followed, now we are talking about a $400,000 house, rather than a $200,000 house.
If you want to discuss how this works and the best way to use it to your advantage when buying a home, give me a call at 919–602–7000, or send me an email message. Knowledge is power and a thorough understanding of new construction costs will be a big step towards getting the very best deal possible on your next new home.
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Home for the Holidays
December 14th, 2007 Categories: Odds and Ends
I’ve often said that I have the best job on the planet. The past month has re-enforced that belief for me. The reason I feel so blessed to do what I do is that I love doing it and I get to help people realize their dreams. Over the past month or so I have had the pleasure of helping two clients purchase the home of their dreams and arrange for closing in time for them to enjoy Christmas, at home, with their families.
From Michigan to Raleigh
There are some tough real estate markets out there right now. And the Detroit area is no exception. As the automotive industries struggle with a variety of challenges and unemployment rates rise, the inventory of unsold homes in Detroit has also risen as the number of available buyers has diminished.
My clients from the Detroit area were very fortunate and sold their home in a matter of months. They closed a couple of months ago and thought about renting until they could figure out where they wanted to be. But they found the faith to believe we could find the right home for them and instead went into an extended stay hotel as we began the search.
It didn’t take long and they walked into the exact home they were looking for. They knew it was the one as soon as they saw it. The home was under construction and it was about a 50/50 chance it would be ready in time for Christmas. We quickly put their dream home under contract and worked closely with the builder to make it easier for him to finish by mid December.
This meant we had to have financing in place quickly and minimize any changes that the client wanted. I’m happy to report that everything came together and my clients are closing today. Home for the holidays!
From Charlotte to Raleigh
Now I don’t think of the Charlotte market as a particularly depressed real estate market, but my clients from this area had to wait over six months for a buyer. They were so excited when they called about two weeks ago to let me know their home was under contract.
Fortunately, we had been looking for all that time and had narrowed the choices down to a couple of neighborhoods. We got together and looked at the available homes in the selected neighborhoods. These guys had a similar experience to that of my Detroit clients. They walked into their dream home an knew it at once.
In this case we only allowed just over two weeks from contract to closing. Again, the builder and everyone involved rose to the occasion and we are scheduled to close on December 20th. My clients will move in on the 21st and they too will be home for the holidays!
Moving can be a stressful experience. Moving at Christmas can be a very stressful experience. Buy buying a new home is also exciting. Careful planning and having an experienced Realtor who can anticipate problems and keep things moving along helps. It helps a lot.
Merry Christmas to each of these families and to everyone who has found themselves moving into a new home just in time for Santa to visit!
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Merry Christmas From Raleigh Area New Home Builders
December 13th, 2007 Categories: Buying a Home, New Construction Homes
If you are anywhere close to being in a position to buy a new home in the Raleigh area, you need to call me right away! Raleigh builders are doing something very unusual. They are discounting new homes!
In the past few weeks I have written two contracts for new homes at significant discounts. One was a $510,000 custom built home that sold for $465,000. The other was a $240,000 new home that sold for $223,000 with $3,000 builder paid closing costs. Six months ago these builders would not have even considered these discounts.
Why are the prices being reduced now? One reason is a slowdown in buyer demand in the Raleigh real estate market that has been slowly developing over the past 12–18 months. The primary culprit here is people relocating to Raleigh who are having trouble selling their homes in other markets around the country. The number of home buyers affected by this seems to be at an all time high right now.
Another reason is simply the normal slowdown that always occurs during the holidays. The number of home buyers naturally diminishes this time of year. Although, those who are shopping for a home are typically more motivated.
I think the biggest reason is builders simply did not see the slowdown in demand coming. They continued to build inventory. Lots of national builders increased their inventory here because our market continues to outperform most of the rest of the country. Unsold inventory is one of a builder’s worst fears.
The total number of homes listed for sale is currently 8,048. This is down about 5% from a peak about six weeks ago. Out total inventory absorption rate is just under 5 months which is below the 6 month level that technically indicates a transition from a seller’s market to a buyer’s market.
The real estate market in Raleigh is certainly not in any significant trouble right now. Resale prices are still holding up fairly well. I was actually in a multiple bid situation a few weeks ago and the home sold for within 1% of full price.
The bottom line is that interest rates remain at historic lows and new home prices are being discounted. If you are ready, let’s talk about how you can take advantage of these conditions.
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All About Bob the Raleigh Realtor - MeMe Take One
December 6th, 2007 Categories: Odds and Ends
I’ve heard about it. Never was quite sure what it was. Seemed like a strange name for something. Now, thanks to Scott Saghirian, it has happened to me… I’ve been MeMe’d!
Okay, where’s that email with all the MeMe rules again? Here it is. Looks like I need to post 5 things about me that not everyone knows. Here you go…
1. Married to my wonderful wife, Diana, for 16 years.
2. We have 3 cats, 2 of which are Bengals.
3. I’m a Raleigh area native.
4. I was an area manager for ABB prior to my real estate career.
5. I’m an avid runner and can often be seen on the streets at 5:30 am.
Now, for my victims MeMe choices. Be sure to check out these guys in the next few days and see what juicy personal details they are willing to reveal!
Terry McDonald at Charlotte Communities Online
Janice Gagliardi at Port Orange Juice
Mary DeLuca at Beltway Ramblings
Since we’re getting personal, here’s a photo of me in an off the job setting, enjoying my Big Why.
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Where Are All The Chimneys
December 3rd, 2007 Categories: Real Estate Tips
From time to time, when helping a client buy a home in Raleigh, I get someone who really wants a wood burning, masonry fireplace. This is becoming increasingly harder to find. It is almost to the point of being impossible to find unless it is an older home.
Pre-fabricated fireplaces came on the real estate scene a while back and are common place nowadays, even in very high end homes. The first versions of these had an insulated metal flue that was vented through the roof. This was the first time that the masonry, or brick chimneys began to disappear. With the pre-fabricated flue, it became possible to began building the chimneys out of the same siding materials that were used on the rest of the home.
A few years later the direct vent, and then the vent-less fireplaces became available and the chimneys began to disappear all together. The direct vent version used a special flue that makes a sharp turn just above the fireplace and exits the building on the side, rather than using any type of chimney. Of course, with the vent-less, there is no need for a flue at all. This is very useful for economically placing a fireplace on an interior wall of a home.
Eliminating chimneys has certainly changed the look of the modern home. Some think it is for the best while many homeowners long for the old style masonry chimneys like the homes where they grew up.
Looking on the bright side, the modern fireplaces have solved a few building design problems. Masonry fireplaces, especially if wood was burned in them, needed periodic cleaning by a chimney sweep to remove carbon and tar build up. Not doing this on a regular basis could lead to possible fire hazards. Another issue that the modern fireplace has eliminated is chimneys pulling away from the main structure of a house.
Like them or not, the direct vent and vent-less varieties of the fireplace are here to stay. Most builders will not even consider building a masonry fireplace, or they charge so much that it is not economically feasible. Another thing to consider is the the skill set required to build a masonry chimney is probably beginning to fade away. Insisting on a masonry chimney, even at an elevated price, could result in a problematic design and installation.
With the addition of fans to circulate the warm air, and all kinds of automatic ignition and remote control systems for the gas logs in the modern fireplace, for some of us, hauling wood inside to stoke the fire has lost some of its appeal. If a masonry chimney is still important to you, give me a call and I can show you some wonderful older neighborhoods where they still exist.
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A Christmas Carol
October 31st, 2007 Categories: Events
| December 4, 2007 7:00 pm | to | December 12, 2007 7:00 pm |
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You do NOT want to miss this! Ira David Wood’s production of this timeless classic is a Raleigh tradition. Now in its 33rd year this show just keeps getting better and better.
If you are new to the area, come get a taste of the extraordinary talent we are blessed with on the local performing arts scene. And if you are a local and have never seen this Raleigh favorite, you owe it to yourself to enjoy a night on the town with this amazing cast of entertainers.
Performances will be held at the Progress Energy Center for Performing Art’s Memorial Auditorium located in Downtown Raleigh.
Performance Dates/Times:
Dec 4-8 & 10-12 at 7:00 pm
Dec 8 & at 2:00 pm
For more information please visit Theatre In The Park
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