Archive for August, 2008
Saturday Perspectives - Where Does The Time Go
August 30th, 2008 Categories: Real Estate Market Trends
This is an embarrassing post for me. It’s embarrassing because the one right below it is a Saturday Perspectives as well. Where the heck did the week go?
The traditional news media continues to write and broadcast about how bad the housing market is right now. One reason I did not post another article or two this week is because I sold two homes, closed on another, and met with two new clients who are ready to buy right now. That really doesn’t sound like a lousey real estate market to me.
Sales are still down for this time of year, and we still have more inventory than we would like, but homes are still being sold.
Last week I wrote about what is likely to happen when some of the pent up demand in the housing market is released. I think this is starting to happen already. People can only put off big, life changing decissions like moving for so long.
The bottom line is that there has never been better selection in the Raleigh real estate market. Never better incentives. Never more sellers willing to fulfill any reasonable request to get their home sold.
If you need to move, don’t wait too long. Sure, when selling you may have to make some concessions that you might not have to if the market was stronger. But on the buying side you will more than make up for it.
Would you rather wait until the market begins to favor sellers again and then have to choose from a more limited selection for your next home? Maybe even have to compete in a multiple offer situation?
Think you can time the absolute bottom? I hope you don’t miss it because when you see the shift occur, it will be too late.
One last thing to share before I head out for the holiday weekend. CNBC’s Jim Cramer thinks he knows when the housing market will bottom nationally. He is guessing predicting 3rd quarter of 2009. And he has some very interesting reasons for his prediction. Here’s a link to the article.
Cramer Calls The Bottom of The Housing Market
I hope you have an awesome Labor Day weekend! And next week I’ll post more often, no matter how much the slow Raleigh real estate market keeps me busy.
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Saturday Perspectives - Steep Driveways Don’t Matter In A Hot Real Estate Market
August 23rd, 2008 Categories: Real Estate Market Trends, Selling a Home
I’ve sold plenty of homes with steep driveways. The Raleigh real estate market is full of homes with steep driveways. Raleigh is a hilly place. (Is hilly a real word?) One of the hottest areas in town right now is called North Hills. 18-24 months ago, steep driveways didn’t seem to matter. With at least 10-15 showings per month on a well prepared listing we would eventually find people who did not care that the driveway was on a hill.
Now that’s harder to do. For one thing, we typically are not seeing 10-15 showings per month for any listing these days. Here are the number of closings for the past four years, just to give my point a little perspective.
Wake County Closings
July 2008 - 1382
July 2007 - 1945
July 2006 - 2155
July 2005 - 2151
It’s easy to see the trend here, isn’t it? Closings (read sales) are down 37% from the high just a couple of years ago. No surprise that showings are down as well.
With fewer people looking, and more to choose from (inventory is up about 50% too!), things like steep driveways just make it take longer to find the right buyer.
In a case like this, I’m not sure dropping the price will have the effect you might expect. We still need the higher number of showings to find the right buyer. How much does the price have to be reduced to get buyers who don’t exist right now to look at a listing?
Don’t get me wrong. Price still matters. Now more than ever. It just isn’t the cure-all that you might expect in all cases.
I went on a listing appointment last night. Steep driveway. Told my perspective clients the truth. They had a very simple question. “When will all this change?”
People’s desire to move does not go away because of a disruption in the real estate market. It just gets postponed. With such an apparently large number of buyers postponing their plans to move, do you thing there might be a little pent up demand?
It will get better. And it will probably do so without much warning. If you need to sell your home in Raleigh, I wouldn’t necessarily wait. Take a look at the numbers. 1382 people closed on a home in Wake County last month. Your home could have been one of them. Just know that if it has a birth defect, like a steep driveway, we might be in for a longer wait.
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What Does The First Time Homebuyer Tax Credit Mean for Raleigh Area Homebuyers?
August 13th, 2008 Categories: Buying a Home, Mortgage and Finance
Well, it basically means you can get up to a $7,500 break on your taxes if you purchase your first home between April 9, 2008 and July 1, 2009. The tax credit I’m talking about is part of the Housing & Economic Recovery Act of 2008 recently signed into law by President Bush.
As you might expect with the government, there are a few things about this seemingly generous offer that are not exactly as you might think. Here are some important facts.
Who is a first time home buyer?
Well, you would think it would be anyone who had never purchased a home before. Someone buying their first one. Not exactly. For the purpose of this tax credit, a first time home buyer is defined as anyone who has not owned a home in the past 3 years.
What type of home qualifies?
Okay. They did keep this part simple. Any home used as a principle residence. If your very first home will be an investment property that you lease to others, then technically it would not qualify. Other that that, any single family, or condo or townhome does qualify.
Are there income limits?
Yes. Single taxpayers with incomes up to $75,000 and married couples with combined incomes up to $150,000 qualify for the full credit. The amount of the credit is phased out over these amounts, but you may still qualify for a partial credit.
Do you have to pay the money back?
Well of course. I mean, this is the IRS, right? The good news is that you have a very long time to repay the money and it is interest-free. The amount must be either paid back over 15 years (that would be $500 per year) or in full when the home is sold.
Will this be a benifit to first time home buyers?
I think so. I remember the first home I purchased. $7,500 interest-free for 15 years would have come in handy.
Will it do much to stimulate the housing market? I guess we’ll have to wait and see. If the housing market is poised for a nice recovery in 2009, like many experts seem to believe, then the market will take care of it’s own issue before any of this has a chance to make a difference.
The bottom line is that if you are buying your first home, congratulations on the very generous interest-free loan from Uncle Sam to help you get started!
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Wake County Home Sales - Months of Inventory for August
August 12th, 2008 Categories: Real Estate Market Trends
In the real estate business, it is said that anything over six months of inventory is a buyer’s market and under six months inventory is a seller’s market. Here’s the scoop on where we are in the Wake County real estate market.
First a little geography for those of you who are not from these parts. Wake County includes Raleigh, Cary, Wake Forest, Apex, Morrisville, Holly Springs, Rolesville, Knightdale, Zebulon, and Garner. So it’s one medium size city and lots of smaller ones. Total population is about 787,000 for the county.
Now the numbers we will need for our residential months of inventory calculation.
- 7,933 Closed Sales Past 6 Months
- 9089 Active Listings
We divide the last 6 months home sales by 6 to get the average sales per month of 1,322.
Nest we divide the number of homes actively listed for sale by the average sales per month to get the months of inventory level of 6.9 months.
That’s 6.9 months of homes currently in inventory
So, according to this calculation, we are officially in a buyer’s market. Does it feel that way to you? If you are trying to sell your home and it has been on the market a while, you would probably agree. I know many of my buyer clients who I have helped negotiate tremendous deals on their homes in the past year or so would also agree.
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Saturday Perspectives - When Selling a Home In Raleigh Remember to Finish Strong
August 9th, 2008 Categories: Selling a Home
Selling a home in the Raleigh real estate market isn’t as easy as it was a year ago. Sales are down and inventory is up. Not exactly a winning combination, is it?
But does that really matter? The local real estate market is what it is. I don’t have any way to change it and neither do you. I wish we did, but we just have to deal with whatever it is… today.
If you need to sell a home because of school, or a job, or for a life changing event like marriage, or the birth of a child, then you just have to find a way to get it done. Homes are still selling. I just sold a listing and to be honest, it was the one I thought would be least likely to sell any time soon.
The simple truth is that you just have to put your home on the market and do everything that your trusted counselor tells you he or she knows will work. Prepare it to sell. Paint what needs painting. Fix what needs to be repaired. Price it competitively. Have faith that it will beat the competition and be the next to sell. Somebody’s home will be next. Just do everything it takes to make yours the next one.
It might take a little longer. Be prepared for that. And don’t wait too long to price your home where it should be priced. Every month that goes by is another mortgage payment. Another month of not being where you want to be. And the holiday slowdown will be upon us in a few months. This is the best shot you will have at selling your home this year.
Are the odds against selling quickly in today’s environment? Maybe. And maybe you can beat the odds and finish strong. It costs you nothing to list your home for sale. The prep work is usually things that need to be done anyway so that your home is in good repair and so that you can enjoy it more. If it doesn’t sell right away, what have you lost? When you list it with me, I will take all the financial risk for you, without charging you a single penny.
And don’t forget that when you have the very best product out there, the very best choice and value for the buyer, they will want your home and it will show in their offer and subsequent negotiations. Prepare to finish strong and you probably will.
Have an awesome Saturday!
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Housing Crisis or Numbers Taken Out Of Context - You Decide
August 8th, 2008 Categories: Real Estate Market Trends
I ran across a pretty neat video over on CNBC.com from their Business Nation segment. Financial commentator Dennis Kneal argues that the so called housing crisis in America is no crisis at all. And he has some very compelling numbers to back up what he is saying.
He runs through some statistics that show out of 140 million homes in America, only about 4 million are at risk of foreclosure. He goes on to make an interesting point that I happen to agree with. The real problem is a 53% aggregate run-up in home prices since the year 2000.
That just ain’t normal folks and a correction had to occur. Is it a problem? Yeah. Especially if you are trying to sell your home in a correcting market and only purchased it a couple of years ago. It it a crisis? I’m not so sure that’s the right description.
What we are experiencing on a national level is a very normal market correction. The “invisible hand” that Adam Smith wrote about in his classic, “The Wealth of Nations” is at work doing what it always does.
Of course all real estate is local and the Raleigh real estate market never saw a 53% run-up in home prices. As a matter of fact we saw no run-up at all. We’ve been chugging along at 3-5% annually just like any normal, healthy real estate market should.
Check out the video by Dennis and let me know what you think.
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North Hills 5K Run Walk
August 5th, 2008 Categories: Events, North Raleigh
| September 13, 2008 | ||
| 7:30 am | to | 12:30 pm |
Any runners out there? How about anyone looking for some good family fun time on a morning in September? If that’s you, come on out for the second annual North Hills 5K Run/Walk on Saturday, September 13.
The event is being presented by Trinity Baptist Church, to raise funds for North Raleigh Ministries (NRM). NRM is a non-profit organization to help insure that none of our neighbors will ever have to go hungry. It was established to meet the needs of individuals and families with emergency situations who live in the North Raleigh community.
This is a fairy good size, official 5K race. It will be a timed race for all the serious runners that participate. And if running’s not your thing, just come on out for a walk, stroll, or just to have fun. Last year there were almost 300 participants and this year promised to be even bigger.
Here are the entry fees and participant levels:
- $18 North Hills 5K (the official race)
- $10 Midtown 1 Mile Fun Run
- $10 Senior Stroll (60 and over)
- $5 100 Yard Kid’s Dash
To register, go to www.active.com, click on running and enter North Hills in the search box.
After the race, hot dogs and refreshments will be available. I’m on the lead team organizing the event, so I’ll be there somewhere helping out. I hope to see you there!
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Are Gas Prices Affecting Where Someone Buys A Home?
August 5th, 2008 Categories: Buying a Home
The price of gas getting you down? I try hard to find the best in everything, but that’s a challenge when it comes to gas prices. It has definitely affected my driving habits, and seems to be making a difference in the decision making process for clients buying a home here in the Raleigh area too.
I cover a pretty big area selling real estate. Basically all of Wake County and the edges of neighboring counties as people are referred to me in those areas. From edge-to-edge it can take an hour to drive from one place to another with heavy traffic. Since I can’t control where my referral and relocation home buyers want to live, I find myself doing the next best thing. Combining trips and being a bit more selective about the tasks for the day.
I have noticed a distinct change in the decision making process for many of my clients when it comes to selecting an area in which to live and play. Nowadays many are choosing to make sure this is close to where they work too.
A good example is a great couple I’m currently working with who are buying their first home. We sat down at the beginning had a really good session where they discussed their ideal home and budget with me. Then they defined an area with some fairly strict boundaries based on proximity to their jobs.
As soon as our meeting was concluded, I knew it would be a challenge to put that together for them. I know my market well and knew of plenty of homes, just like they described, in another area. But the commute time would have easily stretched out to 45 minutes or so. We discussed the options and got started looking at homes in their chosen area… close to work.
Just as I suspected, finding the exact home they described, in the area they chose, was just about impossible. They were looking for a newer home with lots of upgrades and modern building materials. They were trying to find this in a specific part of Cary where the homes tend to have older Masonite siding, carpeted floors, Formica countertops, and textured ceilings. We would find homes that had a few of these items upgraded, but rarely all of them.
There were plenty of newer homes for sale in Wake Forest, Fuquay Varina, Holly Springs and Apex with all the features they wanted. I suggested the alternative several times, but it always came back to the daily commute time. This had clearly become the most important criteria for my clients.
After a few weeks, and lots of searching, we found a very good compromise for them. They got many of the things on that initial list of features in their new home. But they gave up a few too. The drive time (and I’m sure the price of gas) played a huge role in guiding their decision.
In the past, clients would settle for 45-60 minute drives on a regular basis to get the home they wanted. It looks like, at least for now, that may be changing.
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