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Realtors take of WRAL report, Mike Walden, housing market worsens in Triangle, bargain place to live, production builders, inventory homes, custom builders drop prices, interest rates
Sounds quite a fair assessment of the current situation to me.
A couple of months ago I posted an anecdotal of my pet favorite street in Brier Creek, which had 6 houses for sale. Now its got 7. Whilst one house has had its price reduced 4 times, another seller is still trying to get 710K for a 3 bed, 3200 sq. foot house!
Talking to a Maryland based realtor at the weekend made me wonder about something. She offered me one example of a couple in Poolesville who's 3000 sq. foot house is on the market for 639K. On the market for 750K last year! Owners moving to North Carolina of course!
If prices continue to tank in many areas, then maybe the triangle would appear less of a bargain place to live. You think that this may put off many transplants?
Last edited by Big M; 10-22-2007 at 09:18 PM..
Reason: Forgot some information.
The production builders ARE lowering their prices, on inventory homes. This is somewhat normal for this time of year. When you see the big names like KB and Beazer and Pulte saying they are dropping prices $30,000 and $40,000, I'm concerned that they have inflated these prices before dropping them so make sure you have your Realtor check those comps. I believe that these production builders overbuilt in this area expecting more people from Florida, Calif. and up north. Now, they have a huge amount of inventory homes that they need to get off their books before the end of the year.
As the article says, housing prices have not dropped. I'm not seeing too many of the custom builders dropping their prices at all.
Showings ARE down. I can tell that just from my listings. It IS taking longer to sell because we have less buyers. Again, somewhat typical for this time of year. Again, those folks that were moving in so quickly in spring and summer wanted to be here for the beginning of the school year. Less buyers this time of year. Will this cause some sellers to lower their prices? Yes. Supply pushes prices down. Demand pushes prices up. Basic economics.
What would I do if I were a buyer today? I'd be very careful as to WHERE I'd buy. In this type of market, its all about LOCATION LOCATION LOCATION. I'd be careful buying in a new neighborhood without researching to see what has sold and for what price. North Raleigh and Cary are still the most expensive areas but appreciation is always good in these areas. Again, supply and demand.
I sold homes in the early '90s when our housing market was slow. Interest rates were around 12% to 14% and yes, people still bought houses. They just bought less house due to the rate being higher. Our rate is still very low. First time homebuyer's rate was at 5.75% last week. Current interest rates are around 6.25%. People will buy. Just make educated decisions.
The production builders ARE lowering their prices, on inventory homes. This is somewhat normal for this time of year. When you see the big names like KB and Beazer and Pulte saying they are dropping prices $30,000 and $40,000, I'm concerned that they have inflated these prices before dropping them so make sure you have your Realtor check those comps. I believe that these production builders overbuilt in this area expecting more people from Florida, Calif. and up north. Now, they have a huge amount of inventory homes that they need to get off their books before the end of the year.
As the article says, housing prices have not dropped. I'm not seeing too many of the custom builders dropping their prices at all.
Showings ARE down. I can tell that just from my listings. It IS taking longer to sell because we have less buyers. Again, somewhat typical for this time of year. Again, those folks that were moving in so quickly in spring and summer wanted to be here for the beginning of the school year. Less buyers this time of year. Will this cause some sellers to lower their prices? Yes. Supply pushes prices down. Demand pushes prices up. Basic economics.
What would I do if I were a buyer today? I'd be very careful as to WHERE I'd buy. In this type of market, its all about LOCATION LOCATION LOCATION. I'd be careful buying in a new neighborhood without researching to see what has sold and for what price. North Raleigh and Cary are still the most expensive areas but appreciation is always good in these areas. Again, supply and demand.
I sold homes in the early '90s when our housing market was slow. Interest rates were around 12% to 14% and yes, people still bought houses. They just bought less house due to the rate being higher. Our rate is still very low. First time homebuyer's rate was at 5.75% last week. Current interest rates are around 6.25%. People will buy. Just make educated decisions.
Vicki
I would say the one thing going for the area is people wanting to relocate here. So people have to live IN SOMETHING! a house works. That said water issues the real nasty heat wave traffic issues school issues and lack of mass transit has many that I have spoken to starting to rethink the area. Heck after looking at my tax bills and state income tax I am rethinking my decision to move here. Its not such a great bargan.
I would say the one thing going for the area is people wanting to relocate here. So people have to live IN SOMETHING! a house works. That said water issues the real nasty heat wave traffic issues school issues and lack of mass transit has many that I have spoken to starting to rethink the area. Heck after looking at my tax bills and state income tax I am rethinking my decision to move here. Its not such a great bargan.
Don't forget about food prices and Personal Property Tax's.
I agree that while fall going into winter are down months almost everywhere to sell, I think it has begun to slow down here and we won't see as many houses moving next spring/summer. I live in a desirable neighborhood in Northwest Raleigh off of Leesville rd. where the housing prices in my Neighborhood range from $200-$250 or so and only one house is listed with Wake county as closing this summer and that was in May (so not even summer), another house just closed a few weeks ago, but there are still like 8 or so houses on the market that have been on the market since spring. I've checked the comps and at least 6 of them seemed to be priced right. So I really think something is going on here. In the summer of 2006, we had 8 closings and this summer we had NONE, with about 8 houses being on the market since Spring.
Again, this is just my neighborhood, but it seems to be slowing here and I'm suprised with the great location and relatively inexpensive houses. Prices are not dropping which is good, but it seems like it's A LOT harder to sell this year compared to last year.
It could be a lot worse, so I'm not freaked out or anything, we're just experiencing in a very small way, what most of the country has been hit hard by. Like I've said before, my 1200 s.f. "older" townhouse in NoVA that I sold last year has already been foreclosed on and the bank is asking $100k less then what I got for it last year and it's been on the market for 4 months with no bites so far. In 2000 my old townhouse was only appraised for $101,000
It's all relative. There are just as many buyers for those empty homes as there were last year maybe even more. However, the credit market tightened and lenders are actually asking for proof of income. Can you believe that! So some of the potential buyers for the available homes have been taken out of the market until they can, you may want to sit down for this one, have a down payment of at least 10% for the home they would like to purchase. Its old fashion economics, have a reasonable down payment, have a steady income, have relatively low personal debt and guess what, you can qualify for a mortgage and buy the house you want. With that philosophy it only makes sense that home sales will be down until people learn again what they already knew, what their parents and their parents parents had done.
Homes sales will come back, it may take several years to start appreciating again but no one really knows the answer to that one.
The old adage is so true in this housing market, you can't have something for nothing.
As far as the lenders go, "the smoke finally fogged up the mirror's they were using", to qualify people for home loans.
Remember, the price of homes and taxes are still cheaper than in the northern states. I'm meeting tons of people that have just moved from up north. If the price of homes do drop, we will still have a normal market. Also, home production should slow down because there is too much inventory.
What does the economic principle of supply and demand state? The greater the supply of any commodity in comparison with demand for that commodity, the lower the value(high supply, low demand=lower value). The smaller the supply and the greater the demand, the higher the value(low supply,high demand=higher value). Factors influencing the demand and supply of real estate also affect property values.
I would say the one thing going for the area is people wanting to relocate here. So people have to live IN SOMETHING! a house works. That said water issues the real nasty heat wave traffic issues school issues and lack of mass transit has many that I have spoken to starting to rethink the area. Heck after looking at my tax bills and state income tax I am rethinking my decision to move here. Its not such a great bargan.
A "bargain"? Well, I never thought THAT! Ask my clients coming in from Georgia if they think its such a bargain to buy here! The only folks that really consider our low housing costs a bargain are the people coming in from the overinflated markets such as Florida and California and New Jersey.
I spoke with some people from DC over the weekend. NOT very happy people. I'd be happy if they STAYED in DC!!! Again, Wake County is not for everyone!
If prices continue to tank in many areas, then maybe the triangle would appear less of a bargain place to live. You think that this may put off many transplants?
I personally think that if prices get out of control in NC then the transplants will stop coming. The #1 reason why transplants are moving there is for affordable homes. Their dream to own a brand new single family home in NC is more realistic than up north. Why move away from their families to someplace that the cost of living is just as exspensive? Jobs are not the reason people are leaving the north, there are definitely a lot of jobs in and around the cities...they are leaving because townhomes are starting out in the low 300K, so you can imagine what a single family home that is 30 years old would start out in. That doesn't include the high property taxes which the poor citizens in NJ and paying 5000 and up a year are 5K is low balling it. NJ is paying for the influx of New Yorkers that wanted to escape the city. With more people comes the need for more schools, highways, public system...you want to see the future of Raleigh? Look at nothern NJ or central NJ, taxpayers are going to have to carry the burden, plus if the politicians do not start doing something about the illegal immigrants(who are not paying taxes and flooding our public facilities) the tax burden is going to be that much larger. I did read somewhere though that NC was one of the leading states beginning to crack down on illegal immigration. Good luck to everyone who is trying to decide what to do. I am coming down Thursday,we almost moved down there I highly doubt it now. But we are entertaining the thought for my in laws because they want to check out the area. Just keep your fingers crossed that my husband gets the job he is going after up here in Maryland!
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