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Raleigh, Durham, Chapel Hill, Cary The Triangle Area
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Thread summary:

Triangle area real estate market shows home prices climbing; opinions on 3 month data market analysis, real estate Raleigh, Cary, Durham area

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Old 02-15-2008, 11:05 AM
 
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Latest news from the National Association of Realtors: NC is looking steady. Check out the chart attached to this article--it illustrates Durham specifically:

http://www.nytimes.com/2008/02/15/bu...l?ref=business

If you go to NAR's website, their data show that Raleigh/Cary prices in the 4th quarter were up 4.0% from a year ago, and Durham prices were up 5.6%.

Given all the discussion of foreclosure rates in another thread, does this mean that our area is seeing two contradictory things? A small batch of people really struggling (for whatever reasons) yet the local market remaining relatively strong?
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Old 02-15-2008, 11:10 AM
 
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I think the overall market has not yet affected the NC area yet. But in the next 2-3 months we are going to see a domino effect in NC markets and people making haste in buying might suffer huge losses.
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Old 02-15-2008, 02:11 PM
 
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The price data from the Triangle MLS shows different results. Average sales price in Wake County was up 1.9% from Q4'06 (260K vs 255K), and Durham was up 2.3% (202K vs 197K). After counting inflation, both of these are negative.

Price data is pretty noisy, so a three month snapshot doesn't say much.
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Old 02-15-2008, 02:25 PM
 
Location: South Beach and DT Raleigh
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Oh God...here we go again. I am going inside, the sky is falling.
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Old 02-15-2008, 10:01 PM
 
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Quote:
Originally Posted by rnc2mbfl View Post
Oh God...here we go again. I am going inside, the sky is falling.

LOL............I know what you mean!

Isn't it funny how bad news can be made out of anything positive. This area is still appreciating, when others are falling, but let's not look at it that way. How can we look at it as a loss?
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Old 02-15-2008, 10:18 PM
 
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I don't really know as much about the market there in the Triangle as I should for someone moving there in just a few weeks. But, increases in average sold price doesn't have to be a positive.

By way of example, the Seattle market went up in average price. However, the increase was due to a decrease in the number of sold homes in the lower and middle price ranges. So, while the total number of sold houses was down, the average price went up.

That may not be the case there at all. Just an example of how data can mean different things.
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Old 02-16-2008, 04:11 AM
 
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If tech starts to lay off and the yuppies turn tail and run, there will be a bloodbath.
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Old 02-16-2008, 04:44 AM
 
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Quote:
Originally Posted by KCfromNC View Post
The price data from the Triangle MLS shows different results. Average sales price in Wake County was up 1.9% from Q4'06 (260K vs 255K), and Durham was up 2.3% (202K vs 197K). After counting inflation, both of these are negative.

Price data is pretty noisy, so a three month snapshot doesn't say much.

You are not taking into account one very important thing. When real estate appreciates, you get the benefit of appreciation on the VALUE of the home, not the amount you put down. For example:

You put 20% down on a $300,000 house. That's $60,000. A $60,000 investment in a 3% CD today gets you $1800 - $504 in taxes to be paid for income, nets you $1296. You then can deduct the inflation number you want to use.

Now, take that same $60,000 and use it as a 20% down payment on a $300,000 house and the house goes up a CONSERVATIVE 2.3%, that nets you $6900. Based on your actual outlay of money, that is an 11.5% rate of return on $60,000. This number is net, as it is TAX FREE. You pay no taxes on real estate profit up to $500,000, as long as you lived in the home for 2 years.

$6900 - $1296 = $5604 in additional profit over a traditional investment. That means you end up with an investment that is 4.32 times better that a bank CD.

As I have shown in previous posts, you can own a home for the same as or less than renting the comparable unit, INCLUDING all associated expenses.

There is no doubt that overall, owning real estate is the best way to build wealth. A down market is simply a buying opportunity.
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Old 02-16-2008, 09:51 AM
 
Location: Wake Forest, NC
1,032 posts, read 2,932,269 times
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I've been searching zillow.com.

I don't know how reliable it is, but it seems to indicated home values are slipping in Wake County..... enough to have me worried...

Would any realtors out there please comment???
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Old 02-16-2008, 10:00 AM
 
354 posts, read 1,041,810 times
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Quote:
Originally Posted by SP2SCV View Post
You are not taking into account one very important thing. When real estate appreciates, you get the benefit of appreciation on the VALUE of the home, not the amount you put down. For example:

You put 20% down on a $300,000 house. That's $60,000. A $60,000 investment in a 3% CD today gets you $1800 - $504 in taxes to be paid for income, nets you $1296. You then can deduct the inflation number you want to use.

Now, take that same $60,000 and use it as a 20% down payment on a $300,000 house and the house goes up a CONSERVATIVE 2.3%, that nets you $6900. Based on your actual outlay of money, that is an 11.5% rate of return on $60,000. This number is net, as it is TAX FREE. You pay no taxes on real estate profit up to $500,000, as long as you lived in the home for 2 years.

$6900 - $1296 = $5604 in additional profit over a traditional investment. That means you end up with an investment that is 4.32 times better that a bank CD.

As I have shown in previous posts, you can own a home for the same as or less than renting the comparable unit, INCLUDING all associated expenses.

There is no doubt that overall, owning real estate is the best way to build wealth. A down market is simply a buying opportunity.
What about real estate taxes and maintenance expenses for the house? Taxes would be about $3000 for the year and you can add another $2400 for maintenance. Also when you sell your house you automatically lose 6%-the real estate commission you have to pay. It would take more than 31 months of your whole appreciation number just to break even to pay the commission. You did not take that into the equation. So you are in the hole if you want to sell your house within 10 years in your scenario.

In a appreciating market (more than 4%) and if you are in the house for at least 5 years you come out ahead comparatively but in a declining market or a in a less appreciating market your losses can be substantial due to the leverage and added costs of owning a house. If this was not true, we wouldn't be having foreclosures and people being upside down on their mortgages and equity.

Last edited by ch123; 02-16-2008 at 10:10 AM..
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