Housing starts slow to a trickle, Wake Forest (Raleigh, Durham: rentals, construction loan)

[SP2SCV]

The reason there is less new home building is because home builders want to be cautious with the RE market. They do not want to sit on inventory, as then they would have to drop prices as an incentive. By only building when purchased, the builders ensure themselves a nice profit. This also means that new home prices will go UP, as there will be no more inventoried deals. This is great for me, as I bought mine discounted.

Slowing building down RAISES prices. It is simple supply & demand. Look at any popular area that has less building going on (Chapel Hill) and you will see high prices. Look anywhere there is a lot of land and a lot of building going on (Clayton) and you will see lower prices.

People keep talking about slowing down new construction to allow buyers to catch up and it is actually exactly the opposite.

[saturnfan]

Originally Posted by SP2SCV

The reason there is less new home building is because home builders want to be cautious with the RE market. They do not want to sit on inventory, as then they would have to drop prices as an incentive. By only building when purchased, the builders ensure themselves a nice profit. This also means that new home prices will go UP, as there will be no more inventoried deals. This is great for me, as I bought mine discounted.

Slowing building down RAISES prices. It is simple supply & demand. Look at any popular area that has less building going on (Chapel Hill) and you will see high prices. Look anywhere there is a lot of land and a lot of building going on (Clayton) and you will see lower prices.

People keep talking about slowing down new construction to allow buyers to catch up and it is actually exactly the opposite.

Yes, unless migration to the area slows as prices rise.

[TarHeeler]

Originally Posted by mayhurst

It would nice to be judged as a person, rather than assuming that everyone moving into the Triangle has nothing to contribute to life there. We are looking at the area because we feel it reflects the values we hold. Your post, however, runs counter to what I thought people were like there.

It's unfortunate if you're offended by such comments... but the reality is that not everyone in the Trangle is overjoyed with all of the recent growth. I can't completely disagree with those who feel that way because they do have some very valid reasons for their resentment (those reasons have been stated time and time again in this forum). There are many natives and longtime residents of the Triangle who will sincerely welcome a newcomer with open arms... but there are also those who won't exactly be rolling out the welcome mat.

Right or wrong, it's just something that does exist here to some extent and something to be aware of.

[saturnfan]

Originally Posted by TarHeeler

It's unfortunate if you're offended by such comments... but the reality is that not everyone in the Trangle is overjoyed with all of the recent growth. I can't completely disagree with those who feel that way because they do have some very valid reasons for their resentment (those reasons have been stated time and time again in this forum). There are many natives and longtime residents of the Triangle who will sincerely welcome a newcomer with open arms... but there are also those who won't exactly be rolling out the welcome mat.

Right or wrong, it's just something that does exist here to some extent and something to be aware of.

Well stated.

[wanderintonc]

Originally Posted by mayhurst

It would nice to be judged as a person, rather than assuming that everyone moving into the Triangle has nothing to contribute to life there. We are looking at the area because we feel it reflects the values we hold. Your post, however, runs counter to what I thought people were like there.

Don't worry, mayhurst, I'm looking at the area too for similar reasons to yours-and the ONLY place I have found any judgement is HERE from a few select posters. Everyone I've met in Raleigh in person has been nice and welcoming!

BTW, at least one of those posters is a transplant him/herself. Pot meet kettle...

[JJingle]

I bought my first home almost 10 years ago. It was new construction by an area builder. The builder didn't hold inventory homes. A home wasn't started until a deposit was paid. As I recall, that was common practice around the Charlotte area at that time by national and regional builders. How much of this doom and gloom is related to builders going back to the basics?

I'm not that old, and I remember the days when people didn't expect to obtain a profit when selling a home that was only owned two or three years.

Relocation is a double-edged sword. The truth is Raleigh - the good and the bad - wouldn't be what it is today without growth. Sure, transplants use water and add another car to the road. But, they also bring tax dollars, spend money in stores and services, and bring a plethora of talent and personality.

[saturnfan]

Originally Posted by wanderintonc

Don't worry, mayhurst, I'm looking at the area too for similar reasons to yours-and the ONLY place I have found any judgement is HERE from a few select posters. Everyone I've met in Raleigh in person has been nice and welcoming!

BTW, at least one of those posters is a transplant him/herself. Pot meet kettle...

If you mean me, I did come here from New Orleans in 1989 as a result of a layoff and a collapsed state economy. No Money magazine, the only job offer I got was from a now defunct division of First Citizens Bank, Atlantic States Bankcard Association, and we took it to stay out of a homeless shelter.

Took a 30% cut in pay, walked away from a mortgage, filed bankruptcy. No bubble money or McMansion for us.

What a lot of us resent is the "gentrification" that may push us out to be replaced by wealthier folks coming here to get more value for their large family incomes.

The end of this influx might keep North Carolina a great place for moderate income workers to raise a family. Our son and daughter did well at WCPSS, got their post-secondary educations, and both proudly serve NC in state government,

[weluvwakeforest]

The market adjustment has been a long time coming. Those who bought at the top of the market are just going to have to sit it out for awhile, I guess.

[KCfromNC]

Here's an idea of why builders are slowing down. This post was from September and I've wanted to revisit it for a while now.

Originally Posted by urbywan

$324,700
5 Bed, 3 Bath
2,943 Sq. Ft.
0.15 Acres
1418 Old Bramble Lane
Fuquay Varina, NC 27526
Single Family Property, Area: Fuquay Varina/Willow Springs, Subdivision: Lakestone Village, County: Wake, Approximately 0.15 acre(s), ... View details.

100% Match

Photo: Fuquay Varina Single Family Home

$324,700
5 Bed, 3 Bath
2,943 Sq. Ft.
0.14 Acres
1408 Old Bramble Lane
Fuquay Varina, NC 27526
Single Family Property, Area: Fuquay Varina/Willow Springs, Subdivision: Lakestone Village, County: Wake, Approximately 0.14 acre(s), ... View details.

100% Match

Photo: Fuquay Varina Single Family Home

$324,700
5 Bed, 3 Bath
2,924 Sq. Ft.
0.21 Acres
406 Marnock Court
Fuquay Varina, NC 27526
Single Family Property, Area: Fuquay Varina/Willow Springs, Subdivision: Lakestone Village, County: Wake, Approximately 0.21 acre(s), ... View details.


All of these homes under construction by royal oaks in fuquay were listed at 354K two weeks ago, they have slashed the prices 30K! Tell me things are not weak.

So, how much did these homes sell for? That's a trick question, because the answer is that even with more price drops and 6 months of marketing, they're still sitting :

1418 Old Bramble - Current list price $289,700
1408 Old Bramble - Current list price $289,700
406 Marnok - Current list price $289,700

That's nearly a 20% drop in price in 6 months, and these are now below $100/sq ft.

Don't like these particular houses? That's OK, since there's 38 more in the same subdivision for sale. That's not an indication of a builder carefully controlling inventory to increase demand and prices for his product, despite the wishful thinking of people who purchased at the top of the bubble.

My point is that although builders are now slowing down, it's a case of reacting rather than being proactive. They figured the easy money and steady parade of transplants would go on forever, but it didn't. Now that the reduced demand horse has left the barn, they're making a big deal of closing the barn door on new construction. It's nice to imagine that builders might intentionally be limiting supply to increase demand and prices, but the data's just not there to support this idea.

Instead, they've been caught with a bunch of extra inventory that's sitting. These guys are businessmen first and foremost, so they have no emotional qualms about cutting prices to get rid of the houses sooner rather than eat a bunch of fixed costs every month. Builders are cutting margins, reducing content and doing everything else they can to drop prices to a level which will sell the house instead of letting the construction loan on an empty house bleed them to death. Some are more successful than others, but the trend is obvious.

[dansdrive]

Originally Posted by SP2SCV

The reason there is less new home building is because home builders want to be cautious with the RE market. They do not want to sit on inventory, as then they would have to drop prices as an incentive. By only building when purchased, the builders ensure themselves a nice profit. This also means that new home prices will go UP, as there will be no more inventoried deals. This is great for me, as I bought mine discounted.

Slowing building down RAISES prices. It is simple supply & demand. Look at any popular area that has less building going on (Chapel Hill) and you will see high prices. Look anywhere there is a lot of land and a lot of building going on (Clayton) and you will see lower prices.

People keep talking about slowing down new construction to allow buyers to catch up and it is actually exactly the opposite.

I would agree that no one wants to sit on inventory as the existing home inventory in certain price points is all but stagnant.

This is certainly a great time for people migrating here to get a good deal on a house. The only question they have to answer is will they be in the house long enough to out last the down turn?

I read in another thread in this forum where someone put down their earnest money and the builder is building their house and now the same/similar house is being advertised by the builder for $25k less. OUCH! That hurts right smack in the ole bank account! So IMO one needs to be cautious and aggressive when negotiating for new construction and/or an existing home. Know your market conditions and bid accordingly! This is exactly where a good Realtor or Buyers Agent comes in and there are many in here that frequent this forum!

From all the 'so called' experts this downturn appears to be still headed down and will be drawn out. Possibly 3 to 5 years!