"time to buy" questions about the Raleigh/Durham area (Cary: for sale, HOA)

[VickiR]

I remember when hubby and I bought our first home. We both had great jobs but saving that 3.5% was hard for us. Luckily my parents were willing to "gift" it to us.

So, even though I have alot of first time homebuyers that have saved more than the 3.5%, I still think having great jobs and great credit counts for alot more than having saved 20%. Today's homes are much more pricey than my first home and even back then, saving 20% would have been too much for us to have asked my parents for.

Having a great job and great credit should count for something.

Vicki

[VickiR]

Originally Posted by Grawburg

Home ownership is overrated anyway....and I don't mean that as a joke either. Rent as long as you can.

I know you think that as a Realtor, I have an "ulterior motive" in getting people to buy a home but push that aside for a moment...

WHY do you think having your own home is over rated? WHY do you think that so little of the population agrees with you?

I've owned my own home since I was 19 years old. The last time I rented was 19 years ago while we were building the home we currently live in. I HATED it.

Paying rent is just paying SOMEONE ELSE'S mortgage. Why not pay your own?

I'm sorry but I just don't get why anyone would prefer to rent instead of own?

By the way, I don't rent (lease) my car either.

Vicki

[rnc2mbfl]

Originally Posted by KCfromNC

The market has slowed tremendously over the last few years as buyers and sellers get further away from each other on what a reasonable price is. There's no real sign that's changing, and when it does, history says it will be the sellers that give in. There's small signs that this is starting to happen at the edges, as we've gone from our historical inflation + 0.5% increases (i.e. 3% a year or so) to drops of 3-5% over the past year on average. The most likely trend over the next several years is for that trend to continue as we try to clear out the huge amount of inventory sitting stagnant on the market.

Sure, this market could be immune from normal supply and demand economics, but I wouldn't bet on it.

KC, with all due respect, your posts about real estate over the last few years have consistently suggested that we would be going through a crash in the local real estate market. And, looking at the last few years, it's been more like a pause and/or very modest decline in the market. Of course, this has played out differently in different submarkets locally. Some have been hit harder and some have not really been affected at all. But, that's because of the whole "location, location, location" dynamic. Personally, I don't think that the decline in the local market has had to do with the local economy. I think it's more about a national crisis in other markets and the credit crisis. Still, any declines have been modest and many experts are saying that Raleigh will be among the earliest areas to "recover".
The reality is that the Raleigh market didn't get out of hand like ones in Florida, California, Arizona, Nevada, etc. While Raleigh has enjoyed the spoils of good economic growth, it didn't participate in year over year double digit housing price increases. It grew modestly compared to the explosive growth and the "sometimes" deep pockets of the newly arrived.
If I were giving advice to those looking to buy in this market, I would definitely agree with the position that neither this nor any market is a good short term investment right now (2-3 years) in terms of return on investment after RE commissions, closing costs, etc. But, if someone is looking for a long term investment and/or home for themselves, I don't see why anyone wouldn't buy now in this area. I have bought 3 homes in Raleigh in the last 21 years. All three, including the one I closed on in 2005, have been good investments. My previous purchases appreciated nicely over time and gave me ability to move up to the home I now enjoy. And, even in this "down" market, my latest purchase is still above water in terms of what I paid for it.
If I hadn't purchased my $57,000 condo in my mid 20's, I never would have the home I have now. My appreciation became my vehicle for "saving" the downpayment for my next purchase 9 years later. And, on an approximately 33K salary (at the time) it would have been impossible for me to save what I gained in value during those first 9 years of home ownership.
I think the key for homebuyers is to be smart about what they can afford and view real estate as part of longer term wealth building strategy. If your life consists of moving every few years, I'd never recommend buying a home unless you are so wealthy that it doesn't matter if you lose a few bucks. But, if you are intent on staying put and growing some roots in your location, I think buying now in the Raleigh market will prove to be a very smart move when looking back on it ten years from now. But, I would use this pause as an opportunity to get the very best location you can for the price you can afford to pay. If you are unfamiliar with the area, get a good buyer's real estate agent and listen to their advice in terms of location. Find one that can show you data on past performance of local submarkets and current influencers for future appreciation (schools, safety, amenities, parks, etc.). And, find a person who is seasoned in understanding the market anecdotally. In the end, there is both an art and science to making your best decision.

[CMcGoff]

I think it turns out that we just don't know where we want to buy.

[KCfromNC]

Originally Posted by rnc2mbfl

KC, with all due respect, your posts about real estate over the last few years have consistently suggested that we would be going through a crash in the local real estate market.

Most of what I've been posting is information from the Triangle MLS and various other industry groups. I've gone out on a limb and said that sales numbers lower than the last recession combined with record levels of inventory sitting on the market will shift things to the side of the buyer, but that's hardly tinfoil hat kookiness.

But in any case, none of what you've posted is a reason for the original poster to be worried that house prices are going to jump up in the next year. At best, it's an argument for taking a gamble that prices aren't going to drop enough in the short term to turn a long-term investment into a losing deal.

And to the OP - don't be confused by the "houses are selling near list price" argument. Without knowing how those list prices compare to list prices in years past it doesn't tell you anything about the direction of prices. All it says is that houses priced reasonably are selling. How do you know what a reasonable price is? When a house sells fairly quickly. That's true in any market - up, down or flat - on it's own it gives no information about the health of the market overall.

Edit - just saw your last post. Take your time and use the next few years to figure out where you want to settle down. Now's not a time to buy a house thinking that if you don't like it, you'll just move in a year or two and be OK. If you look at enough houses, you'll get a feel for what's a value and what isn't. No need to rush.

[Charlton Dude]

Originally Posted by rnc2mbfl

KC, with all due respect, your posts about real estate over the last few years have consistently suggested that we would be going through a crash in the local real estate market. And, looking at the last few years, it's been more like a pause and/or very modest decline in the market. Of course, this has played out differently in different submarkets locally. Some have been hit harder and some have not really been affected at all. But, that's because of the whole "location, location, location" dynamic. Personally, I don't think that the decline in the local market has had to do with the local economy. I think it's more about a national crisis in other markets and the credit crisis. Still, any declines have been modest and many experts are saying that Raleigh will be among the earliest areas to "recover".
The reality is that the Raleigh market didn't get out of hand like ones in Florida, California, Arizona, Nevada, etc. While Raleigh has enjoyed the spoils of good economic growth, it didn't participate in year over year double digit housing price increases. It grew modestly compared to the explosive growth and the "sometimes" deep pockets of the newly arrived.
If I were giving advice to those looking to buy in this market, I would definitely agree with the position that neither this nor any market is a good short term investment right now (2-3 years) in terms of return on investment after RE commissions, closing costs, etc. But, if someone is looking for a long term investment and/or home for themselves, I don't see why anyone wouldn't buy now in this area. I have bought 3 homes in Raleigh in the last 21 years. All three, including the one I closed on in 2005, have been good investments. My previous purchases appreciated nicely over time and gave me ability to move up to the home I now enjoy. And, even in this "down" market, my latest purchase is still above water in terms of what I paid for it.
If I hadn't purchased my $57,000 condo in my mid 20's, I never would have the home I have now. My appreciation became my vehicle for "saving" the downpayment for my next purchase 9 years later. And, on an approximately 33K salary (at the time) it would have been impossible for me to save what I gained in value during those first 9 years of home ownership.
I think the key for homebuyers is to be smart about what they can afford and view real estate as part of longer term wealth building strategy. If your life consists of moving every few years, I'd never recommend buying a home unless you are so wealthy that it doesn't matter if you lose a few bucks. But, if you are intent on staying put and growing some roots in your location, I think buying now in the Raleigh market will prove to be a very smart move when looking back on it ten years from now. But, I would use this pause as an opportunity to get the very best location you can for the price you can afford to pay. If you are unfamiliar with the area, get a good buyer's real estate agent and listen to their advice in terms of location. Find one that can show you data on past performance of local submarkets and current influencers for future appreciation (schools, safety, amenities, parks, etc.). And, find a person who is seasoned in understanding the market anecdotally. In the end, there is both an art and science to making your best decision.

rnc2mbfl, you are so right. No matter how badly anyone may want to spin the numbers to make it seems like we were going to have some massive overall crash of 25 to 50 percent in homes values, reality was not going to allow for it. I am sure there are multiple reasons why someone would want to make the local housing market out to be far worse than it is, but anyone who is unbiased could easily see that we would be fairly stable here. Now people can have the best of both worlds......fair pricing and great interest rates. It's a no brainer for people that are "ready" to buy. Don't let anyone tell you otherwise. Now that the experts are all pretty much agreeing that the econmy and real estate market have bottomed out in "most" areas, it is great to see just how incredibly wrong & off base some people were.

[CMcGoff]

We are from NY state like a ton of people, and we have started to see that areas around the Raleigh-Durham area are very similar to the NYC area in terms of "hot" areas and reasonable ones. We see very similar stuff happening in certain parts that remid us of what happened in Brooklyn- a bit of gentrification whether it be downtown areas like Durham or just displacing animals from forests. We moved from the NYC area because we couldn't affod a sufficient home for our family since it was just insane an unafordable for anyone but people from out of state, even around areas far from the heart of NYC. Our income from a NYC salary (husband works remotely from home) is floating us nicely here, but we are still finding our savings are not good enough to afford the right house in the perfect area. ( we lost 25K on our last purchase and didn't make a cent from our sale- a co-op around NYC) so we feel like while there is great variety here in this NC area, our dollar is still not so hot. I think waiting until we really like an area, which we still feel hasn't happened, would be the right move. We do like a few parts, but with a lease from renting, it is a weird time pressure.

It is interesting that the market here can be watched closely and how it is definitely the place to be, which makes us uncomfortable since we came from another "place to be" that we couldn't be. I guess the same thing happens here. I think having a child also limits us, but I am starting to realize I can't let that be the hardest part.

[newenglandgirl]

Hi, I am new to this thread and thinking of moving from NE very soon because it is so costly for retirees in my state. I have a son in Cary (he works in Chapel Hill) and he is suggesting I move down that way but I've only visited twice and don't know the "safe" (in terms of actual safety and also in terms of investment) in the Cary area. Looks like there are some ranch style homes, maybe 1200 sq feet or less, that are selling for under 200K. Does anyone have any advice about which areas of Cary are better, which to avoid? And what about SW Raleigh? Out of my price range? I worry about being in the city when I'm retired in terms of safety and also getting around by car or other transp. I did not like the main highway between Chapel Hill & Cary! any advice would be appreciated.

Thanks,
~NewEnglandGirl

[CMcGoff]

you probably want to start a new thread on this, honestly. This one went off track...most parts of Cary are perfectly fine though. Maybe 99%!

[purdypearls]

save save save. You'll have more money to put down and a lower mortgage. I can't imagine a skyrocket like the boom in the past few years. Figure out what the monthly mortgage and utilities will be. Then save money so you can get a mortgage that suits your needs. Rent cheap until you can manage it. It will give you time to find the right place to buy.