State of the Housing Market in the Triangle

Hi everyone!  I thought I’d touch base and talk a little bit about the housing market in the Raleigh NC area.  We are experiencing a hot market here, and also a housing shortage.  Anyone who lived through the crash as a realtor or builder, predicted this situation, because so many builders went out of business and because so many “cheap” homes were bought as either rentals or primary residences as the market righted itself.  NOW, however, we are experiencing the slinky effect.  There simply are not enough houses to satisfy demand here.

We lost a lot of builders and developers in the crash, and I assume many never came back, although many did.  I see many of the same names pounding out spec homes and custom builds, but they can’t keep up with demand. Interest rates have been at historic lows, fueling the feeding frenzy, and now, there are not enough existing homes either.  Baby Boomers are asking for one-level living, and requests for senior living communities are raging.  This situation could also have been predicted, although you wouldn’t think so by the scramble to supply this need.

I drove around some of the older communities and knocked on doors, encouraging people who owned older ranch-style homes to list with me, because not only could I sell their house in the blink of an eye, but also,they could buy a home at a very low interest rate.  Problem is, now there AREN’T any homes for them to move to if they do sell their ranch style home if they want to be under 200 thousand.

So we’re in a bit of a pickle.  Trying to find a home under 200 thousand that’s within a reasonable commute distance is next to impossible, although there are some town homes coming on line under 160 thousand that will not force a huge commute to work. Problem is: Townhouse are two story. Baby boomers want one story.

So.  We talk money.  Because of the supply/demand discord, prices are jumping.  It’s easy for me to list at the top of the price range indicated by a market analysis, and often get at or above list price offers!  This is great for sellers, and kind of a balancing of the universe; because these folks took a beating in the crash.  Senior communities are popping up all around, just getting off the ground really, but they are priced so high that many of my clients who might want that kind of home laugh and go another direction.  People moving to a fixed income  lifestyle often can’t easily afford a starting price in the 400’s.  I do hear that DR Horton is starting an over 55 community in this area priced under 200.  Now we’re talking.

So it’s as hot, crazy market.  If you are thinking of selling, call me.  We should start by talking about what you want to go TO, and makes sure we can find it for you.  Because if we list your home, chances are it’ll fly off the market faster than you may want it to!  But it’ll fly at a higher price than you might think too!


Statistics on Home Sales

Articles on home sales fill the internet lately, and most people cite those statistics without doing a deeper dive, or having the background information to interpret the data.  But it is imperative that you know where the numbers come from that influence your decisions related to buying a home, or selling your existing home, or both.  And it is important that you understand your market well enough to truly understand what the data is telling you, or whether it even applies.

I just read a article that said existing home sales are down 2.6%.  For many, that would be the end of the story.  But in my market, if existing home sales are down at all, it is definitely not due to the economy; it is because there is a shortage of listings.  In other words, MANY realtors have clients standing in line to buy existing homes, but there just aren’t any available to buy in their price point.  IMPORTANT: If you are thinking of selling YOUR existing home, this is GREAT news for you!  Supply is low and demand is VERY high.  This means many thousands more dollars in your pocket!  So in this case a 2.6% drop is not bad news. In fact, it’s a reason to celebrate.  And that is in the Raleigh/Triangle market, not in Chattanooga.

Something else to consider is seasonal effect on data.  Most folks don’t want to have their home on the market for sale during November and December, because of the holidays.  And during summer vacation time, it’s not unusual to see a slow down in buying activity.  It doesn’t predict gloom and doom for the market; rather, data predict typical human habits and traditions.  I always have homes closing over both Thanksgiving and Christmas, so some folks clearly take advantage of the lower supply of homes and they list, or they take advantage of the holiday slowdown to take advantage of buying at potentially a lower price.  See how this works?  Make the data work in your favor by understanding it.

The other thing you need to dig out of these articles is the source of the data.  I just looked at a chart showing lowest time on the market for existing homes.  I know our time on the market here is much lower, on average, than what the chart showed.  So I found the small print and saw that the data came from San Francisco CA, Billings MT, Chattanooga TN.  This data had NOTHING to do with our local market.  So be sure you know where these “stats” come from.  In fact, in some neighborhoods, I can almost predict when a home will go under contract, based on that community’s time on the market.  In the last case I examined, time on the market was about 40 days, lower than that chart indicated from these other areas.

The bottom line is this, and you’ve heard it a thousand times: Real estate is local.  Now that sounds a bit ridiculous, right?  But the saying is packed with truth.  What happens in San Francisco has nothing to do with us, here in the Raleigh/Triangle market.  Each day we have 60+ people moving here, needing homes.  EACH DAY.  So our market is always healthy, or healthier, than markets anywhere else in the US.  This means if the economy crashes, we will slow down, but not as much as most other markets in the whole country.  So don’t be afraid to buy, and I will beg:  Please list your existing home.  I can sell it!  I probably have a buyer waiting.