Last week the Wall Street Journal economist reported that the bottom has been reached in the metropolitan cities and they predict a return to begin immediately in those cities. They also stated that other areas are expected to follow soon. The lowering of interest rates into the 5% range has helped give every area a spark.
I spoke to a top agent in Las Vegas, an area that was hit first and hit hard and she said from January until July she only had 4 sales. In August she had 8 sales and she reports the phones are ringing off the hook. Sounds like the economist nailed this one.
Other rural areas around the county are reporting that prices have fallen to where they were 5 to 10 years ago and they believe it will be next year before they hit their bottom and begin to see a return in their market.
In Raleigh, our real estate market continues to be one of the strongest in the nation. Our prices have fallen mainly by the amount of appreciation sellers hoped to receive. Most sellers price their homes by taking past sales and adding 8% to 10% appreciation. What we are experiencing is the homes that have closed have sold without “hopeful appreciation” added to them.
Many people have a false sense of our Raleigh reality because they see a lot of homes failing to sell or many sellers making numerous price reductions. This is only because the seller didn’t price their home in today’s market. They used old school thinking of adding appreciation to last years prices. This formula doesn’t work in a down market. I am rarely seeing sales price below their original investment. When I do see this it is because they purchased their home at the end of the peak or in the past 18 months. Most closed prices are equal to where homes were selling in 2006. According to our local TARR Report the closed sales in Raleigh have a 2% gain. People who purchased in 2006, 2007 and 2008 in Raleigh will see strong appreciation in the next couple of years. When the National real estate market returns to their full speed it will be light speed in the Raleigh real estate market. We have so many buyers sitting on the fence waiting for a sign. Don’t wait to long or you will miss the best buying season in history.
The News Media reports on the National Real Estate Market. You can’t judge what the temperature is in Raleigh by watching the weather report in Florida. In Raleigh, you need to buy now. We have a great market. Here are facts from (MLS) Multiple Listing Service.
Raleigh Homes For Sale ….4,473
Raleigh Homes Closed – Year to Date …. 5,181
Raleigh Pending Sales …967
Raleigh Absorption Rate …4.6 Months (A normal market is 4 to 6 months inventory)
If you have questions, or would like to see a copy of the Triangle’ s T.A.R.R. Report, feel free to call me at 919-235-0007.
I hope that you will enjoy this great weather we are having this weekend. My team and I will be at the Caniac Carnival today with the other 20,000 fans celebrating the 2008-09 Carolina Hurricanes Season Opening Week. This event is held at the RBC Center in Raleigh and runs from 10 am to 2 pm. Our team will be there with a large inflatable slide and a drawing for a 5 day cruise for two. At 3 pm the Carolina Hurricanes will offer a scrimmage game that is free to the public. I hope you will come by to join us.