Over the last several months many people have asked me if home sales have been picking up for the Raleigh real estate market. While we have seen an increase in appointments scheduled to view our current inventory of Triangle area homes for sale, we have not seen them turn into equal sales. Home sales around the Raleigh region are still very sluggish and the luxury market has been hit the hardest.
The Biggest Real Estate Problem We Have in the Raleigh Region
is that we are not seeing many move up buyers. This is causing many sellers to compete for a sold sign and has driven home prices down. The listing inventory of homes for sale is still high and many sellers have reduced their home prices several times and still are not sold. The average home list price to sales price is 96% if sold in the first 30 days and 89% if price reductions occur. With declining home values, low interest rates and tax credits you would think real estate here in the Greater Raleigh area would be booming but, it isn’t. Everyone is busy showing a lot of houses but, the truth is Triangle real estate home sales are still lower in 2009 than they were in 2008.
Let’s Look At Some Contributing Housing Market Factors
1. First Time Home Buyer and Tax Credit
Raleigh area homes under $300,000 have been driving the market as our first time home buyers are out looking for their dream home and an $8,000 free gift from the government. The $8,000 first time home buyer tax credit is due to expire in 102 days. Many people who have been unsure about the economy and their jobs have decided to wait until the last minute to find a house. Not a good idea. Every first time buyer needs to get busy now. Procrastination can cause you to loose your chance at $8,000 and pay more for a house. On July 31, 2009, new mortgage regulations went into effect that can extend a real estate closing to approximately 45 days. This means in order for someone to use the credit they have to hire a REALTOR, find a house they want to own, negotiate an acceptable contract and apply for a loan by October 15 in order to be assured a closing before December 1st. I believe this fall we may see Raleigh real estate priced below $300,000 spike up in value as those that waited to the last minute are now in bidding wars over the best houses left in the market.
2. Life Change
People in all walks of life have to have some place to call home. Some of our Raleigh market activity comes from every day situations where people moving are merging households, downsizing, having kids and running out of room, relocating due to a job transfer, divorce, death or need a change due to health reasons. This type of activity always happens in our Raleigh Real Estate Marketplace and will never change regardless of market conditions.
3. Short Sales and Foreclosures in the Greater Raleigh Areas
Today’s investor loves our Raleigh real estate market. They know now is the time to see the highest returns on a home purchase. Raleigh is ranked in the top 10 cities to rebound fastest. Homes in the Raleigh, Cary, Apex, Holly Springs and Wake Forest real estate markets have about 20% distressed properties and cash is king. People who have patience, good credit, or cash in the bank are another segment in our Raleigh real estate market. If you want to invest in these type of properties look for an REALTOR with a CDPE designation. It is not a traditonal transaction and you will need someone with experience to guide you.
4. Supply and Demand
Standing inventory is a real problem in the Greater Raleigh area. The absorption rate is 10 months to 39 months in some price ranges and locations. In my recent blog posting “Home Sellers Need Tough Love in this Economy” I talk about how some Triangle Home Sellers are experimenting with the market. As I said before, if you don’t need to sell your home right now, don’t list it. Yes, I am a Top Producing Real Estate Agent in the Triangle area, however, I believe in helping people and not just closing a transaction. Our real estate market is still over saturated with homes that are not selling. It is a fabulous time to buy a home and one will find many great deals out there, but if you don’t have to sell, please wait.
If you have questions about the real estate market here in Raleigh or would like to receive new listing alerts, please don’t hesitate to contact us. We are here to help you make wise decisions about your home.