Bo Knows the Triangle

"Where are Prices Headed in 2012?"

2012-01-18T11:12:00.000-05:00

This is the catchy headline that a real estate news blog/site, Keeping Current Matters, used in their entry today. Of course, as ANYONE who is a Realtor, or is considering buying or selling in 2012, I was curious and clicked right on through (here's a great picture they used too)!

And I was reminded about the 2 emails I received from fellow agents yesterday - not quite sure why they've put me on their marketing list - with their "January Real Estate Update!"

The catch to both of these sources is that KCM is understandably giving me national opinions....but so were the local Realtors. Their marketing letter came from their national company. Also, it's not January, or even year-end information. It's only through Novemeber.

Correct me if I'm wrong, but if you lived in the Triangle .... aren't you most interested in these questions and issues LOCALLY? And CURRENT...like this month?

Now, in 2012 I know one of my goals is to figure this whole blogging stuff out - to use pictures, charts and other whizbang material to catch your eye and interest. Maybe eblast out a "March Real Estate Update!" to my friends, family & clients.

But for now, my next blog post will have to suffice. Quick preview:

Unlike nationally, where they say the market dropped 3.5% last year, and one outfit proclaims it will drop 12% this year, here's the summary locally:

Number of homes SOLD: down 1.8%
Average Price/sqft: down 2.7%
Total Average Value Drop since Credit Crisis: 9.2%

Is it cheaper to buy or to rent?

2012-01-18T10:22:00.000-05:00

Now, here's that cute house I mentioned earlier this week.

This house is $106,900. It's in a quiet little neighborhood, you could be in Five Points/HiMount. The houses this size in the neighborhood quickly rent for $900/month.
If you owned the home as your personal residence, it wouldn't cost you $900 though. It would only be
$715 to own. Plus holding some reserve for repairs (though the roof is under 2 years old and the HVAC works great) - but it should still be LESS TO OWN THAN RENT.

And this is where we find ourselves in the "great time to buy" spectrum. We are truly finding homes that often are used as rental property being cheaper to own. There is no "pride of ownership" or "do what I want" premium.

There's only cold hard cash left in your pocket. And a 30 year loan at 4%.

I want to buy a Short Sale (or Foreclosure)!!!!

2012-01-10T21:32:00.000-05:00

Not exactly what i wanted to kick off 2012 with, in terms of a "Hey, things really ARE looking up for 2012" post, but I did meet with a new potential client last week. he had called about a really "cute" listing I have in South Raleigh - which I'll share in my next post.

But upon hearing of this home, he wanted to offer 20% less than the asking price. Pretty soon, our conversation turned to short sales and foreclosures. And he specifically wanted to concentrate on investment properties as well.

Well, we scheduled a quick meeting last Friday morning, and I got to doing some research. Here's what I found:

In the US - 1 in 20 short sales actually work before foreclosure.

This means you might put in offers on up to 20 homes before ANY of them, months later, work out.

In the Triangle – there were only 101 successful short sales below $150,000 in all of 2011.

Today, there are 130 short sales available – meaning you might expect it to take ONE YEAR to complete the purchase.

The short sales went for 96% of asking price, and an average of $108,000.

However, there were 1,462 “regular” homes in that price range sold last year. They sold for an average of $112,000 and 95% of asking price.

There were 445 foreclosures (REO or HUD) sold last year.

The foreclosures sold for an average of $99,000, which was 95% of asking price.

So, you can buy a habitable home, pre-inspect it, easily get a loan, and pay $112,000 for it.

Or, you can wait for months, and if you're successful, save $4,000 on a short sale - well, let's think of it as $19 a month.

Or, you can roll the dice that a foreclosure doesn't have big issues - unforseen issues - and get it for $99,000 and spend the $13K fixing it up. Of course, in order for this to work, you've got to actually HAVE that $13,000 to make repairs.

ForSalebyOwner.com Founder Uses Agent to Sell Home

2011-08-11T11:52:00.001-04:00

In perhaps THE example Realtors everywhere will use for decades to try and help explain why to use a full-service company - like Fonville Morisey - instead of a discount brokerage ...

ForSalebyOwner.com Founder Uses Agent to Sell Home

I am sure the website he operates makes money for him. I'm even sure some folks have been able to FSBO their home successfully, using his website. I'm also just as sure that it's amazing and unheard of that he UNDERPRICED his home by $150K. My experience is that FSBO's typically believe their home is worth MORE than Realtors and the market tell them.
What we do know is that about 87% of homes sell through the services of a Realtor. And of the 13% that don't - about half are sold between family members and friends (I saw that happen this year in Budleigh). So, about 6% of homes eventually sell via the FSBO method - but they historically take longer to sell, sell for a lower price, and require oft-contentious negotiations of repairs & "make-goods" to close because two parties who buy or sell a home 10 times combined in their life thought it was better than hiring a professional who does it every day.

Spring has Sprung and What smells like Fish?

2011-03-13T22:47:00.000-04:00

Wow, almost a month, despite one of my resolutions - to update the blog with fun and relevant info more information.

The time delay I completely "blame" on folks looking at and buying homes, lots of showings, the effects of the Tar Heels playing better basketball (optimism) while the Wolfpack sank to the bottom (lots of free time, hey let's move!). If you see anybody writing a blog 4 days a week these days, they are just bloggers, and not Realtors.

Then I see the last post I made - as I said - God Bless that Gopher! Could you ask for a better "First Day of Daylight Savings Time" than we had today?

While I was out showing house, the strangest thing happened, something I had never realized in 13 years - and 13 springs - of helping folks find homes in the Triangle. We walked out onto the deck of a home we were giving a second look at to decide whether to buy or not....and it hit me really bad. The unmistakable - and not so pleasant! - smell of the oil after you've fried fish!

But this was the middle of the day - a Sunday, in mid-March. Then the Buyers said "I think it's that tree!" I couldn't believe it, but sure enough - the Bradford Pear right there next to the deck, with its billowing white blossoms...smelled like fried fish! I pulled one off, took a deep whiff, and it was unmistakable. So, if you find yourself outside in the next two weeks, and wonder where the fish fry is...look for a Bradford Pear first, before rushing off to the local church for a Friday lunch.

By the way, 2 of the 3 homes WE went back for second looks at today also had other folks looking at them again as well. And I bet both of them are sold by Wednesday!

So, I definitely "learned something new everyday" today! I hope your weekend, and especially today were as outstanding as mine - and welcome spring and March Madness!

God Bless Punxsutawney Phil!!

2011-02-22T08:45:00.000-05:00

I'm getting pretty excited about this "spring" stuff. Despite a fairly abysmal overall record - I've heard he was less than 40% historically - looks like the groundhog got it right this year. Looking at the 7-day forecast, there's a lot of spring to be found:

only 1 day with a forecast below freezing
a "cold snap" = 55 degrees for the high on Tuesday
4 days of 60 degrees or more

and my favorite:

SUNSET IS AFTER 6 PM NOW!!!

And this also means time to get your garden & lawn ready to go for the growing season. Here's 4 important steps to take this weekend to jumpstart your lawn & plants:

1. Crabgrass preventer and lawn food. Don't wait to see crabgrass and other "broadleaf weeds" (ie, the kind we get here in the Triangle). Get ahead of the game this year with your first application of the year being a preventer and feeder. Plus, if you're going to do any seeding, you need to wait 5-6 weeks after you've used herbicide to spread new seed.

2. Fertilize those tender bloom shoots. I'm dumb enough not to have grown up knowing you can and should fertilize flowers. But all of those flowers will be healthier and last longer if you apply some plant food, easy to find in your local hardware or garden store.

3. Get your soil tested & amended.

It's time for me to do this for my yard.

Yet another benefit of living in the seat of state government is access to resources, in this case the Ag Extension office . Get ahead of the game and do it NOW, or else the wait gets really long. I've seen test kits in the hardware stores - go to a great place like Logan's and ASK about these tests.

If you're new to the Triangle, our soil usually has a TON of clay and needs lots of lime. Clay also is challenging for the way it holds water.

4. Prune overgrown shrubs. Whether you're going to sell your house or not, overgrown shrubs are a big problem. The general guideline is to keep them 16" off your house, to allow you to access the space, to limit hiding spaces for criminals, but mostly importantly ... because it's terrible for painted surfaces, especially wood for wet limbs and leaves to be in constant contact. Paint will deteriorate and peel, and either wood or hardboard siding will rot quicker than you can imagine.

While now is NOT the time to be hacking on azaleas (wait until after their blooms are spent), a good look at your shrubs now will show broken/damaged branches, dead branches, and over-leggy areas. While it may not be scientific, it seems to me that shrubs either grow flowers or limbs - if they're allowed to run loose they spend all their time getting bigger, not prettier.

Once you've done these simple steps, you can talk about tilling, and go BACK to your favorite of our many great garden stores and get some new plants.

Me? last year I planted and killed a Lorapetalum somehow, despite what i thought was a heroic amount of perma-till and other good stuff in the hole. I'll see if the fine folks at Logans' downtown have any hints to help a poor lost sould like me.

Top 5 Curb Appeal Quick Changes

2011-02-18T09:46:00.000-05:00

There's been a distinct uptick in real estate activity this year, and now I've seen the first harbinger of spring (not just this great warmer weather) ... forsythia blooms!

So, if you're thinking about selling your home, freshening your curb appeal after any long drab yucky winter is important - but can it be simple and even better - cheap? Here they are - 5 great affordable (some even free!) ways to quickly spruce up the front yard to attract buyers:

1) Prune, trim, and mulch

As leaf buds begin to show, you'll find the dead limbs that much easier. Tree limbs and tall bushes block the view of your home from the street. And over time, bushes have spread and grown, covering stairs, walks, and most importantly - blocking light from windows! For flowering bushes, consult your local garden expert, but for hardy evergreens ... I say prune away and neaten the look. For FREE. Top of all your beds with a fresh layer of mulch, which costs less than $30/cubic yard for a day full of fun.

2) Brighten or Contrast your front door

An impressive front door always makes your house stand out.

Try a bold - but not garish! - color on an existing door, or splurge for a new stained door with plenty of glass.

Painting an existing door? $30 for a gallon of good paint & a new brush. New door? Get it installed for less than $500.

3) Keep the front light and bright!

Clean, clean, and clean some more. While Buyers are waiting at the door and the Realtor® gets the key, their eyes are checking out the accumulated dirt and cobwebs that careless sellers leave behind. Make windows sparkle, sweep the walks and porches, make sure the doorbell works or get an attractive new door knocker and lockset. Make sure the front door light works and is in good condition. Cost? Anywhere from FREE to $300.

4) Paint to be Proud.Once you've pruned back the bushes, and swept out the cobwebs, you're probably going to find some peeling paint and maybe some damaged trim. Yeah, I know it hasn't bothered you before, so why bother now - since someone else will be living here? Just as they're seeing your dirt, Buyers & agents will spot rotten trim just as easily. And they assume YOU DO TOO, and choose to ignore it. So, while painting today may be the most expensive of these cheap and easy fixes - it can also make the biggest difference. Keep your trim well-painted, for about $3/foot? Or replace rotten trim - at about $8/foot?

5) Put the focus on your windows

When you go into someone's home, do you ever think "wow, this house is just TOO bright!" ??

Of course not - so play up your windows, and the light they provide. Again, pruning the bushes and washing the windows will let in SO much more light. Now, spend just a few extra dollars for some attractive shutters or even cheaper - some window boxes full of fresh spring flowers.

Like the picture shows - do a big enough window box...and they may not even notice you forgot to paint!

And, if you want the look but not the work - just give me a call and I'll gladly refer you to one my many great providers!

Where am I??

2011-01-17T17:14:00.000-05:00

One of the simple pleasures of being a Realtor is getting to see all of the Triangle, sometimes places most people don't seem to visit, and sometimes just from maybe a slightly different viewpoint.

This year, I am going to start taking more photos and sharing them - so perhaps you'll enjoy the same simple pleasure or unique perspective. But also ... to have a contest! And it's quite simple:

When I make the "Where am I??" post, whoever is the first to email me the correct answer "wins" for that picture. At the end of 2011, each winning entry will be placed in the hat, and goodies from Triangle-based retailers will be our prizes.

And so, without further ado... Where am I??

What building is this window on?

In this case - there are actually TWO correct answers. And, just to make it even easier - I'll tell you this is downtown Raleigh.

Ringing in a New Year with Year End Good News

2011-01-06T16:35:00.001-05:00

"All great change in America begins at the dinner table." Ronald Reagan

"Failure is not fatal, but failure to change might be." John Wooden

Great leaders across the spectrum of achievement have long championed the importance of change.

In 2011, I'll be doing a lot of changing - many "new" things. Well, some aren't really new, they're not even necessarily new to me.

Mostly - we've got to create the change that President Reagan spoke of. If I learned anything in 2009 and 2010 (one terrible year for folks moving, one good year for my clients) it is that consumer confidence is the leading economic indicator in the United States.

In all of 2009, we were all somewhat paralyzed by fear - what will happen to the economy? Will I lose my job? Will the house I buy drop like a rock in value?

In 2010, people began believing. Believing things would get better, believing they'd have a job. And so, they began moving again - but certainly with an eye still one taking advantage of low prices.

Fact is - locally the vast majority of homes are "back to normal".

* the top 20 neighborhoods in Wake County for appreciation were above 3.5%
* each of the 3 major Triangle counties had rising values
* In the critical market of $200,000-$400,000 ... prices are within 1% of their 2007 peak.

Now - volume is down..way down. There were the same number of homes sold in '09 and '10 in the Triangle - about 16,000 through MLS which is 1/3 off the absolute peak of 24,000 in 2007.

But it's like a "news" headline I saw the other day "Auto sales increase...but lag behind record years". Are we supposed to set records each and every year?

How do you cut an 8 page form but make it 9 pages?

2010-12-31T14:11:00.000-05:00

Well, shucks.

In all the excitement, I forgot that I said in the very beginning of December that I'd talk about how the new contract was simplifying the process, but somehow became more pages.

Indeed - our old contract, with the Alternative 2 option added, increased usage of "Time is of the Essence", and strictly defining days as calendar not "business" had grown from a 2 page, double-sided, 3 part carbon form to a 4 page, then a 6 page, and then finally an 8 page document.

One of the hallmarks they described when the "NEW" offer was being discussed was the simplicity, and the ability to return to something much more like a 2 page form.

So how did it not shrink, but instead become 9 whole pages???

They whittled all the Loan Contingency (item 5) information that took up 1/2 page into a mere Buyer representation of 1 paragraph.
We dropped all the discussion of Alternative 1 and Alternative 2 - the Inspection process - freeing up 1.5 pages.

Instead - they've filled the 9 pages with definitions and explanations. There were 2 references to HOA's; now there are 7 different parts that address HOA's.

In fact, instead of getting through the bulk of the terms - price, due diligence period, fixtures to leave/personal property to remain, closing date - in 2 pages, then having 6 pages of definitions, and then 1 page of signatures....

Item 1 is "Terms and Definitions" and is more than 2 pages long! Item 4 - the Due Diligence Process - 1.5 pages long. There's a whole page of Buyer Representations (item 5) and Buyer Obligations (item 6).

Most remarkably - there's an entire page of Seller Obligations. Which ends with, in essence - "If Seller doesn't meet all these obligations, then the Buyer can terminate and be refunded ALL of their expenses".

And this is where the crux of the new contract comes in. Which party is "at fault" and what the remedy is are much clearer!

Usually, only the Buyer can default. But what happened? Sometimes they got their earnest money back, sometimes their was a lawsuit for damages. Now - Buyer defaults --> Seller gets the Earnest Money and that is ALL.

Now, there's actually ways for the Seller to default. And if they do, then the Buyer has compensation - their Due Diligence Fee, Their Earnest Money, and any costs (like inspections, loan application, etc) they've incurred!

But regardless, the remedy is clearly spelled out...and one of those pesky definitions in Item 1 includes a "Loser pays all court costs" provision.

Will the Clock Strike Midnight?

2010-12-22T16:22:00.000-05:00

On the new forms changes? All December, fellow Realtors and brokers-in-charge have been wondering and whispering.

And now, with one business day before Christmas (though our office is closed as will be most) and thus 6 business days remaining before the "no grace period" implementation of the new forms arrives...

I have to agree - there's no way we SHOULD be going to the new forms on January 1, 2011. Oh, we can start using them, and maybe even we can have a transition period, or just even delay until say February 1.

But the forms haven't even been RELEASED in their final form, or even stamped "DRAFT" across the front, yet.

I've had several people take me up on my offer to send them the forms to review. That happened on December 5th..... I'm still waiting for those forms!!

The 3 Biggest problems with the Offer....

2010-12-18T15:14:00.000-05:00

...and will the New Forms solve them?

Four years of closings and countless problem-studying hours later, it would be normal to hope that these radical changes being made to the way we buy and sell homes would solve problems and issues.

Does it?

Well, Yes and No. here are the 3 biggest problems that occurred with the old Offer to Purchase:

Inspections and Repair Negotiations
Deadlines
Are we under contract...or not?!?!??!?

I'll look at how the new contract deals with these problems in inverse order:

1. Are we Under Contract, or Not?

In the past, the Termination Agreement (when a contract fell through) included 27 options for why the contract fell apart....and many of these options could occur the day of closing and the Buyer walk with their earnest money. Now, it's really a formality - with no reason needed during the Due Diligence period, though up to 9 scenarios provided (acts of God, contingent sales, etc).

Under the new Contract, except in rare circumstances - once the Due Diligence period ends - if the Buyer has not affirmatively terminated (nice term!), then we will be under contract, and we don't expect to see a lot of deals fall through, since Buyers will be forfeiting their earnest money. However, we'll also see more homes that are "Under contract/due diligence" being shown for backup offers than before.

2. Deadlines - or "Maybe you should do it by then!"

There have always been "deadlines" in the contract...and usually Sellers assumed these were actual drop-dead dates. But until 4 years ago, NOTHING was drop-dead, also known as "time is of the essence" in the contract. Alternative 2 and the revisions then introduced this concept finally as standard to live by. Still, the inspection might be due in 14 days, but that wasn't a "time is of the essence" date...so you might make your request on the 16th day. The closing might be scheduled for February 28, 2011...and you might not close until March 10th.

More importantly, there were anywhere from 5 to more than 10 "deadlines" to meet - ranging from a loan application deadline to a "for real this time!" closing deadline.

And now, there will essentially be only 2 deadlines: the due diligence period date and the closing date.

3. Inspections & Repair Negotiations

Under the old contract, there was the inspection due by date, then the Seller response date, then the Buyer response date, then the cost of repair contingency, then the repairs were done or not, in a good and workmanlike fashion. As you can imagine, all these dates and negotiations sometimes dragged on forever, to the point that closings were delayed, disputes continued at and after closing, and troubles arose.

Furthermore, Buyers often thought when the inspection said "Roof has exceed its useful life and you should budget for replacement soon" that the Seller should by golly be giving them a new roof! Only the roof wasn't leaking,meaning it wasn't in need of immediate repair (the contractual standard).

So again, the new contract addresses this issue with the singular due diligence period deadline. The Buyer will consider everything they choose to during that period, they may negotiate repairs with the Seller, but everything needs to be in writing and agreed to by 5 pm on the Due Diligence date (certainly some repairs may remain undone).

YEAH YEAH - BUT WILL IT SOLVE THE PROBLEMS?????!?!!?!?!??!?!

Well, I'm sure my thoughts have given some hints, but this old post is long enough as it is.

Ch-Ch-Ch-Ch-Changes Affect Every Home Sale in NC

2010-12-05T21:21:00.000-05:00

Beginning January 1, 2011, there are some HUGE changes coming to the buying and selling of homes in NC. As of the New Year, 10 forms required for home sales are either completely new or have been greatly revised. Most importantly - the Offer and the Listing Agreement!

If you've bought or sold a home in the last 4 years, you've seen the concept of Alternative 2 and an Option Period. Ever since the "Option" was introduced, I've been told time and again how we were headed towards this method. Still, I'd estimate 95% of home sales in the Triangle remained the good ol' familiar method:

1. Find the home, make offer, negotiate the contract.
2. Perform inspections, negotiate repairs
3. Apply for financing, get loan approval and appraisal of the home
4. CLOSE the sale or purchase of the home (assuming 2 & 3 work out!!)

We've heard how "other states do it really different" and "going to escrow" and "due diligence periods". But we'd never been forced to actually buy and sell homes in the Triangle this way.

Beginning January 1, 2011 - we WILL be buying and selling homes this way. There's no trial run, no "well, you can still do it the old way", no Grace Period even.

These changes are so significant, so important, and so conceptually foreign to us all, I'll spend several posts in December going over the important ones. I've already taken the Continuing Education and attended every Seminar offered. I'm shocked not every Realtor has - but every seminar I attend, many raise their hands saying this is the first they've heard of the changes.

If you'd like a copy of any of the 10 forms that are changing, just shoot me an email and I'll gladly send them to you - they're not anywhere I can link them for you yet!

Next up: How do you cut an 8 page form but make it 9 pages?

Top 10 Fall Yard Cleanup Tips & Bonus Composting Basics

2010-10-21T23:09:00.000-04:00

The leaves have barely started falling, which gives us all just a moment to get organized before the great Oak Leaf onslaught happens in Raleigh. I have two enormous oak trees in the front yard which produce every other year....and I am reminded because this is an "It's raining acorns!" year. More acorns than an army of these could handle...

So, I was very happy to see this article from This Old House magazine about 10 great steps to get your lawn and yard ready for winter.

To top it off, I found out in our area of the country, now is a great time to begin composting! So TOH magazine provided the 7 Basic steps to beginner composting!

So, these acorns, oak & maple leaves - and last cutting of grass before the onset of winter - might actually do me some good come spring? An added bonus!

I'll let you know how it turns out. In the meantime - if you have a great fall cleanup landscaping company - let me know so I can send them some more business!

Raleigh in Top 5 Smartest Cities

2010-10-08T18:04:00.000-04:00

So says the new US Census if you measure by the % of the population with college degrees.

Raleigh ranks #4 in the US, behind DC, San Fran, and San Jose/Silicon Valley. Boston has the same percentage of grads as us if you round to two digits, but when you're brainy, they carry it on out more decimals, allowing Raleigh to claim superiority!

Anyway - here's the CNN/Money Magazine article which adds to our accolades and tells why so many people and companies look to move to the Triangle!

Teaching an old Dog new Tricks

2010-10-01T16:50:00.001-04:00

You know what they say - but even an old dog like me SHOULD be able to learn a new trick or two in their business.

And so, after a 6 month hiatus, I return to my blog with a renewed vigor and commitment to keep it fresh (2x a week at least), keep it valuable, and keep it UP! An old dog like me went MIA for 6 months while I tended to the business of helping folks buy and sell homes.

And thankfully for me, I was very very busy for these past 6 months! But the time has come, and here was my inspiration:

The Mordecai Mansion and Park

Cruising the aisles of the Harris Teeter, my new kindergartner Kate and I ran into her teacher, Mrs. Mordecai. She proclaimed, "Oh, Kate and I are buddies because we both have last names that people pronounce wrong!"

I asked "What are they saying, Mor-de-KAY?"
She said "That, and some say Mor-duh-KYE, too."
"Oh, well, Mor-duh-KYE is acceptable", I said. "It can be said Mor-duh-KEY or Mor-duh-KYE, the neighborhood here in Raleigh". After all, I've sold homes there for 12 years and heard folks that live there use both.

She quickly corrected me, graciously - once and for all.... "Well, it's my family, and I'm pretty sure I know how to pronounce it! Yes, Mordecai near Oakwood is named for my family."

So, here's to you and your family, Mrs. Mordecai - rhymes with KEY - and thanks for helping this old dog learn something new, and something I'll never forget now.

Now, as to these stories of the original mansion being haunted - I'll need to learn more!

Forbes says Raleigh #3 for Business & Careers

2010-04-14T14:25:00.000-04:00

Hot on the heels of our area's high ranking for School and Home Value (see below) Forbes has released another "Best of" list that puts Raleigh at the #3 large metro in the land for Business and Careers.

Here's the Forbes story.

I'll take all the accolades and acknowledgement we can get. If there's one thing I've learned about the process of buying a home in the last 2 years - it's that "consumer confidence" means a LOT! And when the media has good news, they like to report it (I first saw the Forbes story on WRAL.com ). Unfortunately, they also seem to like reporting bad news.

These rankings do provide additional fuel, though. The real estate market has definitely picked up so far in 2010.

Forbes Names Raleigh #1 and Cary #3 For Schools/Housing Value

2010-04-07T10:37:00.001-04:00

Using data gathered by http://www.greatschools.org/, Forbes magazine yesterday announced its 25 best cities for your housing buck among three categories (small, medium and large cities).

Raleigh was ranked #1 among large cities (pop > 300,000) and Cary was ranked 3rd among mid-size cities.

Obviously, this is great news for all residents of the two cities! And since we share 1 school system, it's actually great news for ALL families in Wake County.

I'm not sure who wrote the text for each school, but interestingly, Raleigh's text talks about the diverse school offerings, plans for higher education, and our relative insulation from the economic and housing woes which have affected many areas of the US worse - all accurate statements!

But Cary's write-up dwells almost entirely on how the whole school system and thus our future has been jeopardized by November's School Board election and the moves made so far by the "new majority".

It was just odd, because if you had put the two write-ups in front of me, I would have certainly thought the one that spoke to diversity would have been Raleigh's, not Cary's.

Personally, I just consider it one more misconception in the whole fight we're undergoing, and will continue to see for many months to come. Whether you are "pro-diversity" or "pro-neighborhood schools" - the diversity issue is going on in Raleigh, not Cary. Even though Cary's schools are MUCH less socio-economically diverse than Raleigh's.

Top Local Economist Predicts Economic Growth in 2010

2010-02-04T22:04:00.000-05:00

In a speech delivered to city and county managers gathered from around the state in Durham, NC State Economist Mike Walden predicted NC jobs would grow by a modest 40,000 in 2010; that figure would outpace growth in the US at large. He also echoed consensus predictions that nationally, full recovery could take 3 or 4 years.

The Durham Morning Herald's Ray Gronberg reported on the speech in an article today.

In addition to being extra-trustworthy given his Wolfpack affiliation, Walden has earned a wide following and solid reputation from officials around the public and private spectrum in the Triangle and North Carolina.

How to Start the HomeBuying process

2010-02-04T14:25:00.010-05:00

Late at night, while I'm catching up on DVR'ed shows, I check out various real estate sites like Zillow.com and Trulia.com and provide answers to relevant questions. Last night, I answered this question:

I am thinking of buying a home in the Raleigh/Cary area. Is it a good time to buy a home?

It's always a popular question - now more than ever, people are cautious about making such a huge investment in a Raleigh home. Here's my answer:

Let me try and simplify for you - there are 3 reasons it IS a good time to buy. You haven't said, so I will assume you are a first time Buyer - and please forgive me if I'm wrong.

Reason 1 -Tax Credits. It is time to act NOW to buy. The Tax Credits ($8,000 1st time, $6,500 repeat) expire April 30, 2010. You have to be under contract on your home by that time. You will have until June 30 to close.

Reason 2 - Low Interest Rates. Rates are at a 40 year low, and they're held low by the Government right now. But the government will stop this at the end of March. If rates rise 1%, you've lost 12% of purchasing power. (See my chart on the right - rates are still low)

Reason 3 - Good Home Prices. If you're buying under $300,000 then prices are at least stable, and probably rising - the home will apppreciate. If you're buying above $300K, the higher you go, the more prices have dropped. And our area is stable enough economically that prices should not decline for much longer even in the higher ranges.
Here is what you need to do to act now.

Step 1: Get pre-qualified for mortgage financing.
Changes in the mortgage rules have made it more important than ever to make this the very first step you take. A great mortgage lender will make sure you're qualified for what you feel comfortable spending, and tell you any steps you need to take financially (saving for closing costs, downpayment, etc). Note I said "what you're comfortable spending" - you will probably, based on your income, qualify for more than you expect. You'll want to know how much you qualify for, should what you decide you want in your home bumps your price range up.

Step 2: Search for Homes Online.

Using the price range you're comfortable with, search online for homes. Of the 100's of results you'll get - pick out 5 to 10 homes that appeal to you from the pictures and write down why they appeal to you.

Step 3: Find a Realtor
A qualified Realtor will help you from the pre-qualification all the way to closing. Using your list of appealing homes, we'll help you decide what features you're looking for. We'll help you answer the questions about "what type of home do I want?" - in features, location, etc. We will ask you questions you may not have considered but are important to your decision. We will tell you whether you can get everything you need in the price range you're comfortable with, and we'll tell you honestly whether you need to spend a little more to get what you want. A qualified Realtor will be able to guide you through every step of the process - not just be the person that shows you homes.

Using a Realtor as your Buyer's Agent costs you nothing as a Buyer.

In my opinion - it really is that simple. Get pre-qualified, get an idea of what you like, and find a Realtor. At the same time, any expert Realtor can suggest several qualified mortgage lenders for you to speak with, and any qualified Realtor is willing to sit down and sift through the 100 "possible" homes to decide what you do and don't like right off the bat.

7 Reasons NOT to Sell Your Home without an Agent

2010-01-28T22:32:00.002-05:00

And not created by a Realtor!

MSN Real Estate helps me know what's going on in the "pop" world of real estate. This morning, this article popped up on my Twitter account. The article was written by Aryeh Katz for Investopedia originally.

While the article is really titled "7 Things to Consider Before Selling Your own Home" aka For Sale By Owner, it's pretty clear the writer - giving investment advice - says let a Realtor help you sell your home. Thanks Aryeh!

Here are the 7 Things to Consider:

Exposure to potential Buyers
Market Information to Price and Position your house correctly
Negotiating Ability for when you receive an offer, and get the inspection report.
Legal Issues to bring that contract you worked for to a successful closing.
Value-added Services that companies like PruYSU offer
The Eccentricity Factor
Your Time spent marketing, showing, answering questions, negotiating offer(s) and satisfying the contract

That's 7 pretty good reasons. When you get down to it, you can boil it down to 2:

Exposure

Realtor.com gets 8 million hits a month - typically more than Zillow.com and Trulia.com combined - and 10 times what ForSalebyOwner.com gets.

85% of Buyers use an Agent - so the Triangle MLS will be used by 85% of Buyers, but not a For sale by Owner.

Unless you live on a well-traveled road - where many people DON'T want to live - you can't get that kind of exposure as a FSBO.

And this doesn't even consider the advantage that a Realtor who knows how to actually MARKET your home will perform compared to you. Are you a home marketing whiz - if so, you can offset this advantage that Realtors have.

Experience
However, even the best internet wizards who might figure out how to get better exposure, and marketing gurus who can make their house appeal to Buyers, can't say they have as much experience as a qualified Realtor.

Most people own 3-6 homes in their life. Qualified Realtors do that every month or quarter - and with laws changing every year, the sale you find yourself involved with might be very different than the last time you bought or sold a home.

That experience helps us not only with the legal issues (which an attorney will handle for an hourly fee), but the home inspection issues & loan issues too.

Nevermind that 85% of your Buyers will have an experienced Agent, so you'll be paying a Buyer's Agent anyway AND trying to overcome their experience.

What Happens To Interest Rates in March?

2010-01-13T20:47:00.001-05:00

Who knows?

The Wall Street Journal Online had a good article about the impending decision by the Fed to stop buying mortgages. Without repeating the details, here's the high points:

The Fed has said for 6 months they were going to quit being the #1 buyer of mortgages as of this March. Since that time, rates have risen from that 4.75% you kept hearing about or wishing for.
The Fed's purchases have caused artificially low interest rates - that's why they dropped from 6% to as low as 4.75% and have "only" risen to 5.2% now (also see my December 22nd post when rates were 5%). Just click on the chart to the right.
If/when the Fed exits, rates will rise.
If you read the article, you'll see what I've said before - rising interest rates means lower purchasing power. a 1% rise in rates means you can afford 10% less house. A "mere" 1/2% rise would be 5% less house.

One man says rising rates - combined with several other factors - could cause a national 20% drop in housing prices. He's entitled to his opinion, and he makes more money moving the market than I do helping folks find a home, but I think it's intended as some scare tactic. Besides, it's national and wouldn't have nearly that affect on Raleigh homes.

The whole point is this - we can be reasonably certain that this spring Fed purchases will at least lessen their purchases and that interest rates will rise. Combined with the possible benefits of the Tax Credit, this really is a good time to buy a home if you're already considering or planning on buying in 2010. It may be the only way to "time the market" for years to come.

7 Seller Tips to get Ready to Sell your Home

2010-01-12T23:08:00.000-05:00

There are two types of real estate advice - timely and timeless. Timely advice requires analyzing the market NOW and deciding what features are attracting Buyers now, how to price your home, how many showings you should expect and how long it will probably take to sell.

Timeless advice is just as important. No matter the time of year, and no matter the demand for homes, these tenets always hold true - you've probably heard them all before.

If you're thinking about selling in 2010 - and most Raleigh homes come on the market between March and June - then read this article of timeless tips from MSN Real Estate and refresh your memory on how to be prepared to sell your home.

Just think - March and the first signs of spring are less than 60 days away!

Blackberry Coming to the Triangle

2010-01-06T12:21:00.000-05:00

well, of course an actual Blackberry is about as easy to find as an accent around here, but the big news is that Research in Motion (RIM) the maker of the device is opening an R&D facility in the Triangle.

Think working for them would be a good career? Check out their link.

I think I know where it will be, but since they declined to give details, I won't speculate - but expect it to be convenient and in the RDU Airport/Brier Creek area.

Triangle Colleges Are Best Values in the Nation

2010-01-05T23:14:00.001-05:00

Kiplinger's released their annual survey of the best public college values and TWO of our universities rated in the top 10 nationally - UNC at #1 for in-state students and #3 for out-of-state, my alma mater NC State at #10 in-state, and 9th for out-of-state.

Now, while it may personally pain me to once again have to accede greater honors to UNC, the fact that NC State ranked in the top 10 in both categories among the hundreds of options still makes me quite proud.

And just think - within a 30 mile radius lie 20% of the best public colleges out there. Is it possible that any other area benefits from such a concentration of greatness?

Just another reason that makes a TON of sense why this is a great area to call home!

First Night Raleigh Downtown Thursday December 31st

2009-12-30T21:15:00.000-05:00

Kick the new decade off with the most family-friendly event you can attend for New Year's Eve - First Night Raleigh returns for the 19th time downtown.

At the website, there's a list of places (Harris Teeter most notably) to buy your badges in advance and save a few bucks - a great financial move to end one year and begin another.

There are literally more things to do than can be done, giving you a plethora of entertainment choices. Kick it all off beginning at 2 pm at Museum of Natural Sciences. The best part for me? The girls love to go and see the 7 pm Acorn Drop. That means normal bedtime and a chance for alone adult time as the clock winds down to midnight!

Where are home prices headed (V1.0)

2009-12-22T16:15:00.001-05:00

While I hope they're informative and useful, I've noticed my posts tend to get a little long. So, here I am to break down "Where are home prices headed?" into several shorter posts. Today:

A Satellite View of the Triangle and Raleigh Home Market:

Satellites take those pictures from waaaaaaay up. You know where NC is by the bump along the coast, but you can't tell what is where until you zoom in closer. So the Satellite view is based on national information as follows:

Federal Housing Finance Agency

says the South Atlantic region (where NC is) is down 3.2% for the last 12 months. And as I noted in an earlier post, our region was up 0.7% for September 09 and up for the 3rd quarter.
Case Schiller - the granddaddy of national indexes. This is for the end of the 3rd quarter.

Unfortunately, they only do 20 metro areas and Charlotte is it for NC. Charlotte is down 8.1% over 2008. Charlotte was up from January '07 to January '08 though. Nationally for 2008, the median price was down 16.6%. From its peak, Charlotte was off only about 7% through the end of 2008. And the 4th quarter of '08 is when Case-Shiller says Charlotte had most of that decline.

So let's zoom in a little - look at the Triangle, but using National information sources.

NAR Market Research Map

Durham-Chapel Hill, NC
Third Quarter 2009
Median Home Price
$184,300 Yr. Change: 3.6%

Raleigh-Cary, NC

Last Updated by NAR on Nov 11
Third Quarter 2009
Median Home Price
$207,900 Yr. Change: -6.3%

NAR says the median price of homes sold is up in Durham-Chapel Hill but down in Raleigh-Cary. Median price isn't the BEST way to measure, but that's another post too!

Zillow: now Zillow is fun, and it's OK for the satellite view. But I've never seen someone state their accuracy was within 5 or even 10%.

Durham Metro (includes Chapel Hill): up 0.2% for the quarter and since October '08
Raleigh Metro (includes Cary): down 0.3% for the quarter, and down 3.5% since October '08

For comparison, Zillow says Charlotte is only down 4.5% (Case Shiller says 8%) for the year, so go figure.

Trulia a competitor of Zillow's also offers their own market data. They say for the last year that median sales price:

Raleigh is up 1.6%
Cary is down 20% (don't start crying yet!)
Durham is up 2.0%
Chapel Hill is down 6.9%

Now we begin to really see why the satellite view doesn't work so well. How is Cary down so much? How is Durham doing better than Chapel Hill - and hey, I was born in Durham! Go ahead and click through to Trulia and play around - look at those zigzag charts all over the board.

Next up - let's get a birds' eye view straight from the MLS and the TARR Report.

What Low Rates Really Mean to You

2009-12-21T16:05:00.000-05:00

To continue the discussion about whether these low rates should make you think about buying now, rather than waiting to see whether the market prices go down...

Let's say you're being reasonably conservative, and your debt/income ratio for housing expenses is going to be 28%. That's the "old school" number (combined with a total ratio of 36%) mortgage lenders used to go by - you can also reasonably use 45% total debt/income ratio now.

Here's the definitions:

Income: This is your total annual salary or wages, before withholdings. It is not your paycheck amount. For self-employed, commission, or bonus-driven income, you should start by speaking with a lender to find out what they allow or consider.
Debt/Income Ratio: Your total annual loan payments divided by your income.

Example: You earn $100,000. Your total monthly debt payments (mortgage, car loans, student loans, etc) are $2,000. Your debt/income ratio is ($2K x 12)/$100K = 24%.

Going forward in our example, we'll assume you earn $100,000 a year - just because it's a nice round number.

So, you're thinking of moving up in home, or buying your first home. Today's interest rate is 5% for conventional financing (loans up to $417,000 and lenders won't require 20% down payment).

Including taxes and insurance, today you could easily buy a $400,000 home - which could get you a really nice home!

What if you want to wait, concerned that values will go down. While you wait, the interest rate rises to 6%. Your payment rises, and so your debt/income ratio rises. In order to maintain the debt/income ratio - you can only afford a $350,000 home. (see the end of this post)

A 1% rise in the interest rates will either:

a. Make your payment increase about 12% (or $225 every month in our example)
b. Reduce your purchasing power by 12%.

If you wait and pay a higher interest rate - ALL of the $225 a month is going to interest - it's not affecting principal. If you stay in the house 10 years, that's $27,000 more in interest you'd pay. In fact...

You'd be getting LESS house and paying MORE interest.

And so, simply put - the VALUE of homes would have to drop by about 12% in the same time that rates only went up 1% in order for you to come out ahead.

Want to play around and see? Use my Mortgage Calculator Widget - it's interactive, graphical, and easy to look at many scenarios.

Need more help, or have a question? Just ask! Next time, I'll look at the next most important piece of the puzzle - what HAS happened to home values in the Triangle?

So ... is NOW a good time to buy?

2009-12-18T23:12:00.013-05:00

So, after you've pondered the 5 Questions then it's time for us to consider the all-important question: Is NOW a good time to buy? This is also known as

"What's going to happen to interest rates?" or

"What's going to happen with home values?"

And these are questions 3-5.

Nationally (not nearly as much locally), people were buying homes for short term gain, and their jobs caused them to relocate. Since home values were rising, neither was risky or a concern.

When interest rates were perceived as being higher - the rate didn't matter to folks thinking of buying a house. Interest rates only mattered to people refinancing an older mortgage. Buyers were more concerned with how much more waiting would cost them in the home price.

Today, people are too "home price" focused - fearful that the bottom is absolutely going to drop out of the local market and if they do buy TODAY, then a year from now their house will be worth 10% less or worse.

I'm here - among many other voices - to say it doesn't matter... if you've said YES! to questions 1 &2 - you CAN afford the home and you DO like the home. And these are the same two first hurdles to clear before writing an offer they have ALWAYS been.

In 2006 and 2007, which was the "peak" of our market, the average interest rate was 6.4%. Today, interest rates are below 5%, and have averaged 5% this year. And the 30 year average of rates is about 8%.

So, can rates go lower? Maybe - but not likely. Rates are most likely to go up - we're 40% below the average right now, and the lowest point anytime in the last 30 years.

So, if

you can afford the home
you like the home, and
you're going to stay in the home for many years

Why wouldn't you take advantage of these abnormally low rates now? Why wouldn't you pay a much lower rate for the time you do own this home? And how much will not buying a home now (with these low rates) cost you if rates go up as predicted?

To analyze that question, I'll explain next!

5 Questions to ask before Buying a Home

2009-12-16T21:38:00.003-05:00

RISMedia Article

If you saw my Facebook post yesterday or perhaps read other local blogs which have simply cut and pasted the article...bad bloggers!!!... RIS Media (a news gathering service) posed these as 5 questions to consider before buying:

1. Why are rates so low?

a good question, they don't really give a layman's explanation.

2. Are rates expected to stay this low?

now HERE is the $1,000,000 question! And they give some great information:

a. rates are are about as low as they've ever been, and lower than they have been for more than 30 years.
b. the Fed's purchase of loans, which has helped drive the rate down, is expected to tail off in 2010.

3. Why do different mortgage surveys come up with different (average) rates?

wait a second, who cares what are the average reported interest rates and why is it important to consider? The question is what specific rate/program can I get if I buy?

4. What else does a consumer need to know?

they make 3 good points - but one of them is about refinancing. Do know that "RATE RATE RATE" not only isn't the ONLY thing, but a lender can't tell you YOUR rate until they pull your credit report and know how much money you're putting down.

5. So is now the best time to buy a home?

Finally, something a Realtor can finally get our hands around! "It depends on the personal situation" the article says - and I couldn't agree more. For some people there indeed never HAS BEEN a better time to buy - for some, there's never been a worse time to buy?

So, how do YOU decide if NOW is a good time for you to buy?

Here are MY 5 Questions to ask yourself - and ask me to help with the answers!

1. Can I afford the expenses of the home - the mortgage, taxes, insurance, utility bills?

2. Do I like the home's features (location, condition, layout, size) enough that I'm willing to overlook a few negatives that I can change over time?

3. Am I buying the home to live in and enjoy or make a short term gain?

4. Am I likely to move from the home because of my job? If yes, when is realistic?

5. Based on the information available, in the timeframe I will most likely own the home will the value go down, or go up?

These have always been the 5 essential questions to ask - and especially DO I LIKE the home and CAN I AFFORD the home?

More to come...

And finally for the day...

2009-12-10T16:46:00.003-05:00

December 10th goes down as one of the best days of the year for me...easily in the top 5.

It was 8 years ago today, at 6:37 pm in Rex Hospital here in Raleigh, that Nancy and I welcomed our first daughter Mary Margaret into this world.

It amazes me now how long ago that seems, but yes I can still remember most of it like it was yesterday. And now my first baby is growing up so fast that almost reaches my shoulder, can read about 2 grade levels above, and just the other day we learned some new math tricks.

So,

Happy Birthday MMB

I love you - soooooooooooo much!!!!!!!

"If you have a chance..." the Sequel

2009-12-10T16:30:00.004-05:00

So to follow up my post from late November, I did "get a chance" (we scheduled it a week in advance actually) to meet these clients last Saturday, in a cold drizzle (sorry, Zoe!) at a home they've had their eye on in Brier Creek.

And it reminded me why everyone can benefit (not just MY satisfied clients) from what we do as Realtors. Here they thought they were just going to see a house that they wondered whether the pictures were an accurate reflection of the inside and the lot.

As we walked through the home - and we spent an hour inside this house they weren't going to buy - I kept pointing out different items so that we could focus our search when the time is right. And since they hope the next home will be "it" for a good 15 years or more, thinking ahead is really important!

Do you want a first floor master, a 2nd floor master, or don't care?
How open do you want the kitchen to the family room?
See how they finished attic space into this bonus room?

and the list went on and on... (it would bore me to try and recount the dozens of questions I asked)...of all kinds of things they hadn't even thought about thinking about.

the point is - while showing people homes is the most visible and easiest thing I do (and sadly some people think it's all Realtors do), what you are hiring a Realtor to do is apply their expertise to help you select a home based on what you tell them,, what they ask questions and find out more about, how they negotiate your offers, and how they handle the closing process (yet another blog post).

Market Slowly Rebounding Nationally

2009-12-09T16:24:00.004-05:00

Although we continue to have median price declines (blog post to come) and longer days on market locally, more good news is coming out nationally.

For the second straight quarter, home prices have risen nationally. Still trying to figure out which region the Triangle is in, but here are the figures:

South Atlantic, slight uptick of 0.6%, to 2005 price levels.
Middle Atlantic, up 1.1% for the quarter, to 2006 levels (which is what I'm seeing in the luxury ITB market, yet another blog post to come).

I know the South Atlantic includes Florida, which has been really crushed by rampant speculation. If NC is in that region, that's why "we" are involved in 2005 levels.

Additionally, inventory levels have subsided significantly - nationwide more than 28% over the same month in 2008. And inventory in the Triangle is down as well, about 2.5% over last month.

Insanely Low Interest Rates

2009-11-30T09:54:00.002-05:00

On top of lots of good recent news, the rates I got today from my mortgage lenders just astounded me. All assume a 1% origination fee and solid credit with standard downpayments. Of course, all are subject to change, and I'm giving them here as indication of where rates are and have been recently.

30 year FHA ($295K loan amount; 3.5% downpayment): 4.75%

30 year fixed conforming (loan amount to $417K, minimum 5% down and likely 10%): 4.625%

15 year fixed: 4.25%

30 year Jumbo ($900K loan amount, 20% down): 5.5%

ARM's: personally, I won't bother with ARM rates today, because with fixed rates that low there's no reason to "play the market".

These are "purchase money" rates - meaning for a new home, not for a refinance. But refinance rates are low as well. If you need the info for highly-qualified mortgage lenders, send me an email or call me and I'll be happy to help!

Well....

2009-11-29T21:23:00.003-05:00

I do say in the opening blurb that I know about the Wolfpack, and the Tar Heels, and Duke. And I do apologize in advance to all my Duke friends who didn't get a congratulatory blog post after their Blue Devils handily dismissed and whipped my Pack IN Carter-Finley in October.

But, any victory for the lil' ol' Wolfpack over the vaunted Heels is definitely worthy of a little celebrating. And what a game it was - there really is nothing quite like being in Carter-Finley with the crowd going nuts and the offense and defense reacting to the crowd's full-throated roars (yes, I've been hoarse all day).

So, for the 3rd year in a row, my lovely UNC bride has had to put up with a big grin after our football game. Best news of all might have been my 7 year old already knowing the result - and being happy with me for the Wolfpack.

And I couldn't have had half as good of a time if it weren't for some great folks who put up with me:

Kaitlyn, Heather and Ryan Rand - thanks for the parking pass and the ticket; and the postgame Jambalaya.

Andy Feldman, Andy Felton, and David Ferrell - thanks for letting me sit with you briefly, until Yates threw another 70 yard score. And great pants David - love your enthusiasm and team pride even as a visitor.

James & Perry Davis - glad I ran into you, and glad I talked you into going back into the game James! Just in time to find great seats in the NEZ and watch Wilson to Spencer work one last time....AND a blocked field goal right in front of us.

So yes, all my friendly Tar Heel fans, we'll wait until basketball season and I know the Pack's chances there aren't so good right now - probably worse than they were Saturday until kickoff.

"If you have a chance..."

2009-11-24T15:26:00.002-05:00

Yesterday I was having lunch with an existing customer who is doing some long-range planning to move up from his townhouse now that he's started a family. We've set him up to receive timely updates on new listings and status changes for his favored neighborhood. He can begin to "watch" the neighborhood so he sees what homes are listed for, where the master bedroom is, what type of updates he can expect, what the home looks like through pictures, he's using the built-in Google Maps feature to take birds' eye looks at the home and street.

So he asked me - "Bo, if you have a chance and are in the neighborhood, could we go see one of the homes."

Of course! I said - because of course, that's part of what I do - make appointments to let people see a home so they might decide whether they'd like to buy it or not. Of course, there's 1000 other things involved, but this is the easiest and definitely the most fun for me as well.

And no matter how good the pictures are online - even Heather's professional ones - eventually you have to go inside a house to tell whether you have any interest in living there yourself. No matter of computer technology will ever replace walking through a front door and taking it all in.

So, while he's probably not going to buy for another year, and while I may not be "in the neighborhood" at a convenient time for him - or the Sellers of the home he wants to see - of course as part of my professional responsibility to him, I'll make time.

Wherever you are in the process of making a move - ready to buy before 2009 ends (let's get busy then!), spring of 2010, maybe in 2010, or heck, more than a year out...

there's something I can do to help with the process and that OF COURSE I'd like to do. Want to start your own home search just online with all the tools available through MLS or PruYSU.com and get monthly updates? I can do that. Driving through a neighborhood and want to know what that great-looking house is selling for? Call me (or better yet, ask me how to get the iPhone app or Blackberry program)!

Tax Credit Update

2009-11-24T15:16:00.002-05:00

One of the questions I had regarding the new portion of the tax credit, providing the benefit to existing homeowners as well, regarded the "owned a home as your primary residence for 5 years" qualifier.

I was concerned that if someone had recently sold a home they had lived in for 5 or more years, but now were renting, that they would not be eligible for the credit. For example, if someone did own a home in New York and had moved to the Triangle and was renting a home for a year.

Thankfully, I have now learned that as long as you owned one home for 5 consecutive years in any of the past 8 years, you are also eligible for the $6,500 tax credit. However, it must have been 1 home, 5 years - not 2 or 3 homes but none at least 5 years.

The April 30, 2010 under contract and June 30, 2010 closing deadlines apply.

Also - to be clear, 2 examples:

1. If you would owe the IRS $8,000 in income taxes, then after taking the credit, you now would only owe them $2,500.
2. If you've already paid the IRS, or otherwise owe LESS than $6,500 you will get an actual cash refund for the difference. Owe them $3,000? Get a check for $3,500.

Still confused? Let me know!

Tax Credit Extension & Improvement is Now Law

2009-11-10T15:08:00.002-05:00

Indeed, the House and Senate passed the extension and improvement as outlined below, and President Obama signed it into law on and effective last Friday, November 6th.

The relevant deadlines went from Dec 1, 2009 to close to under contract to purchase no later than April 30, 2010 and close the purchase no later than June 30.2010.

I have a few questions myself that my mortgage experts are working on - if you have any questions, please leave them as a comment and I'll be sure to find out the answer for you!

Home Buying Tax Credit News

2009-10-30T15:23:00.002-04:00

The Senate has reportedly reached a compromise which would extend the "First Time Homebuyer's Tax credit" of $8,000 and possibly even improve it as follows:

raise the qualifying income limits to $125,000 for single taxpayers and $250,000 for joint taxpayers, from the current $75,000 and $150,000.

buyers must have sales agreements in hand by April 30, but they will have until June 30 to close. Note - we're hearing about the last minute rush for December 1st failing because of demand and the Thanksgiving holiday. Most lenders say if you don't close by Tuesday November 24th, you probably won't.

It might even add:

A new credit of up to $6,500 for some existing homeowners. The reduced credit would be available to all homebuyers who have been in their current residence for a consecutive five-year period in the past eight years.

Read more: http://rismedia.com/2009-10-29/breaking-news-senate-plans-to-extend-and-expand-tax-credit/#ixzz0VRsN1x4S

What do you think about the Tax Credit already? Should it be extended? Should existing homeowners be given some benefit as proposed? Would this type of tax credit have an effect on your own moving plans?

Background on Jumbo Rates

2009-10-02T16:34:00.003-04:00

So like I said, I was chatting with a client about the rates. I double-checked with one of my friendly and outstanding mortgage brokers, Erik Taylor of First Citizens (919-716-2692, if you need him). Thankfully, he confirmed I was pretty correct, except I've included his corrections in italics:

Here's the deal on Jumbo rates - waaaay back in the day, they were significantly higher, because the Banks had to hold the paper "in house" and there was no secondary market.

Conforming rates have always been lower because they were following a laundry list of guidelines and then selling them off to the secondary market willing to take what was considered to be "A" paper - because default rates on mortgages were so low.
Eventually, a secondary market for Jumbo loans developed - but since they didn't QUITE meet the laundry list of requirements and didn't have any backing - the rate premium was about 1%, and they were often ARM's or balloon maturities (says Erik).

As more and more loans exceeded $417K (think California real estate prices) and some history was developed that eventually said to the secondary market "you know what, these are ALMOST as safe as conventional, and you're dealing with higher income/more credit responsible people" - the spread got as low as ~1/2%.

Then - the bottom fell out with the credit crises last year. If you recall, nobody (not even GE) could easily get financing. So nobody wanted to buy the Jumbo loans, and the Banks themselves because of the declining real estate market as well as their internal issues, didn't want to make Jumbo loans. Now, they couldn't flat out say NO to ALL their customers, so what they did was jack up the rates since now they were back to holding them in-house again.

What we're seeing today is the pendulum swinging back towards rationality, a secondary market redeveloping, and thus rates have come down.

Sanity in Jumbo Mortgage Interest Rates

2009-10-02T16:20:00.002-04:00

I was scared to say anything last week fearing that I might jinx it.... but thankfully interest rates for Jumbo mortgages (those over $417,000 generally in our area) have finally returned to what we're used to. Hopefully, this will help some folks - Buyer and thus Sellers - make the home much more affordable.

Today's JUMBO rate is 5.5% for a 30 year mortgage (no ARM, no balloon). That's almost 3% LESS than they've been running. Today, conventional rates are 4-7/8% for a 30 year mortgage. Actually, there was apparently a 2 hour period where you could have locked 4.5%, but that's what trying to time the market will do to you.

As folks in my industry have said all year: rates are historically low, the choice among homes is high and prices are low, so now IS a great time to buy!

Good News on Triangle Foreclosures & Sales

2009-09-16T11:29:00.005-04:00

In its mid-year report, RealtyTrac announced:

Foreclosures for the first half of 2009 in the Triangle were down by 25%.

Comparing us to other areas - we're the 41st largest Metro area (MSA), but were only 145 (Raleigh-Cary) and 162 (Durham) in the foreclosure rankings. With 203 MSA's analyzed, those rankings put us in the best third for foreclosures.

With 10,000 sales in that period, and 16,000 homes for sale now, the 2,024 foreclosures during that period aren't as high as many areas. But that level of inventory versus the sales in the first 6 months needs to be corrected.

And we're working on it! Since the report was created, 5,000 homes have been sold. That's a pace of 2,000 homes per month; the first half of the year was only 1,667. We're already up 20% in volume.

Mens Underwear Sales Surge

2009-09-01T22:54:00.005-04:00

Or somesuch nonsense...

Washington Post article

Heck - Alan Greenspan apparently referred to it...

Sales of Men's Underwear are a Bellwether for Economic Recovery!!!

Sorry I couldn't find something real estate specific, but this is what I was told today. Now, I did have to Google the article and actually read it. And - it revealed to me once again how "it's what you THINK you hear/read not what the facts are that matters".

This whole Mens Underwear Index stuff was hailed this morning -

MEN ARE BUYING UNDERWEAR AGAIN!!!

But if you read the article, it just says the decrease is slowing. Men are going to buy less underwear next year than they did this year - and we really held on to our hole-ridden underwear apparently this year as sales dropped 2.3%. And that was the first drop EVER (of course, ever is since 2003 it says).

So is a whacky "economic indicator" that's only 5 full years in the making really something to hang your underwear on?

MEN BUY NEW UNDERWEAR EVERY 90 DAYS!!!

Someone claimed the article said. I didn't see that. I saw one guy who normally buys a pair every 90 days. Heck, I never buy underwear - I get a few new pairs every birthday (May), Father's Day, and Christmas. I never put such thought into my underwear. I've got some that are holding strong several years later. But I do have a friend who has told me he completely replaces his underwear every year -maybe I need to ask him.

The article says:

But from 2004 to 2008, the proportion of men buying single pairs at a time increased from 5 percent to 8 percent, while the share of men opting for packs of four or more fell slightly, from 68 to 66 percent -- indicating that shoppers may be trying to save money by buying only when necessary.

What this indicates to me - a long-ago economics graduate - is that during economic growth periods, men (who usually don't care much about underwear) actually splurge - buy fancy, expensive single pairs - in replacement (a fancy economic term) of cheaper, plainer multi-packs. How the author draws the exact opposite conclusion, I can't say.

In "actual" economic news, however for us locally -

the EMPLOYMENT RATE increased in July according to the News & Observer and the ESC.

So, let's celebrate - and concentrate - on proven economic indicators and good news.

And maybe - if you qualify - take your $8,000 tax rebate and prove these people right by buying a bunch of new underwear!

Also this Saturday - Artspace Family Fun Day

2009-08-21T14:44:00.003-04:00

I also discovered that this Saturday, in addition to Cary lazy Daze, is an event hosted at Artspace in City Market downtown Raleigh. Long title - but simply put, it's a festival to celebrate and show off the work young summer campers produced.

The Family Fun Day runs from 12:30-2:30 tomorrow.

Apparently, everybody's getting their festivals and parties done just in time for the start of the Wake County School traditional calendar next Tuesday.

Cary Lazy Daze

2009-08-19T15:09:00.002-04:00

This Saturday, August 22nd from 9-5 is the 33rd Annual Lazy Daze Festival in quaint downtown Cary.

Yes, as I told a possible relocating family just yesterday - there really IS a downtown in Cary. The streets get pretty packed - with an estimated 60,000 or almost half of Cary enjoying the entertainment and numerous food choices. As one might expect in cary - it's great family fun.

Canes Rank as 2nd Best Pro franchise

2009-07-02T13:59:00.003-04:00

According to an ESPN article on all major (NFL, NHL, NBA, MLB) franchises, the Canes are ranked #2 in ESPN's "Ultimate Team Rankings".

Unlike the annual Forbes list which determines the financial value of franchises, ESPN measures "how much MLB, NBA, NFL and NHL franchises give back to the fans in exchange for all the time, money and emotion the fans invest in them."

Here's the Canes-specific page.

While they didn't rank #1 in any category, they were top 10 among ALL franchises in several, so it is the average of those scores that helps our Canes score so high.

Coming up soon - the July 24th Fan Fest at the RBC Center. Another chance for the fans to benefit from the Canes' fan-friendly ways.

Triangle Continues to Shine Nationally

2009-07-01T10:01:00.002-04:00

In good news - the US Census Bureau released a report, covered by the Triangle Business Journal naming our area and cities as some of the fastest-growing in the US. Of course, as is sometimes our government's wont ... the information is officially a year old!

Anyway, as of July 1, 2008 here's the cities that made the top 25 for growth:

Cary - #3 6.9% growth to 129,545 people

Raleigh - #8 3.8% growth to 392,552 people

Durham - #16 3.0% growth to 223,284 people

Going to the Census Bureau's website for their release, I also found this tidbit:

Among the nine cities making both lists of the 25 largest numerical gainers and the 25 fastest-growing from 2007 to 2008, more than half were in either North Carolina (Raleigh, Charlotte and Cary) or Colorado (Denver and Aurora).

Where did June Go?

2009-07-01T09:36:00.003-04:00

So I picked my head off the pillow this morning and got ready for work, again. It wasn't until my 7 year old reminded me about changing our calendars at home that I realized June is over, and with it, the first half of 2009 comes to a close.

Time flies when you're having fun, so they say. I'm here to tell you, it flies when you're trying to solve other people's problems too! And solving other people's problems is never fun.

During the heyday of real estate (which locally doesn't come close to some national hotspot bubble markets), anybody could be a Realtor. And lots of people tried, and enjoyed some success. Papers were signed, a sometimes random price was slapped on a house, an MLS number was assigned and *voila* here came the Buyers to write contracts quickly and sales were often closed in 21 days or less.

In June, I experienced just the opposite. Oh, contracts were written. But getting the contract to the attorney's table has become an incredible endeavor.

Some of it is the Buyers - for a variety of reasons they've been making unusual and even non-contractual demands. Is it fear? Or is it a newfound "empowerment" that whatever they say goes? I'm guessing a little bit of both because I've experienced both.

And some of it is the "lenders", who are with us all adjusting to whimsical and just plain odd new rules (that's many more posts entirely!) Like Realtors, lenders had it really easy for a looooooong time - there was an abundance of Buyers and an abundance of money to be lent to anybody and everybody.

Regardless of where the responsibility lies, it's got me convinced more than ever, and it's being proven to many Sellers throughout our market, that a Realtor's job doesn't end when the contract is signed. It's only just begun, even when the year is half over.

Summer 2009 in Downtown Raleigh - Starts Tonight!

2009-06-06T11:14:00.004-04:00

Just got my new schedule of Downtown Raleigh events for the Summer (well, through July that is). You can find the entire schedule here:

http://www.downtownraleigh.com/event/all_events.php

The fun really gets going TONIGHT with the Band Together event which is always a good time for a good cause. My friend Tom Lyon is heavily involved in this great event.

The main event that caught my eye was.. June 12th - Liquid Pleasure at Amra's. Thank goodness it's a Friday night!

Raleigh #2 for Housing Recovery

2009-05-20T15:49:00.003-04:00

On her regular segment for the Today show, famed NYC Realtor Barbara Corcoran named Raleigh as #2 of her top 5 markets most likely to rebound. Here's the video:

Visit msnbc.com for Breaking News, World News, and News about the Economy

What I found particularly interesting was her 8 criteria, and here's how they apply to Raleigh:

1. Job growth

Forbes ranked Raleigh, for the 3rd straight year, as the best place for careers. Moody's said: the three-year projected annual employment gain is 1.4%. according to Moody's Economy.com, 15th best in the country.

2. Rising Population

Population growth of 11,187 persons in the period January 1, 2008 through January 1, 2009 represents a 2.99 percent annual growth rate.

3. Great Weather

The recent cold snap notwithstanding, we're a SunBelt city!

4. Lots of First Time Homebuyers

With the Triangle such a great place for careers, with continued rising employment, and with all the college grads who fall in love and stay in the Triangle

5. Not Overbuilt Condo/Office Space market

This might be one area where we lag - though we have certainly suffered much much less than many areas. Thankfully, because a large number of condo projects were still only at the approval/architectural phase, early plans have been delayed and we haven't seen a glut of condo space. And, while office space vacancy is rising, again at its peak we were probably running to catch up to demand.

6. Vibrant Downtown where you can live without a car

While certainly 5 years ago, and for transplants even today we might not have a big-city-sized downtown, the growth in retail/restaurant/nightclub space downtown and the success of many places is reflected in overflowing crowds where once tumbleweeds roamed. With vastly increased parking space numbers, and the recent introduction of the R-Line, downtown residents are able to live, walk, work, and play downtown without driving to the suburbs.

According to the Downtown Raleigh Alliance : Currently, there are 3,277 existing units in the downtown business improvement district plus another 386 units under construction and 658 units planned. There are 15,000 residents within a one mile radius and 85,000 residents within a three-mile radius of Downtown Raleigh. Residents living within a one mile of downtown generate an average household income of over $58,000 per year, 70.4% have some secondary education and 73.2% hold a professional job.

7. Well-Educated Population

As I've shown before, we're 2nd only to San Francisco in these categories:

For percentage of workers with a college degree and employed in the private sector, excluding health care and education, Raleigh/Durham was 2nd in the nation at 39%, behind only San Francisco at 43%.2. For percentage of workers employed in "knowledge-based" fields, Raleigh/Durham was again 2nd at 12.8%, only slightly behind San Francisco at 13.2%.

8. Early Foreclosures

Now, here's an area that neither Heather nor I are sure we agree with Ms. Corcoran. Seems like her point is made in the video as regards San Francisco - where the median price they talked about dropped from $700K to $400K. So, while I can agree that any area as beat up as California real estate has been for about 3 years could easily make a "rebound" list, I'm not sure this category applies to Raleigh.

I can say that on May 13th, it was reported that NC foreclosures had dropped more than 13%, indicating that the worst may be behind us. Locally, foreclosures were basically unchanged.

Be Cautious Buying New Construction

2009-05-15T09:52:00.002-04:00

Ever since I started in the business, I've always advised my clients to be cautious about buying a home in a new subdivision.

In Thursday's N&O, there was a story about a neighborhood in Hillsborough experiencing some issues with the final stages of buildout. KB Homes, a large national builder best known for its association with Martha Stewart, is feeling the pinch of slower sales. They're changing the neighborhood by taking all the frills, bells and whistles they had been using and building "a box with windows", dropping the prices about $100,000 in the process. It's perfectly legal, and a sound short-term business strategy on their part - get the rest of the neighborhood built and sold and be done with it. But all of the people who had previously bought in the neighborhood - theirs wasn't a short-term strategy and now they're left likely holding the bag of lost equity. Quite frankly, they're pretty lucky that KB Homes is willing to talk and possibly work with them, as the HOA rules allow them to do exactly what they are doing.

And this is why to be cautious when you buy new construction. Here are my Rules of Thumb:

1. Use a Realtor, not the onsite agent, to help you buy.

It's sad to see so many people not understand the process. But when you go onsite, the agent will "clearly" tell you they ONLY represent the Builder. As such, their job is to SELL YOU on the neighborhood while fulfilling their legal obligation of disclosure. Buyers think there's no advantage to using their own independent Realtor. And yes, during boom times, we saw "the price is the price" and no negotiating on the price - and so too many felt that meant a Realtor gave them no benefit. But a smart Realtor would help you...

2. Decide at what stage of sales the neighborhood is.

In general, you never want to buy before the neighborhood is at least 50% built and sold, in my opinion. You also want to know, based on the current rate of sales, how much longer it will take to finish all the homes and sell them. Even a huge neighborhood, with 1000 homes, can be better than a small neighborhood of only 100 homes -if the big neighborhood is selling so quickly that the builder should be done soon. By following this rule of thumb AND determining the buildout period, you can avoid the problems they're having in Hillsborough. Yes, the last 3 or 4 homes may be sold at a "closeout discount", but a few among many has little effect on the equity of all the owners.

3. Don't buy at the edge of a developed area.

"Infill" construction - be it a teardown in an established neighborhood, or a small neighborhood created out of a small parcel of undeveloped land within existing developed areas - always is better than the "latest and greatest" neighborhood. Because when you buy the latest and greatest today, the builder is going down the road 2 miles to the next big parcel and building whatever is the latest and greatest 3 years from now. And the type of people who want "new new new" today - well, there's plenty of people who feel the same way and will commute an extra 3 minutes to get new AND the latest features. And you, as the owner of a now "used" house, have no control on the prices charged at the new subdivision. Many times, that newer sparkly, feature-laden house is actually less expensive than yours - an easy choice for a Buyer 3 years from now.

4. Don't overbuild for the neighborhood.

No matter where you build, unless you have psychic powers and know you'll live in the home 20 years or more, don't be the biggest baddest house on the block. It is the smaller homes, at lower prices, that always resell faster when the day comes for you to move up or relocate to a new area.

In a related issue - find out if the Builder has experience and success building the size, finishes, and price range of the home you're considering. You don't want to be the first to buy a local builder's $500,000 spec home when he's only sold $250,000 homes in the past.

5. Find out who you're dealing with.

Read the HOA rules ... actually - have your Realtor do it and review them with you! When does the final, not the developer's, HOA go into effect? Are there restrictions on what can be built? If there are to be amenities - are they already in place, or when WILL they be built?

If it's a national builder, Google is your friend, too - go online and research them. Now, remember - for every 10 satisfied customers, one of them will say something online, but every single unhappy customer will post it on the World Wide Web. Take some complaints with a grain of salt. But see if there's a pattern to the complaints. If it's a local builder - make sure your agent knows about them and even better ask for the names of the last 5 Buyers of their homes. And have your agent search for homes they built several years ago. Find out how satisfied with the house and the Builder those homeowners are!

Cardiac Canes At it Again

2009-05-15T09:11:00.002-04:00

This isn't the place to come for your sports news, so you already know the Carolina Hurricanes beat the Boston Bruins in a thrilling road OT game 7 last night. As overtime proceeded, I was really hoping the Canes would win - not just because I'm one of their newer Southern fans, but because of the way they played and carried the action in OT.

Time and again, the smaller Canes got knocked down, but their determination shone through in OT as the puck spent most of the time in the bruins end of the ice. Time and again, Chad LaRose or Matt Cullen - guys that are your and my size, not big burly dudes like Lucic - kept focused on the task at hand while pushing themselves to the limit. And then Scottie Walker, who also played the same way but has a bit more brawn to his game, made an unbelievable play off a quick Ray Whitney shot - swatting the puck from midair past the goalie for a stunning victory.

Now, as a longtime Wolfpack fan, I'm trained to believe in the mantra of "Never give up!" To see another team wearing red (well, white last night) lay it all on the line while physically overmatched and a decided underdog just made me feel extra good.

So, Let's Go Canes! and bring on the Penguins, Sidney Crosby, and Evgeni Malkin!

Some more Interesting Market News

2009-05-09T14:07:00.003-04:00

As I said, I was in the midst of preparing THIS post when the below situation arose. Anyway...the news does have some positive signs. Until I can get you April 2009 stats, I thought it would be good to provide an update since my last market data post.

Since April 19th, there have been 2,857 new listings in the Triangle, and 1,639 homes have gone under contract. That ratio of 1.7 to 1 means our inventory is still increasing - though at this time of year it's not unexpected. Like any business, inventory builds just in advance of the sales so that there is actually inventory on hand when Buyers come around.

In Wake County, the numbers are 1,510 new listings and 875 new sales - also 1.7 to 1. Interestingly, in Wake County, more new construction homes went under contract than got listed - I suppose a good reason for building permits to actually increase.

Something else to think about - and I'll comment Monday since the last two listings I've had both sold in less than 4 days ... 1 out of every 6 homes that sold were on the market less than 3 weeks. How is it that with everyone thinking the market is awful a lot of homes sell quickly?

A Rant

2009-05-09T13:09:00.002-04:00

Well...I was going to first post an update to market activity, but then while I was researching, something hit me like a ton of bricks...a house that some clients of mine have some strong interest in SOLD!

Now, generally that's good news - even if my clients didn't get it. And they say - the early bird catches the worm. What irks me is that I had explicitly asked the Listing Agent only 4 days before to keep me informed should an offer be received. And the house had already been on the market a month. Did my phone ring, or did I get an email? Of course not.

I could see this happening if the Listing Agent was actually also the Buyer's Agent. They'd have not only duties to their Seller, but also the Buyer. And so, if the Buyer brought at least a good offer, there might be a claim of duty/confidentiality there.

But in this case, another agent entirely represented the Buyer. That means the Listing Agent only represented the Seller, and should have ONLY had the Seller's best interest in mind. And what are the Seller's best interests in a nutshell? TO GET THE HIGHEST PRICE POSSIBLE. And how does a Listing Agent get the highest price possible? By doing everything they can to encourage competition (read: multiple offers) when there appears some competition exists - in this case, I told them we had interest.

Now, I may find out the Seller felt otherwise. Maybe the Agent had them set up to receive and view their feedback (which all of my clients can). And maybe the Seller told the Agent "I don't care if other people are interested, whoever brings me the first offer - that's who I'm dealing with."

Wouldn't you think if this were the case that Agent would have called me and told me that? Isn't that just one more way to keep your Seller's best interests as your primary objective? "Hey, Bo - I saw your feedback, thanks for showing. Just wanted you to know, I won't be able to let you know if I get another offer, because the Seller has told me 'whoever makes the first offer, I'll deal with them only first.' So, Bo if you want to make an offer, be the first!"

But in 11 years of doing this - a Seller has chosen that path maybe 3 times. Most Sellers, unless that's one helluva offer, have been reading their feedback and say "Well, Listing Agent, what about Bo? Have you let him know we got an offer and see if he'll submit one?"

Now, to look in the mirror, because nobody is ever completely blameless...

Maybe I need to be more insistent, even in these times where the market's a little soft, and where Buyers are in a mode of "I can take time, that house isn't going anywhere." Maybe I should be a little less understanding and more forceful - "No, it doesn't take a couple of weeks to decide; if you think you want it, decide in 2 days."

That's just never been my style - to apply what to me feels like pressure that takes a client out of their comfort zone of decision-making (unless of course obviously a house IS going to sell immediately). Maybe it's just more "modern day real estate" changes I need to make.

Got any thoughts? Let me know how you - as the consumer in the home-buying process - feel.

Blogging Ain't Easy!!!!

2009-05-07T12:14:00.003-04:00

I'm chagrined to see that I haven't posted since April 19th. Then again, my clients are paying me to help them buy or sell a home, not blog. Thus, the balance between "old school real estate" and "new school real estate" gets juggled. There's only so many hours in the day!

Throw in an awesome Indian Princess weekend April 24-26, and I just haven't MADE the time for any new posts.

But, take that actually as a good sign. I promise to post again before the week is out - but I have been busy - my last 2 listings both sold within the first 4 days (including that beauty on the left on Oberlin Road).

Spring Finally Arrives

2009-04-19T16:02:00.002-04:00

I spent the past several days showing homes to a very nice family who is moving to our area from Clemson, SC. While we did the research on homes leading up to the visit, several of the homes we wanted to see went under contract.

Then I noticed some of our appointments conflicted with other agents showing the homes. Also yesterday, I saw 2 long-time agents who rarely spend all day Saturday showing homes but sure enough, they were this time.

So, of course I had to do a little digging!

And showings ARE up. And sales ARE up, year-to-date.

Maybe spring HAS sprung. The weather has changed, daylight savings time has been adjusted to, we're past School Spring Break and Easter weekend. And long weeks of rain followed by beautiful weekends, or nice weeks with gawdawful rain on the weekend have ended.

Homes across all price ranges have shown twice as often in the last week as they have since March 1.

And pending sales - mostly created in April - stand at 1,951 homes. And that won't include any of this weekend's activity - including the offer I'll be writing Monday afternoon.

Total closings from January through March 31st were only 1,959 homes.

So, the last 20 days = the entire first quarter of the year.

It's a Dog's Life

2009-04-13T09:21:00.002-04:00

So Nancy was quick to let me know this morning that the Obama family had finally gotten their dog, and named it Bo. Har-de-har-har!!!!

Of course, I'm used to it. Bo isn't the most uncommon name for a dog. Same way Nancy crossed off a bunch of girls names that we (well, I) considered before she settled on Mary Margaret for our oldest daughter since she thought they sounded like dog names.

As it's spelled, "Bo" derives from "a nickname derived from Old Norse bua 'to live'" according to my quick google search which led me to http://www.behindthename.com/.

In the South, Beau (short for Beauregard, which I've been called many times) is common. Behind The Name says "Means "beautiful" in French. It has been occasionally used as an American given name since the late 19th century." I guess some Southerners back in the day wanted to act all fancy and uppity.

But for those that know me well, my real name is Robert ("bright fame"). Robert Jr., that is. And as the legend goes - according to my parents and it better be true because I've repeated it many times! - when it came time to give me a nickname, they didn't want to call me Bob like my Dad. Or Bobby. Or Rob or Robby. My Dad suggested "Dude".

I was born in 1966. Now, my parents were typical middle class. My dad went to Duke via the Navy ROTC. They were not hippies, which the suggestion of "Dude" or "Moonbeam" might have suggested.

For a brief period of 2 years when I was a preteen, I switched to Rob, being tired of the name Bo. To this day, some of my then-classmates from Durham Academy call me Rob on the rare occasion that I see them.

While I'm at this name thing, I guess it's most important to talk about the "Bo Bromhal" connection - or, properly spelled for historical context "Beau Brummell". At least once a month, I get "IS that REALLY your name?"

I'm told - and Google confirms it - that the original Beau Brummell was quite the eligible bachelor and man about London. Men all over the world thank him for popularizing long pants instead of knickers, but curse him for the necktie. Most people who ask about my name are referring to him.

But also, in the mid-60's, after The Beatles took over America, there apparently was an explosion of copycat British rock and roll groups. And one of them was named The Beau Brummells. So I have to assume my parents, not the greatest history students around, didn't know anything about the fancy dresser but instead chose Bo because of some rock and roll group.

I guess I could have been named Ringo.

Cuegrass Festival at the Pit this Saturday

2009-04-02T16:33:00.003-04:00

Depending on where you get your local community events news, you may not be aware, but...

this Saturday April 4th, Ed Mitchell and The Pit will play host to a Cuegrass Festival .

Being the good North Carolina boy I try to be, the Pit is on the list of places I like to eat. The Country Ribs are outstanding - much better in my opinion than the babybacks!

Yes, Cooper's is still a downtown institution and just as good in a different way - mostly for a quick meal with "unique atmosphere".

In addition to the excellent pig to dine on, there will be live music and small art pigs for the children to decorate. The event runs from 11 am - 4 pm.

High-end ITB Market Heating up?

2009-03-27T10:13:00.002-04:00

A few recent BIG sales have caught my eye as some signs that life has returned to the higher-end of the market ($900K+) Inside the Beltline.

In the last 60 days, 13 homes have sold or are under contract. 2 of them have been over $3 million! With 81 homes for sale over $900K, the rate seems finally under a year to sell.

Of the 4 sales, 2 have been at a discount - 83% & 89% of list price - and 2 have been at "normal" ranges of 98% of list price or more.

One interesting phenomenon is the appearance of multiple offers on homes that have been on the market for many months. But as one Buyer told me - a lot of Buyers are waiting to see if prices drop further and have been gun-shy about buying. Inevitably, someone steps up and puts in an offer, and then other Buyers come off the sidelines or out of the shadows.

I've shown how stable our market has been compared to the rest of the nation. The Buyers getting the discounts to list price are the Buyers that go ahead and act, rather than wait for someone else to "pull the trigger" first.

Forbes Says Raleigh #1 & Durham #3

2009-03-27T10:00:00.003-04:00

Forbes Magazine Just released it's annual Best Places for Business & Careers list.

Raleigh adds another distinction to a long list of accolades topping the rankings at #1. Forbes had this to say:

Leading the way is Raleigh, N.C., which grabbed the top spot for a third
straight year on the strength of strong job growth (both past and projected),
low business costs and a highly educated workforce.
Keeping Raleigh company at the top are fellow Tar Heel State metros Durham (ranked third), Asheville (sixth), Wilmington (13th), Winston-Salem (18th) and Charlotte (19th).

Inside the Beltline Sales

2009-03-19T11:46:00.004-04:00

Because so many people ask me about Inside the Beltline activity, I've broken it down for you (all stats from Triangle MLS):

Through 2/28/09:

Total sales: 66
Average $: $393,500
Price/Sqft: $211
Avg Days on Market: 108

Through 2/29/08:

Total Sales: 99
Average $: $427,656
Price/Sqft: $191
Avg Days on Market: 93

In a nutshell - unit sales are way down - 33% down. The average price (see below, and see prior blog post) is down ~8%. Days on market - up 2 weeks.

But...

The all-important price per square foot is UP 10%. And isn't that how we so often price and sell homes ITB? Unfortunately, it's not all good news, as I'll show below.

What I've shown you above is just the TOTAL. It's really more appropriate to break down between single-family homes and condos/townhouses. So here goes:

2009:

Single Family: 38 sales; $429,350 avg price; $183/sqft; 99 DOM
CND/TH: 28 sales; $344,850 avg price; $250/sqft; 119 DOM

2008:

Single Family: 72 sales; 506,235 avg price; $192/sqft; 85 DOM
CND/TH: 27 sales; $218,114 avg price; $189/sqft; 113 DOM

Again, it's relevant to take Twin Oaks out of our figures, so, 2008 is adjusted as follows:

Total Avg Price: $381,000
Avg Price/Sqft: $188
Avg DOM: 93

Single Family Avg price: $442,942
Avg Price/sqft: $192
Avg DOM: 86

Here's what it means:

Condo/townhouse activity (think RBC Plaza, 222 Glenwood, West closings) at $250/sqft has really raised the 2009 average.
Prices on CND/TH rose from $189 to $250/sqft - making this obvious.
So that 10% I spoke of above really isn't so.
The average sales price is down 3%
The average single family price/sqft has dropped from $188 to $183 - 2.7%
Days on market still up for single family, and still by 2 weeks.

Now, I'd have to look at each sale and takes pages upon pages to explain each one - but the message isn't as simple OR as gloomy as is getting reported:

With both average sales price AND price/square foot down ~ 3%, I'll say it - VALUES ARE DOWN - just not the 8% the N&O reports.
It definitely is taking a little longer to sell homes.

ITB Home Prices UP in 2009!!

2009-03-17T11:53:00.004-04:00

or...

When is a Drop not a Drop?

The N&O article I linked included this statement:

The average price of an inside-the-Beltline Raleigh home dropped 7.5 percent in
February.

Wow. One month, and a 7% drop in the value of your home - panic!

Or don't. What the author is inferring is that the average sales price of ALL area 1 homes that sold in February 2009 was below the average of all sales in February 2008.

So why not panic? For better or for worse, a home is not a pound of oranges or apples, or a gallon of milk. It's not a commodity, where the price year-over-year can be easily determined. Unless a specific house sells today, gets lived in without any improvements, and sells 1 year later. Now, if the house sells today and again in 3 years (again, without making any changes), then you can figure out the 3 year average, based on the sales price.

But you cannot tell me the value of any home has gone up OR down based solely on an average sales price during a limited period.

I'll go through all the numbers for ITB in a separate post, but let me show you such a simple example why this is so.

In February 2008, 1624 Oberlin Road (one of the Twin Oaks homes) sold for $5 million. The most expensive home ever sold in the Triangle MLS.

This one sale had a $50,000 (99 sales) upward effect on the 2008 average price - $427,656.

So, when the average price of all sales dropped to $393,500, it looks like a 7.9% drop.

Without that ONE SALE, 2008's average would have been only $377,656.

And 2009 would actually be a 4.2% increase.

February Sales Figures are out!

2009-03-14T18:15:00.003-04:00

So, after a long rainy workday I arrived home for Nancy to tell me "There was a GOOD article in the paper today".

The N&O's article reported Patience Paying off for Home Buyers in conjunction with releasing the MLS statistics for February 2009.

I'll make a separate post to discuss those statistics, but first the article struck me for being "positive", as well as reminded me of this interesting activity overnight Thursday - Friday...

I pull a "Hot Sheet" every day at least, sometimes several times a day (kind of like checking Perez Hilton, I'm told). I don't remember the exact times I had last looked and then looked, but I did note some positive activity for Buyers AND Sellers when I did!

12 homes went under contract. Now, 12 homes a day won't change the world, but having remembered a few of the homes when they appeared For Sale, I was curious - because they seemed like good prices and they had sold quickly.

4 of the homes sold within 2 weeks of being listed. The other 8 had sold either within 30 days of being listed, or within 30 after a significant price correction.

The long and short of that small 12 home subset?

Priced right in the Buyers' eyes - homes ARE selling.

ACC Tournament in Full Swing

2009-03-14T14:53:00.002-04:00

If you're new to the Triangle or just watching what is going on, this weekend is an unusual phenomenon known as the ACC Tournament. For one weekend, beginning Friday at noon, the entire area seems to shut down - except for the sports bars!

I can remember growing up in the late 70's and early 80's when literally, the teachers would wheel TV sets into the classroom, get the rabbit ears working, and we'd watch the basketball the rest of that Friday afternoon.

Growing up in Durham, I was part of a Duke family - my mother and father, aunts and uncles and grandparents ALL went to Duke. And being 10 miles from Chapel Hill, we lived around, I went to school with, and we socialized with some fine people from Carolina.

When it came time to choose a college - I had been raised to hate UNC-CH...and I just couldn't bring myself to go there. Instead, I decided to attend public college at NC State (just ranked the #6 value for 2009 by USA Today by the way!).

And so my love for ACC basketball continued. When I was growing up, the ACC Tournament was everything - win it, be THE champion, and go on to the NCAA's. Losing any day was a heart-breaking experience meaning no tournament for your team.

Unfortunately, NC State's last ACC title was in 1987 ... you read that right - 22 years ago now. And it won't be this year, as my beloved Wolfpack couldn't make it out of the new Thursday first round against Maryland.

So today, as traditional powers Carolina and Duke face off against upstart Florida State and surging Maryland, respectively, I take a break from the excitement to blog and add to my website.

I'd rather be getting nervous for the 3:45 game 2 tip and then tomorrow's championship game.

So, if you've still got a dog in this fight - good luck to your team! Even if it's Carolina, who because of my love for my wife I'm forced to not hate anymore!

Congratulations to my fellow Agents!

2009-03-10T16:15:00.003-04:00

The Prudential awards for 2008 are out, and I'm proud to say I work with 12 other agents at the Cameron Village office who were recognized for their success last year! 13 out of 40 agents is a great ratio, and speaks to the experience and achievement of just our office of PruYSU.

I was very fortunate to be named to the President's Circle, which less than 3% of agents achieve. Joining me at that level were Ed Willer & Montie Smith. Jewell Parker and Mary Biathrow of course outdid us men and achieved Chairman's Circle!

Even More Good News - from ceosforcities.org

2009-03-06T11:03:00.003-05:00

As I sit here writing yet another "good news" post, I began to wonder....

Can you have too much good news? Am I being a Pollyanna about the near-term prospects for our area economically and thus home sales? But then I'm reminded - the daily paper doesn't seem to cover the good news, and not everybody gets (or knows where to get) fuller coverage of what's going on.

So here goes. I was catching up on my Triangle Business Journal, and from a January editorial, a chart caught my eye because Raleigh/Durham (our MSA) was listed near the top. Unfortunately, the chart is not in the link, so I'll have to summarize, from the editorial:

What, however, is extremely encouraging is the fact that Raleigh-Durham currently is ahead of other metros by light years when it comes to ‘knowledge-base” workers.

A compilation of metrics by the nonprofit CEO for Cities, a Chicago think tank ... shows the RDU area consistently performing well when it comes to talent, innovation and diversity.

“We see a very strong correlation between the percentage of college graduates and the growth in an area’s per capita income,” says Carol Coletta, president and CEO of the Chicago group.

The editorial had two charts:

1. For percentage of workers with a college degree and employed in the private sector, excluding health care and education, Raleigh/Durham was 2nd in the nation at 39%, behind only San Francisco at 43%.

2. For percentage of workers employed in "knowledge-based" fields, Raleigh/Durham was again 2nd at 12.8%, only slightly behind San Francisco at 13.2%.

When I looked at the ceosforcities.org study , there's even more "good" news:

#1 in population over age 25 with a college degree - 41%

#1 in percentage of the population that are age 25 to 34 with at least a college degree - 7.9%

#6 in patents issued per 1000 population

#5 in venture capital raised per 1000 population

#20 in percentage of the population who are self-employed (hmmm, sounds familiar)

#23 in small businesses per 1000 population

#5 in community involvement

#14 in economic integration of our households across the geographic area

#3 in number of foreign students enrolled in higher education per 1000 population

#12 in WiFi access

United Van Lines tells us some Good News!

2009-03-06T10:35:00.003-05:00

The story is a little bit dated (January) but I just saw it again and thought it was worth sharing. Every year, United Van Lines does a migration study, saying whether people are moving into or out of a state. The 2008 study says NC was #3. In 2008, 58.2% of the company's NC moves were inbound - folks moving to our state.

Looking behind the numbers some, NC was #3 in total inbound movers. And the net in-migration was over 2,400 shipments. And that's just for 1 moving company.

In 2007, NC was #1 at 61.6% inbound moves.

So what does it mean?

Well, I'm sure some news outlets would trumpet "inbound moves down!" - but what matters is simple - more people are moving to our state than moving away. And so a net growth in population requires housing - a place to live. Whether that is a rental or they will be buying, either way - it's GOOD NEWS!

"How is the Market?"

2009-03-03T11:48:00.003-05:00

If I had $1 for every time I've heard that - especially now - I would barely need to help folks buy and sell a home!

But "how's the market" really hit home for me on Sunday when I was holding an Open House in the cold rain and a few hardy souls came to visit. 2 separate couples, possibly in the market to buy (heck, one sitting in a rental just waiting), were of the belief that our market had a long way to go....down.

Could it be? Of course! We are indeed in uncharted waters - not just according to me and my 11 years as a Realtor, but so say agents I know with 25 or more years in the business. And as they say - if you know what's going to happen, let's go to Las Vegas and place a wager on it so we can make a fortune.

But all these pithy comments don't help answer the question. What helps answer the question is working hard to get behind and then understand the data, as well as listening to what Buyers think and how they formed their opinion.

At the end of the day, it's not the numbers - it's people that buy homes.

So let me start digging into the data and combine it with what I'm hearing and let you know here over the next several posts.

We're the Red & White from State....

2009-02-26T19:03:00.003-05:00

I am suddenly reminded I may or may not make an extra blog post about real estate tonight.

The Wolfpack plays fellow Big Four member, Wake Forest. The Pack prevailed just 2 weeks ago by shutting down Jeff Teague at the RBC. Wake Forest is a great team at home - I guess if nothing else they are used to those gaud-ino tie-dyed shirts.

If The Pack wins, maybe I'll tell you all about meeting Dino and his gracious wife completely unexpectedly to them this summer in the Cayman Islands.
Go Pack!

Triangle-specific Real Estate Results

2009-02-26T12:04:00.005-05:00

In my post last night, I promised more discussion of the information specifically available for NC and especially the Triangle. I will either edit this post, or make a new post, based on information in the local TARR Report, which is the best statistical analysis of our market only out there.

Quickly - on NC. using that Case-Shiller index (linked before) - Charlotte now stands at a factor of 123 and remember that 100 was the baseline from 2000. So in 8 years, appreciation averaged roughly 3%. But think about the growth in Charlotte during this decade. Certainly it has averaged more than 3%, no? So Charlotte's prices have actually grown slower than they could have - meaning the supply of new homes has kept up with its growth.

Charlotte peaked at 134 in August 2007. Again, not insane appreciation (less than 5% annually). This is why when we see national magazines, we hear of Charlotte being "undervalued". Now, what effect the bank mess (especially Wachovia) will have, again, who knows.

Now to what we care about most - the Triangle. As I said, Raleigh-Cary prices grew almost 3% according to a government report during 2008; Durham-Chapel Hill prices grew just under 2%.

That growth put Raleigh as #18 in the country for annual growth. What? We actually saw statistical appreciation but were only 18th? Three markets - Decatur AL, Monroe LA, and Tri--Cities TN/VA - had appreciation over 6%.

Best of all - Raleigh-Cary's 5 year appreciation was "only" 27.6%. That's a little over 5%, and shows that appreciation never ran wild. What's really nice is this covers both the boom and "bust" years nationally. Why, Las Vegas had boomed all the way in Case-Shiller to to a 236 in 2006 - that is 25% annually. So when you see the "bust" all the way back down to 131, only slightly less total than the Triangle, it doesn't seem so bad for the casino crowd. However, we did beat their socks off - 5 years ago, Vegas was "only" a 143. So they have actually had negative 5 year sales prices.

Durham-Chapel Hill? Similar 5 year results. For 2008, their growth put them 28th nationally. The 5 year average of 25.65% is a little behind Raleigh but still welcomed.

Now, pardon my transgressing again. But I have to wonder...why is it the local paper really wants so tell us all the negative aspects? I'm not saying our market is as strong today as it was in 2006 or even parts of 2007. But rather than concentrate on sometimes staggering monthly numbers, let's take a big picture view.

For example - what would be the value of touting an approximate 10% increase in average sale price from January 08 to June 08? This is when we expect this to happen - at the end of the spring market. Similarly, why be singularly concerned when that sales price dips by 10% from June to December? This is the natural seasonal activity in our market.

Yesterday was a very busy day for real estate statistical news. Hopefully, I'll catch up more tonight. if you want to look yourself, just Google "NAR January 2009 Home Sales" or "AP/ReMax Housing Report". Find something you want an expert opinion on - leave me a comment and I'll do my best to address it!

"Homes Sell at Discount"...

2009-02-25T22:51:00.007-05:00

blares the News & Observer headline in today's business section, a recap of an AP article regarding the release of December 2008 figures for the Case-Shiller Index. "Record price drop" and "Home prices Fall" say the sub-headlines. Of the local paper.

And then, separately right in the middle - "Triangle Prices Up". Could it be? Really? Well, the Case-Shiller only measures 20 metropolitan statistical areas (MSA's) - Charlotte makes the cut, the Triangle does not - but more about that in a moment.

The Triangle information comes from the Federal Housing Finance Agency's 4th Qtr 2008 report. The Raleigh-Cary region was up right at 3%, and Durham-Chapel Hill up just over 2%. That's what we care about the most, right?

Now, there are plenty of other issues with the local paper. But why wouldn't they make the headline, to be read by their local readers, more indicative of the local market? Anyway...

The Case-Shiller Index, as I said, compiles information from 20 MSA's, and then comes up with a national figure. Now, while it's good for "informational purposes only" - in general a "product" like a home can't be so neatly compared to other homes. A paper clip? A box of cereal? Even a pound of hamburger? A Ford sedan? Sure - because they are essentially the exact same product year after year after year. But how many times in a single quarter, a single year, even 3 years does a house resell?

The neat thing I just learned about Case Shiller is - they call the year 2000 = 100 on their index. Above 100 --> good thing. So, of course home prices made the index go above 100 over the years. As of 12/2008, the national index average was 151. Basically, that's 50% appreciation in 8 years, or just over 6% a year. (Yes, compounders, I know it's not really over 6%).

And that's AFTER the 18.5% drop from 2007!?! And a 9% drop in 2007!

The problem here is the national market and crazy appreciation. Why, that 50% total appreciation was first hit in 2003 - meaning just 3 years, almost 17% a year! The absolute high point was July '06 - ah, I remember it well that summer! - at 206.5, again basically 17% a year on average since 2000. That's unsustainable unless incomes also grow that fast.

But there is good news for us here locally, and for NC even, based on the Charlotte figures. More on that tomorrow!

Brave New World

2009-02-23T15:16:00.004-05:00

An incredibly kind, warm, and capable young lady was kind enough to not only agree to help me in my business, but also to teach me how to enter the 21st Century of life in this Internet-connected world.

We've already taken the domain names I own - like http://www.bobromhal.com/ and redirected them to my website.

Soon enough - I'll quit telling you things you've known for years and are laughing at me for - and instead I'll be talking life in the Triangle - especially real estate, because that is after all what I do best.