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Raleigh Market Vent

By Scott Hoyt

Real Estate Broker/Owner with Founding Partner, ChangingStreets.com

July 01, 2008 06:17 AM

The current real estate market in Raleigh is a mystery. Raleigh is a city with outstanding fundamentals, meaning the job growth, affordability, recent appreciation and inward migration figures are all outstanding, why is the market feeling very "midwest" right now?

Raleigh and suburbs, Apex, Cary, Holly Springs and the nearby cities of Durham and Chapel Hill are highly ranked in every "Where To Live" or "Best Place to..." list from creative to tech, from retirement to college grads, 15% of the license plates are from somewhere else, and as beautiful as it is, greater Raleigh is not a huge vacation destination for people from Mass, New Jersey or Ohio!

So what gives? Sympathy pains?

I know the banks have been hard on local developers and builders, which seems odd to me. Sure we know there will be a slow down but I really don't see a huge collateral risk. The fundamentals are too strong.

The consensus among agents and builders I have spoke with is that the people seem intimidated by the mortgage process and homes not selling elsewhere has our market bottle necked. What will be the difference maker? The election? Weather Change? Who knows the one thing for sure is that the housing market will change here.

Latest unemployment reports show Raleigh at less than 5%, job growth slowing but still positive and there are only 242 foreclosures on the market in the Greater Raleigh area. Fantastic.

There is still mortgage money in the marketplace, although it is true that money is tougher to come by than it was a year ago, there are still some great programs available.

We have seen Wells Fargo be especially agressive in the market place the last couple of months.

We will sit and wait, the good news is we are waiting for a sure thing.

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Anonymous

Josef

Dude, the market here is being OVER-DEVELOPED, way over-developed.There are new subdivisions going up on every piece of vacant land and the houses are huge! Why should anyone be in a hurry to buy when there is such a glut of empty houses. It is not the mortgage process, that's ridiculous. People will always, and I mean always, wait for a bargain. If you want to help this market then stop the asinine over building that is going on. Couple that with the non-stop attention to the water situation. How can the existing infrastructure support all these new families? Where is the water going to come from?

By the way, ever think that those out of state plates are people visiting their kids at college or registering them for the new semester?

Jul 01, 2008 12:51 PM

Scott Hoyt

Founding Partner, ChangingStreets.com - Cary, NC

Thanks for the comment, it does seem "way over-developed" but Wake County is one of the few growing counties in the country where building permits have lagged behind inward migration of people over 18 and job creation. So based on traditional metrics this is not an issue, if we are seeing a huge paradigm shift as it pertains to housing, we have much bigger problems.

So if we assume the traditional metrics hold true there is a pent up demand for those homes, the question is: when will those people enter the market. The glut of empty houses in Wake county is nothing compared to the rest of the country and barely measures here, I wiill look into it, but I would bet there are the same number of "empty" houses on the market today as last year, just fewer new builds that meet that criteria.

There are some areas that have developed infront of infrastucture specifically 540 that could be in big trouble do to gas prices and the long commute to the employment centers.

Too many of the out of state plates are on mini-vans with child seats cruising Garner, New Cary, and Wake Forest, not where one would find college parents.

You bring up a great points the houses are huge and the infrastructure in many of the areas of development is weak. It is a well know fact that there is hunger for sustainable housing yet the builders and developlers keep building product that is does not meet this need or the needs of the community.

The only reason the media keeps brining up the water here is because there is nothing else to talk about.

I keep waiting for the anchors on the local news to talk about what they had for lunch, lucky for them gas is expensive, gives them something to talk about.

Thanks again.

Jul 01, 2008 01:34 PM

Raleigh Market Vent

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