I recently wrote this post in response to yet another newspaper trying to help their circulation with a "Real Estate Bubble" article.
I thought a shortened version is worth repeating. The full version can be found at my Coastal NC Blog.
I pose the question of "Do you buy stocks based on editorials in the newspaper?," because Sunday, a local newspaper published an editorial entitled "The real estate bubble."
I am a newcomer to the area so I have no axe to grind with the paper. I have become a relatively faithful reader of their paper.
I have spent the last nine months studying real estate intensively. On top of that, I have bought one house myself, sold another and helped my kids buy two other homes in very different markets over the last five years. I have lived through a so-called "real estate bubble implosion." We owned a home in Halifax, NS in the late eighties when the off shore oil boom collapsed. We ended up losing about 25% of our investment because the market became flooded with homes that the oil companies were trying to unload for whatever prices that they could get. We carried the payments for the Halifax house with us when we moved to Columbia, Md. We sold our Columbia home less than twenty two months later before we moved to Roanoke, Va. It sold in six days. We actually gained back everything we lost on the Halifax home when we sold our Columbia home.
In the fall of 2004 we sold my mother's house in Mount Airy, NC. Our family had been living on that plot of ground since around the turn of the century. Much of the woodwork including doors in the house is solid walnut. It was one of the first houses in Surry County to have electrical breakers instead of fuses. It even has a tile roof and solid copper gutters. The house also has a huge formal garden which was one of the reasons we had to sell the place. We just could not devote the time that was needed to keep the house in the shape that it deserved. We ended up selling the house for less than we wanted, but it is now a wonderful bed and breakfast and is called the Sobotta Manor.
At the same time we were selling the Mount Airy house which stayed on the market for over two years, we were striking out in finding a house on the water that we could afford somewhere along the Crystal Coast of the Southern Outer Banks.
The point of this tale is that generalizations do not mean much in the real estate market. Anyone who has spent much time in this area knows that there are widely different housing markets across the county.
The market that we face here is far different than the market that I faced in the late eighties in Halifax, NS. There are no oil companies here unloading homes for whatever they could get for them. I seriously doubt we will see something similar to the Halifax market correction since most people living on the Crystal Coast are not in a corner and being forced to sell their properties. In fact we have a number of properties where the pricing is relatively inelastic. The owners will sell them, but only if they get something near what they want for the property. They are trying to maximize their profits and are willing to wait.
It has been widely reported in newspapers recently that North Carolina is one of the top destinations for retirees. That hasn't changed. It will help our market remain stable.
Most people coming here, myself included, find the tax rates, even the new ones, much less than what they are accustomed to paying. Our property taxes are about 20% of what they were on a similarly priced home in Roanoke, Va. People from Northern Virginia and other urban states have been paying even higher than what we pay in Roanoke.
We bought our home relatively close to the top of the real estate boom. Still we had looked for three summers before finding this house which ended up having almost everything we wanted.
I have looked at a lot of property in Carteret County since becoming a Realtor® with Bluewater GMAC Real Estate, I still have not seen a property that was a better value or where I would rather live. When I factor in the amenities of the Bluewater Cove subdivision, the growing services available within five miles, and the proximity to the Emerald Isle beaches plus the access to the Atlantic Intercoastal Waterway, I am confident that we made a good investment.
To close I would say, talk to a Realtor® if you want or need to sell your property. Don't base your decision solely on what you read in the newspapers. Real estate is one of the most locally sensitive and personal commodities in the world. Realtors® spend all their time figuring out how to get you the most money for your home if they represent you as a seller. If you hire them as a buyer's agent they spend all their time trying to get your a great deal. One of the key factors in the real estate market is that it only takes one person to buy your home. When we sold our farm in New Brunswick, a lady from Singapore bought it and turned it into the Tay Ridge Farms bed and breakfast.
If you are waiting to buy because you believe there will be fire sale prices on homes in Carteret County, I think you will have a long wait. There are far too many people wanting to buy houses here for the bottom to drop out of the market. It is also important to remember that many of the buyers are not coming from around the corner. Some come and find our prices reasonable because they haven't been able to find the mix of amenities, quality housing, and water access to satisfy their needs . They have looked elsewhere and come up empty handed like we did.
Last summer there was even a NY Times article, "North to Canada, for an Ocean View," about people looking as far north as Prince Edward Island for beach front property. Let me say this clearly. While I love PEI, the weather in Prince Edward Island in July is about like our March weather except the water is colder along their beaches. Most folks will find that the Southern Outer Banks are a better value than Prince Edward Island unless they place a lot of value on property where you can also ice skate and shovel snow in the winter.
Remember the real estate advice you get from the newspaper might be worth the whole fifty cents that it cost you.
In the end newspapers care about selling newspapers.
Our real estate market like all others is what the buyers and sellers make it, not what the newspaper declares it. Invite someone to the beach this summer. We're still the best kept secret on the East Coast.