Let's Get Real About Real Estate - Up, Down, Balanced, Confused?

By
Real Estate Broker/Owner with RED Properties NC #129285
https://activerain.com/droplet/YK2

It would be a complete understatement to say that most of the country was and is relieved that the Real Estate Market turned around this year.  But just how much did it turn around and how long will this last?

Several factors right now are brewing and mixing together setting us up for a strange next few months:

  • Interest Rates - First of all, interest rates have started to inch up.  While, yes, they are still historically low what needs to be understood is that as they inch up a large portion of the buyer pool goes away.  What a buyer could afford at a 3.5% interest rate may very not be reasonable to that same buyer at a 4.5% interest rate.  For instance, did you know that for every .5% the interest rate increases on a $300,000.00 home purchase there is anRED Properties RaleighRed increase of approximately $100.00 per month in a mortgage payment?  While they may not seem like much it affects a huge number of potential home buyers.  The average sales price for the month of June in the Raleigh NC area was $264,500.  So, yes, this is an important factor to keep in mind.
  • Sales Have Decreased - Sales have slipped in June.  While that is typical trend during the summer months it isn't favorable with the increase in interest rates.  As sales slip and interest rates increase the days that a home stays on the market (DOM) will potentially increase.  As the DOM increases the likelihood of price adjustments starts to materialize.  Currently the average DOM in the Raleigh NC area is 90 days. 
  • Shadow Inventory and Increase in Average Sales Price - The average sales price has increased.  That should be a good thing, right?  Not so fast.  There is an ENORMOUS shadow inventory at the moment being held by the banks just waiting to be released.  Once those homes start being released there will be a shift in the market.  Why are banks holding the properties?  They, too, are waiting for market improvement.  Why release a home into general inventory for sale at the current conditions when they can wait a bit longer and ask a higher price?  Remember, banks aren't like normal sellers - they don't have to sell which means they can sit on the inventory for quite a long period of time.  I have known of homes that have been foreclosed by the bank and they were not introduced back into the marketplace for sale for 4 years.  It happens, and it happen a lot!  An increase in the average sales price ALSO knocks out a portion of the buyer pool.
  • Current Inventory Tight - The current inventory of homes for sale in the Raleigh NC area is tight.  And, if the trend since the beginning of the year continues it will tighten up even more.  While many sellers may think that since there are less homes on the market that it is a "sellers market", today's real estate environment doesn't necessarily align with that premise.  With less homes on the market for buyers to choose from price then becomes the most attractive incentive to buyers.  It has and always will be important to price property appropriately but now more than ever if you want to sell your home it must be priced right. 

With all of the current factors in the Raleigh Real Estate Market swirling around it is still a bit bumpy and the outlook is unclear.  If your home is currently For Sale and you receive a contract you simply must take all of the above factors into consideration when making your decision to accept the offer or how you want to counter the offer.  EVERY offer right now needs to be taken seriously, dissected and transformed into a mutually beneficial deal for both buyers and sellers.

Here are links for the latest Real Estate Market Statistics for both North Raleigh NC and Wake Forest NC.  Please keep in mind when reviewing them that you will see favorable increases when compared with the same time last year.  I think every part of the country is seeing that.  What is critical now is what is happening this year.

Wake Forest NC Real Estate Market Report - June 2013

North Raleigh NC Real Estate Market Report - June 2013

Here is an infograph for ALL of the Wake County area.

RaleighRed RED Properties Real Estate Market Statistics

 

If you are currently thinking of selling your home I would love the opportunity to speak with you, explain the current market conditions more in-depth and guide your through the home selling process.  If you would like more information regarding RED Properties please feel free to visit my website

Posted by
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RED Properties RaleighRed

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Rainmaker
635,293
Leesa Finley
RED Properties - Wake Forest, NC
RED Properties - Raleigh NC Real Estate

LOL, Myrl!  I think my crystal ball rolled under a table somewhere a few years ago!!!

Jul 25, 2013 03:42 AM #58
Rainmaker
635,293
Leesa Finley
RED Properties - Wake Forest, NC
RED Properties - Raleigh NC Real Estate

Hi David!  I greatly appreciate you stopping by and "getting" my post.  There are so many factors, past, present and future that play into the market.  We in good times right now in the Raleigh area - I just question how stable it is.

Jul 25, 2013 03:43 AM #59
Rainmaker
635,293
Leesa Finley
RED Properties - Wake Forest, NC
RED Properties - Raleigh NC Real Estate

Same here, Norman.  It is unfortunate to have buyers that a few months ago thought the real estate world was their oyster only to have to start rethinking what they want and what they can afford.

Jul 25, 2013 03:44 AM #60
Rainmaker
635,293
Leesa Finley
RED Properties - Wake Forest, NC
RED Properties - Raleigh NC Real Estate

Thanks so much Gita!  Our inventory is definitely getting tighter.

Jul 25, 2013 03:45 AM #61
Rainmaker
635,293
Leesa Finley
RED Properties - Wake Forest, NC
RED Properties - Raleigh NC Real Estate

Mums the word, Jared!  ;)

Jul 25, 2013 03:45 AM #62
Rainmaker
635,293
Leesa Finley
RED Properties - Wake Forest, NC
RED Properties - Raleigh NC Real Estate

Thanks, Jackie!  I would just like to see a little more consistency in the market here.  I know, I know - I ask too much!  ;)

Jul 25, 2013 03:46 AM #63
Rainmaker
635,293
Leesa Finley
RED Properties - Wake Forest, NC
RED Properties - Raleigh NC Real Estate

Great advice for any agent, Andrew!  My sails are adjusted appropriately - just letting consumers know with this post.

Jul 25, 2013 03:47 AM #64
Rainmaker
635,293
Leesa Finley
RED Properties - Wake Forest, NC
RED Properties - Raleigh NC Real Estate

Hey there, Chuck!  Yes, things here are doing well also.  I hope the interest rates hold steady for just a little longer.

Jul 25, 2013 03:48 AM #65
Rainmaker
635,293
Leesa Finley
RED Properties - Wake Forest, NC
RED Properties - Raleigh NC Real Estate

Thanks, Jill!  I greatly appreciate your comment!

Jul 25, 2013 03:48 AM #66
Rainmaker
635,293
Leesa Finley
RED Properties - Wake Forest, NC
RED Properties - Raleigh NC Real Estate

Well, thank you very much, Jeremy!

Jul 25, 2013 03:49 AM #67
Rainmaker
635,293
Leesa Finley
RED Properties - Wake Forest, NC
RED Properties - Raleigh NC Real Estate

Hi, Gretchen!  Yes, well over 20+ years here as well.  We certainly have seen alot, haven't we?  The media?  Talk about a hodge podge of MISinformation!

Jul 25, 2013 03:50 AM #68
Rainmaker
635,293
Leesa Finley
RED Properties - Wake Forest, NC
RED Properties - Raleigh NC Real Estate

Yes, Frank, absolutely real estate is UP everywhere in the country when compared with the last 5 years.  I just caution buyers and seller regarding the stability of the trend.

Jul 25, 2013 03:51 AM #69
Rainmaker
635,293
Leesa Finley
RED Properties - Wake Forest, NC
RED Properties - Raleigh NC Real Estate

John - I don't think I indicated that the Raleigh market was in peril.  We are having a great first half of the year.  My only point with this post for consumers was to caution them that there is a mix of factors out there than play into the whole stability of the trend.

Jul 25, 2013 03:53 AM #70
Rainmaker
635,293
Leesa Finley
RED Properties - Wake Forest, NC
RED Properties - Raleigh NC Real Estate

"Get off your asset" - LOL I LOVE it, Kevin!

Jul 25, 2013 03:54 AM #71
Rainmaker
635,293
Leesa Finley
RED Properties - Wake Forest, NC
RED Properties - Raleigh NC Real Estate

Hi Karen and thank you SO much!

Jul 25, 2013 03:55 AM #72
Rainmaker
635,293
Leesa Finley
RED Properties - Wake Forest, NC
RED Properties - Raleigh NC Real Estate

Hey there, Mitch and thanks for stopping by.  It sounds like the Charlotte area doesn't have any surprises looming with regards to "shadow inventory" - that's fantastic for you!  Unfortunately, in this area I can drive through many neighborhoods and see every other house foreclosed yet not available for sale and many of them have been vacant for a year or more.

Jul 28, 2013 10:34 PM #73
Rainmaker
635,293
Leesa Finley
RED Properties - Wake Forest, NC
RED Properties - Raleigh NC Real Estate

Thanks, Ymeki!  It always comes down to pricing, doesn't it?

Jul 28, 2013 10:36 PM #74
Rainmaker
635,293
Leesa Finley
RED Properties - Wake Forest, NC
RED Properties - Raleigh NC Real Estate

Thanks for stopping by, Marte!  I appreciate it.

Jul 28, 2013 10:37 PM #75
Rainmaker
635,293
Leesa Finley
RED Properties - Wake Forest, NC
RED Properties - Raleigh NC Real Estate

Interesting, Don, I don't think any of the information provided was "negative".  Not sure how you got that from this post.  Hope you had a good nap!

Jul 28, 2013 10:38 PM #76
Rainmaker
1,496,212
Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • Green • GRI • HAFA • PSC Calabasas CA

I like the inforgraphic your company presented. One question: how do you define top neighborhoods? By sale price, the most popular, or something else?

Dec 05, 2014 06:50 PM #77
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635,293

Leesa Finley

RED Properties - Raleigh NC Real Estate
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