Each month, the Triangle MLS reports statistics on the Raleigh real estate market and the surrounding areas as well. I thought I’d write a quick post summarizing what December (and 2009) looks like vs the previous year. Most of you will not be interested in this, but for stats geeks like myself, you might find it interesting. If nothing else, it will give you reassurance that the Raleigh real estate market is slowly improving, and the trends show that although it has been a tough year, it certainly has not been nearly as bad as other markets around the nation.

In 2009, we saw 21,983 closed sales, an 11.5% decrease from 2008. However, we also saw a larger decrease (-15.6%) in the number of new listings that came on the market in 2009. What this means is that the inventory level, or supply of homes on the market has decreased to 8.6 months. This means that it would take just over 8 months to sell the current listings if no new listings came onto the market. The 8.6 inventory number is supposed to give us a way to determine the supply and demand levels that currently exist in our market.  There are particular places such as the downtown Raleigh real estate market, and parts of the North Raleigh real estate market that have seen a more dramatic reduction in supply, and some places such as certain Cameron Village neighborhoods have actually seen appreciation in the last year.

So, the inventory level really gives us an idea of how healthy our market is. The number has improved 6% from 2008. Most people consider a level of 6 months to be a very healthy market. So as we enter 2010, we see signs that supply and demand are shifting more back toward a seller’s market.

Other stats that are important: average days on market for listings is currently 104 days, and the median sales price is $178,000, down 4.7% from a year ago.

There are still plenty of hurdles ahead for our economy including a bleak job market outlook for the near term future, incredibly high government spending (which could cause interest rates to rise), and an ever growing national debt. These factors could cause high inflation (I see no way around it at this point), but there is a silver lining for real estate owners. If you look back over the last 100 years, hard assets like real estate, oil, and gold often appreciate significantly during times of high inflation. The reason for this is that these commodities are measured in US Dollars, and as the dollar goes down in value, real estate acts as a protection, or “hedge”, against inflation.

My current take: I am actively buying real estate and I would encourage you to do the same. I believe that with interest rates at an all-time low, and prices back to levels that are much more affordable, combined with the fact that Raleigh real estate has been an historically stable market, I think it’s a great time to buy. Whether you are a first time homebuyer or “move-up” buyer looking to take advantage of the tax credits, or an investor looking to create equity through real estate, I think there are a lot of opportunities out there….

My take on the market: Real estate is a segment of the market that follows the same rules as everything else in economics: supply and demand. Two things have happened in the last few months. First, supply has dramatically decreased. New construction has virtually come to a halt, which is good for the market right now as the last thing we need is more homes on the market. Second, demand has significantly increased thanks to low interest rates and lower home prices. Despite the negative media attention, the doom-and-gloom, and all the problems our government has gotten us into… been trying to deal with, the real estate market will, and is, recovering.

Raleigh real estate is one specific section of the national market that is extremely healthy compared to the rest of the nation. Here, sales are up 28% from a year ago and the amount of Raleigh homes for sale has dropped about 15% from this time last year. Our location continues to rank among the top 5 places for population growth and I believe that fundamentally, we live in one of the best real estate markets in the country.

See the video below on the world’s greatest investor commenting on the residential housing market recovering. I disagree with a lot of what Mr. Buffett believes politically,  but I agree that the residential market has reached bottom, and like any other market, it goes up, down and back up again.  One thing I agree with him is his go-to investment strategy of buying when everyone else is fearful. There are still hurdles to jump over, and this will not be the last recession we face, but I truly believe that this could be the best buying opportunity most of us will ever see. I’m actively looking for property to buy and I would encourage you to do the same.   

This home is listed at $247,900 and is in one of the most desired locations in Apex real estate and Cary real estate… just off Davis Drive, close to 64, convenient to Cary, Apex, or RTP. There are not many Apex homes for sale in this price range. Check out my featured listings page for more details and more pictures.

A great place to start would be at 3513 Knightshire Drive in Raleigh, NC. I just listed this home a couple days ago and it is one of the nicest pieces of property I’ve seen at this price range. The home is somewhat smaller than some comparables in this price range in the Raleigh real estate market but the home sits on 1.22 acres of professionally manicured landscape.

The home is located in Royal Senter Ridge neighborhood, just off Blaney Franks Road in Raleigh. It is a quiet neighborhood with mature trees and landscaping, and a great place for homeowners looking for the convenience of being in Raleigh combined with having a larger piece of property. This home has 3 bedrooms plus a large bonus room, a first floor master suite, an open floorplan with the kitchen and breakfast area flowing right into the living room, and a formal dining room that overlooks the front yard.

Huge, Detached Garage with workshop/storage area

The owner built the home in 1997 and has spent around $160,000 on the property itself including numerous expansive flower beds, flowering trees, an inground pool and patio area, a huge detached 2 car garage that has a spacious workshop attached (this garage is in addition to the attached 2 car garage on the side of the home… so in effect there is enough garage space to park 4 cars plus a storage area for a 5th car or boat!), and a $25,000 irrigation system that maintains the grass, plants, and flowers all over the yard.

This home would be an ideal place to entertain guests and throw parties as the property has plenty of space for games and outdoor activities. The pool is also completely fenced with maintenance free aluminum fencing. The pool area opens up to a separate, large backyard area big enough for volleyball, soccer, or a great place for the kids.

The picture to the left is the view from the kitchen and breakfast area. You can relax with a cup of coffee at the breakfast table overlooking to pool, or head outside to the private patio.

This home is now listed at $459,900, which is a dramatic reduction from the initial listing price of $525,000. The home last appraised for $515,000.

Much of the luxury home market has taken a hit across the country, but the Raleigh real estate market remains one of the most resilient and I think that at this price, this home is a great deal for someone who is interested in taking advantage of the market conditions to buy their dream home on their dream property. The home has a lot to see (much more than I can cover in just a blog post), so please contact me with any questions, or visit my featured listing page for more information and many more pictures of this home.

John Huber works in the Raleigh real estate market including the North Raleigh real estate market, downtown Raleigh real estate, and the surrounding areas.

In fact, this might be the only time we see this type of credit. With the national deficit rapidly expanding and with the out of control spending that we are witnessing, the US will have plenty of obligations to meet (namely repaying China), and those obligations won’t go away anytime soon (our kids and grand kids will not be thanking us). We have gone from the world’s biggest lender to the world’s biggest borrower and we (as a nation) do not have enough money coming in to repay our debts. One way you can personally hedge yourself against rampant inflation (a likely outcome given our current policies) is to buy and hold real estate. Real estate is a hard asset that has real, intrinsic value. This means that as the value of the dollar declines, assets that are measured in dollars like gold, oil, and real estate tend to appreciate. If you hold real estate over the long term, you will be better off than keeping your money in a bank or CD (or worse, paying someone else’s mortgage in the form of rent!)… Savings accounts will likely fall short of inflation which means that the more you put in the bank, the more your buying power will deteriorate over time.

I could continue talking about my opinion on government spending, but I’ll save the rest of my thoughts for a later post… the point I want to make is that this $8000 tax credit may not be extended and this could be the only time that you will be able to take advantage of it. The credit runs out on 12/1/09 (unless legislation passes to extend it). This means that if you are thinking of taking advantage of this credit, you have less than three months to find a home, get it under contract and close. Here in the Raleigh real estate market, you will need to write a contract on a home by mid October if you would like to close by the end of November. Please take advantage of this credit! If you have any questions on the Raleigh real estate market, or Raleigh real estate investing, please feel free to contact me.

John Huber works in the Raleigh real estate market, and he specializes in downtown Raleigh real estate, North Raleigh real estate, and Raleigh Investment Property.

This North Raleigh townhome is listed at $139,900. It is located in an outstanding spot in North Raleigh, less than a mile from the Spring Forest/Falls of Neuse intersection. It would be a great starter home for a young couple looking to take advantage of the $8000 tax credit. It would also make a good long term investment for someone who wants a low maintenance property in an appreciating location. The home has 2 large bedrooms, a formal dining room, a spacious living room that overlooks a wooded backyard, and an open kitchen large enough for a breakfast area. The home has had just one owner and is in outstanding condition. Take a look at my featured listings page for more pictures. The address is 6419 Meadowview Drive in Raleigh.

If you are interested in taking a look or would like more information, please contact me.