Raleigh Real Estate Market Update – September 2011
According to the statistics recorded in the Triangle Multiple Listing Service there’s good news and there’s really bad news for the Raleigh Real Estate Market. I prefer the bad news first because it always make the good news sound just a little bit better so here’s the bad news;
Median & Average Sales Price Declines in Raleigh by double digits
If you have to sell your home in Wake County North Carolina where 100% of Raleigh is located, the value of your home may be falling faster than the presidents job approval ratings!
According to this Raleigh real estate expert, the region is officially in the second dip of the dreaded double-dip recession having seen month over month declines… all year (see the graph below).
Both the median and average price of a home in this county have declined more than 10% when compared to the same period one year ago to where they are today at $195m and $235m. The Average Days on Market has increased by more than 20% rising from 100 to 122 days.
Closed Sales in Raleigh increased year over year by more than 20%!
The actual number of closed sales in September were up more than 20% from the same period last year. But to be candid that was probably one of the worst sales figures in a decade so let’s not jump for joy just yet.
Number of New Listings Decline
Here is the really good news – New Listings (the number of sellers who decided to market their homes) in September declined by nearly as much as sales increased a whopping 17.48% and this has caused the Months Supply of inventory (MSI) to drop more than a full percentage point from 9.7 months to 8.6 month. The MSI this is the expected number of months it will take to exhaust the current inventory of homes at the current absorption rate or demand.
What does this mean of you are a seller? It means if you aren’t realistic about what you have to price your home to sell it for in today’s market, then you shouldn’t try to list your home for sale because there is still nearly 9 MSI and yours will sit well beyond the average days on market and will eventually sell for less.
If you are a buyer and are buying under $300,000 don’t think that Raleigh is a buyers market because it isn’t – the under $300m is where nearly ALL activity is so you are competing in a market that looks just like it did in 2007. Take advantage of the low rates and be prepared to make your best offer because as you can see from this graph, there is a LOT of competition.
If you would like a complimentary copy of the market report for Wake County or any Raleigh Sub-division click here to have it emailed to you.
Related articles
- Raleigh Real Estate – It’s NOT a Buyers Market (theraleighmortgageguy.com)
- Raleigh Attracts Brains and Remains One of the Best Cities for Jobs in the US (prweb.com)
- Housing; is it still the best Investment for Americans? (theraleighmortgageguy.com)
- Real Estate Double Dip: Why Buyers Love It and Sellers Hate It (via Triangle Real Estate Blog) (theraleighmortgageguy.com)
- Expanded Income limits for $8,000 Down Payment Assistance for Raleigh / Wake County Home Buyers (theraleighmortgageguy.com)
- Once again Forbes names Raleigh #1 Place for Business! (theraleighmortgageguy.com)
Since relocating from Northern Michigan in 2007 I have lived in Garner (27529) with my wife Melanie and our four children. With personal production of 8MM in real estate sales across Southern Wake County I am considered to be a local market expert in the following communities: Garner (27529), Fuquay-Varina (27526), Holly-Springs (27540), Apex (27502), and Raleigh (27603, 27604, 27606, 27609, 27610)) which spans from downtown Raleigh to Willow Spring including Lake Wheeler. Call or email me, I’m here to help! Ricardo Cobos (919) 526-0183
Thanks for sharing the great detail information and explaining with the stats with the graphs.
keep posting
Your information is very helpful for those of us who don’t have expertise or market knowledge in this field. While I am glad that I am neither buying nor selling a home right now, I am reminded of the challenges this market poses for those who are. Thank goodness there are honest professionals like you who are providing guidance!
What about $500,000 to $750,000?
Terrence – Thank you for your question.
There’s a saying by Real Estate Agents in Raleigh during this recession “$650,000 is the new Million”. Simply put that you can in most cases buy homes here in Raleigh today that once sold for $1MM for $650,000.
Before you run off and try to buy a house listed for a million bucks, understand that house probably already reflects the reality of our market today. In fact in July I helped a client finance a home and the price was $950,000 . This home was assessed by the Wake County tax assessor to market value in 2007 at $1,250,000.
Simply put there is an abundance of high end luxury homes on the market for sale in Raleigh-Cary but the supply seems to be dwindling as home-owners take their homes off the market. Even so depending on how you read the numbers and to what price point you gauge there is upwards to a 44 month supply of luxury houses to choose from at the current absorption rate.
Making things even worse is a headline that I read this week from the LA Times that reads
Essentially what the article says is that this class of home owners may be so far under water on their mortgages that there may soon come a glut of high end luxury homes in the market at foreclosure sale prices! We’ll see how that impacts luxury home sales in Raleigh!
Thanks again for the great question and be sure to subscribe to the blog for automatic updates and alerts!
How is the market for the sale of Condos?
Sherril – Your question could be easily answered with another questions equally simple “What Condo Market?”.
Raleigh never really has been a condo market and what there is available has been thwarted by the downturn in the mortgage market. You see the investor appetite for mortgages backed by condominiums was thoroughly doused in early 2007 and has yet to return because much of the early foreclosures were not sub-prime mortgages but conventional loans made to investors (speculators) who were buying condos in Florida and Vegas.
HOWEVER– if you have cash there are some amazing deals to be had in the luxury condo markets in Downtown Raleigh and Glenwood South.
Thanks for the great question and please be sure to subscribe to the blog I will make sure to write a piece soon on the Raleigh Condo Market just for you!
Ricardo… good stats. Months of Inventory has always been my favorite statistic when analyzing the residential real estate market. In my opinion, it’s the most important statistic and if you have to look at just one number, look at that one. As opposed to price or sales which are lagging indicators telling you where the market has been recently, Months of Inventory is a leading indicator that gives you both a picture of where the market is now based on current sales numbers, but also provides clues as to where prices will go (or at minimum, it gives you a picture of how tall or short the “hurdle” is for prices in the immediate future). Which 9 months of inventory, the real estate market still has challenges ahead of it, and you are right to say that sellers need to continue to be realistic in pricing their property.
In the residential real estate market, buyers have had the upper hand for 4 years, and it looks like that will continue at least for now.
Great info Ricardo. I am sadden by the events that have caused all of this turmoil for our country andnmy fellow man. But, we did bring this on ourselves! Now let’s hope we can fix it.
Yes I know several people who are upside down in CA. It’s not pretty.
That’s great information Ricardo. It is always good to have an insider who we can count on. I’m in the process of a refinance now and it seems my timing there is pretty good.
Thanks
Terry
Terry – Thanks for your comments; Today many people attempting to refinance their homes they may be surprised to discover that their homes aren’t worth what they once were. In fact a story was just published yesterday in an industry mag; “25% American Home owners Swimming in Negative Equity” (or owe more than they are worth).
The good news is that most of that negative equity is isolated to markets that experienced unrealistic growth like Las Vegas, Phoenix and all of California and Florida. Those markets are unlike Raleigh which has seen very little growth during that same time period and as a result of our projected population growth is expected to boom from 2010 – 2020. Now if only that would begin!