We have been reading a lot of negative things News and Observer and on various websites about the condition of the real estate market here in the Triangle Area. I am here to let you know that you don't need to believe everything that you read. The real estate market here in our area is still strong. Is it as strong as it was last year at this time, or even six months ago? Well no, but we are still not experiencing the rapid decline that other markets have had.
I recently received the following information in an email. It was written by Stacey Anfindsen, who is a local appraiser and the real estate market "go to" guy for statistics and information. He has given me permission to put this information on this blog, to share with everyone. I hope you find it informative and useful.
*******
Responding to the News & Observer:
Stacey Anfindsen Shares More Accurate Depiction of Market and Five Reasons Not to Panic Over Local Home Prices
In response to the main headline in the 10/27/08 N&O, I am presenting facts to contradict
the headline, which is yet another attempt to scare local readers by using data from selected national
sources. The writer states five reasons; crashing home prices, investor speculation, complex
investments, job losses and repeat delinquencies. I will respond to each of these to provide some local
perspective.
1) When analyzing our market, I look at data from the counties of Wake, Durham, Orange and Johnston. Within this market, the average closed price of all housing is up 8% and the average closed price of resale housing is up 6%. House price appreciation, which compares the two most recent sales prices of the same house , is an area where the Triangle outperforms the national market. Our current rate of houseprice appreciation in the Triangle is just over 4%. This rate beats the state (+3.6%) and national rates (-4.5%).
2) The Wake County Revenue Department reported +/- 21,000 closed sales within the past 13
months. Roughly 5% of these sales were purchased by buyers from out of town, a huge difference compared to the 20% rate nationally.
3) It is almost impossible to track what percentage of local purchases were made via the subprime loan mechanism. Per the FHFA mortgage metrics survey for the second quarter of 2008, 17% of all outstanding mortgages in the U.S. are rated as subprime. Therefore it would be hard to argue that a majority of house purchases were made via this mechanism.
4) Job losses are real both nationally and locally. The Raleigh/Cary/Durham MSA did not have a workforce increase comparing 8/08 with 8/07 for the first time since the 8/01 versus 8/00 period.
5) The mortgage metrics survey reveals some additional information regarding the national mortgage market. They surveyed over 30 million outstanding loans in the Fannie Mae and Freddie Mac system and found that 98.6% of these loans were rated as current. They also state that foreclosure proceedings were initiated on 432 homeowners per day during the second quarter, a big difference from the 2,700 per day figure stated in the lead paragraph. There are currently +/- 14,000 listings within the four county area in TMLS. Roughly 3% of these listings are classified as foreclosure, bank or corporate owned. I have been tracking the residential market within the Triangle for over 20 years. The foreclosure market has
always accounted for a very small percentage of activity.
Our current market can be summed up with my version of the good, the bad and the ugly;
The Good
Third quarter closings were the 6th highest in history
Current supply of 8 months is lower than national current supply of 11 months
Average house price appreciation is superior to state and national rates
Average re-sale sales price +6%, average overall sales price +8%, average list price +2%
Houses priced correctly have sold in an average of 55 days.
Current supply of 8 months is lower than national current supply of 11 months
Average house price appreciation is superior to state and national rates
Average re-sale sales price +6%, average overall sales price +8%, average list price +2%
Houses priced correctly have sold in an average of 55 days.
The Bad
Overall inventory grew 7%, making 2 consecutive months of less than 10% growth
Withdrawn listings increased 2% compared to 9/07.
Withdrawn listings increased 2% compared to 9/07.
The Ugly
29 consecutive months of inventory growth, 20 consecutive months of lower pending sales
63% of all price points have an oversupply of housing product
9/08 expired listings were 227% higher than 9/07 expired listings
A survey of Wake County house purchases where the house was purchased and then re-sold within the past 12 months reveals a median percent per gain of 0%. I think that is pretty impressive compared to what is happening in the national market.
As we have seen during 2008, our local market is not immune from happenings in the national
market. Our biggest challenges during the fourth quarter of this year and into next year are to grow the workforce and cut down on the number of price points with an oversupply of housing.
63% of all price points have an oversupply of housing product
9/08 expired listings were 227% higher than 9/07 expired listings
A survey of Wake County house purchases where the house was purchased and then re-sold within the past 12 months reveals a median percent per gain of 0%. I think that is pretty impressive compared to what is happening in the national market.
As we have seen during 2008, our local market is not immune from happenings in the national
market. Our biggest challenges during the fourth quarter of this year and into next year are to grow the workforce and cut down on the number of price points with an oversupply of housing.
