Here’s a look at the past twelve months of sales for detached homes in Apex in units and average sales price. 

Click here to see the chart for Apex

Click here for see the chart for Cary

A little further than ordinary,
What appears to be too far,
Beyond “It’s hard,”
Above “I can’t” -
Is the place where dreams
Await those who will dare
To stretch, to strain, to squint.
As the hand goes farther,
The heart beats swifter,
And the will says, “One more time.”
In that place, treasure awaits,
For those who always reach high.

Happy New Year!

The open house was held on Thursday, Dec. 3 at the Halle Cultural Arts Center in downtown Apex. Attendance was so heavy that the Apex Fire Marshall prohibited more people from coming in the building for about 15 minutes during the four o’clock hour. The Western Wake Freeway is a component of the Triangle Expressway and another leg of I540 which will eventually circumnavigate the border of Wake County.  There were various charts at the open house, including schematics for sound walls and grading designs.  Other charts covered the ramps from the highway onto Cary and Apex commuter arteries.  The interchange at highway 64 will be extensive, including a major set of ramps onto highway 64 and a separate set of ramps to access Kelly Road and the Beaver Creek commercial complex. 

The DOT expects to finish the roadwork traveling north to south from the junction of 55/54 near RTP to highway 64 at Beaver Creek by the end of 2012. The leg between 64 connecting to the 55 bypass in Holly Springs is scheduled to open in early 2013.  The road will be the first toll road in our state, and rates have yet to be set.  With the advance of technology, there will be no booths to collect fees. Instead, electronic readers will pick up transponder signals from registered cars or take photos of license plates for vehicles without a transponder.  Cary residents can access the new highway at Green Level Road or through existing ramps in Morrisville at highway 55 or Davis Drive.  In addition to the new ramps at Highway 64 near Beaver Creek, Apex residents will have a second access point to the south at US 1. Learn more about the project at the NC Turnpike web site.  Turnout was covered by WRAL TV staff; they carried a video report on the evening news and also posted this report online.

Handout Brochure from the DOT
File 1      File 2

North Carolina residential sales contracts will soon move to a due diligence model.  George Bell, chairman of the North Carolina Real Estate Forms Committee, reported the upcoming steps of review that are scheduled for next spring.  If all goes well, the new format will enter the Realtor market in October of 2010.  The due diligence approach will dramatically simplify the contractual hurdles and deadlines that buyers and sellers face with the current contract provided jointly by the NC Association of Realtors and the NC Bar Association.

Simply put, the new format will create two deadlines for these sale contracts.  One date for the buyer complete all investigations and contingencies that is “due diligence”, and one date for the settlement.   Currently, buyers have over twenty options and deadlines for voiding residential sales in the standard forms.  It creates a lot of headaches for agents an clients. The other big improvement for sellers will be the inclusion of an option fee to compensate them for time and effort in marketing the property to the public.  Regardless of whether the buyer closes, the seller will keep this money delivered at the time of the offer. The new form will dramatically change how we we advise and serve our clients.  Give Kevin a call if you would like to know more.

This week usually marks one of the slower weeks of activity for the Triangle Market.  However, there are some terrific advantages to having a home for sale during the holiday season.  Click here for a terrific list of reasons why you can be successful in selling your home during this season of the year.  We are always ready to help, whatever the season.  Have a terrific holiday and safe travel.

Just a quick post to let you know about one of downtown Raleigh’s best stops, Cameron Village.  Yesterday I enjoyed lunch there with one of my favorite colleagues.  Warm sunshine, seventy degree temperature, and the aroma of autumn leaves made for great conditions for our sidewalk dining.   Cameron Village is one of the first large retail centers built in the southeastern United States.  Unlike the current plaza design, this one has a very unique layout, look, and feel.  You will find a terrific mix of national suppliers and one-of-a-kind retailers, more so of the second group.   I stopped in Bailey’s, and they replaced my watch battery in four minutes at no charge - a hallmark of their full service approach, and the way I like to run my business too.

If you have missed this treasure on your exploration of Triangle spots, I highly recommend you add it for a lunch meeting or upcoming weekend excursion. Take your camera, stroll the complex and get familiar with this Raleigh treasure.

I attended the Raleigh Regional Association of Realtors Market Trends update this week.  I was fortunate to learn a great deal about national, regional, and local trends that will impact residential real estate for the next six to twelve months.

Mark Vitner, Senior Economist with Wells Fargo Securities was one of the keynote speakers.  Mr. Vitner presented some rather startling statistics regarding national job loss and available home inventory.  Over the past 24 months the U.S. has lost approximately 9 million jobs; it may be 2016 before we fully recover that job count.  We are also currently carrying a 2 million surplus of available homes; however this surplus is concentrated in four states (California, Nevada, Arizona, and Florida).

Mr. Vitner made several other points including his projection of rising mortgage rates next year, national home appreciation remaining around 3.8% (but fluctuating dramatically within local market conditions), and another wave of foreclosures this winter. In his opinion, unemployment rates are the key issue to resolving our national and state economic woes.

Stacy Anfindsen with the Birch Appraisal Group was our second primary speaker.  He also focused on the current unemployment rate.  The Triangle market is currently losing jobs at a rate of 5% per year. His other remarks were largely pointed at housing sales statistics in the Triangle.  One interesting observation is that we are currently experiencing reverse migration from our outlying communities like Holly Springs, Rolesville, Zebulon back into the Raleigh and Cary city limits.  As prices decline in more central areas, buyers are attracted into those areas from more distant commuting locations.  After huge drops in sales volumes in the 3^rd quarter of 2008, we see no or small drops in most price points for this quarter in 2009.   One of his key points was that sellers must accurately price their homes from the time they enter the market. In the third quarter, homes at original list price sold in 44 days at 97% of asking price.  Compare that with properties with price reductions that sold on average in 138 days for 88% of original list price.

Here are my conclusions that I share with my clients and network:

The Triangle Real Estate Market is settling after a period of extreme volatility.
 

1. Home Owners are changing their paradigm. Housing is seen less as an investment, and more as an expense.  Most of the population is working to reduce expenses.  This may limit many prospective real estate owners from gaining the investment benefit of moving up in a down market. 
    
2. The Triangle home market is a tough patient:  The national statistics have been more like a severe case of pneumonia while we are experiencing a long-term case of a sinus infection.  Painful, but functional.  Our home values have not gone negative, and properties here continue to appreciate at modest rates. 
    
3. This will be a tough winter:  with many people reaching six months of unemployment, household budget tightening, and more foreclosures to come, real estate decisions will be very cautious for most.  However, we will probably experience the most negotiable sellers and lowest prices during the next six months before things begin a steady, rational climb upward next spring.  If you are a bargain hunter, an investment/landlord owner, or a first-time buyer the fourth quarter of 2009 is an ideal time to buy real estate. 
    
4. Real estate wisdom will yield high dividends. Working with an expert in market conditions can make a very big impact on your bottom line during this season.  Focus on experienced agents with strong resources to help you navigate through these conditions. 

Everyday I hope that I can find a breather from the pounding changes in the residential real estate industry.  It is somewhat like looking for stable ground inside a turning clothes dryer with wet sneakers thrown in just for a higher degree of difficulty.

I have come to embrace the fact that economic and technological changes facing both consumers and industry professionals are not going away.  Full speed ahead on the change meter!  How do we best serve clients and develop professionals in this environment?

1. Adopt the surfer mindset:  Every wave is different; every day the sea creates a different mix. This environment calls for extreme personalization of service.  Each client brings their own online research to the transaction experiences. Combine that fact with the amazing pallet of human personalities, and real estate professionals must master the skills and tools to know each client personally and precisely.  On the management level, every associate is unique and enabled to approach the market from a slightly different angle.  Industry tools outnumber the professionals’ ability to use them, so a primary role of management becomes assisting the associates to identify the right tool for their own professional profile.

2.   Massage the stress:  clients endure a complexity of stress points in the transaction.  They face changing requirements for mortgages, a combative approach from the party with whom they contract, learning the dialogue and processes of the transaction, and the personal chaos that results from packing belongings, new school assignments, and changing their own job positions.    A successful agent knows how to inject humor, when to supply emotional support, and works daily to minimize transaction problems before they even reach the conscious level of the client.  

1. Write in Pencil:  with a technology revolution ongoing, state legislation changing bi-annually, and prices in downward flux, many of our communications to clients will need an update by next week.   Agents must prepare and enable clients to deal with the fluid nature of the market and transaction execution.   Slow-moving REO representatives, undisclosed foreclosure proceedings, and one more “minor” requirement from the lender – each has become a routine part of the current transaction process. 

The rate of change will accelerate, and the tools for riding the wave faster are fortunately present.  The art of shift is upon us, so keep yourself flexible.

There are many ways to analyze sales data and activity.  One that I don’t publicize too often is the volume of showing appointments on properties that are for sale through real estate companies in our local board of Realtors.  Regarding the western Wake County and northern Wake County submarkets, our reports reveal that showings were up 23% in June & July compared to the same months in 2008.  However, showing activity decreased by 6% in August.  In the Cary/Apex/Morrisville region, listed properties hosted 5 showing appointments per month over the summer, and an average of 4 appointments occurred for North Raleigh. In both areas, a great deal of this activity occurred in homes that were priced under $250,000. 

What was the sales activity?  Cary/Apex/Morrisville experienced 318 closed sales in July, down 5.9% from 2008.  The average sales price as $295,411 and sellers netted 96.9% of their original asking price.  These homes took slightly more than three months to go under contract.  Closings for the first seven months of 2009 were down 25.3% compared to the same time frame in 2008.

For North Raleigh, closed sales YTD through 7/31 are down 23.5% with a total fo 1,415 closed units; 282 of those closings coming during the month of July.

On the positive side, we still have an overall appreciation rate for properties selling in these markets hovering around 3%/year with the average home being sold after slightly less than six years of ownership.

 So what’s it all mean?  Three main points that I see:

1. After a long period of upheaval, the market is beginning to settle, but not yet stable.
2. The Autumn months are going to be challenging for sellers, and filled with opportunity for buyers.  Sellers must focus on aggressive pricing, and buyers can evaluate selectively.
3. Proceed with experience.  The advice of a knowledgeable professional is at a premium in market conditions where very few have the experience to provide effective advice.  

The Age of The Unthinkable is a terrific book which provides a model for understanding many global changes that effect our local interests.  With the pace of change accelerating, the influence of the Internet on the entire planet, and the feelings of uncertainty that many of us have about employment,  author Joshua Ramos writes that “crisis management is the essential skill of the next fifty years.”  

This is crisis not in the sense that we are always facing life or death decisions (although these decisions may become more frequent), but it is the crisis that we face with greater frequency in our homes, schools, workplaces and how they connect to affairs. One approach is flight and fear; a better approach is engagement and optimism.  Using the theory and metaphor of a  sand pile, Ramos explains how personal and corporate decisions on small issues can lead to an avalanche of consequences, often unintended, for national and international issues.  To summarize, small actions often produce huge consequences.

After a scary analysis of global issues (for example, the great expense of defense vs. the low cost of terror), Ramos moves on to his theory of deep security:   

 In a world that is changing fast, we need a grand strategy that’s capable of the sorts of rapid change the world itself produces, because much of what we have to confront will be things that have never occurred before. 

“…much of what we have to confront will be things that have never occurred before.”   From here, I will transition to the world of real estate.  The current markets of the U.S. are ones which have never occurred before.  Yes we have dealt with down markets, but not with the current set of circumstances.  Deflated buyer interest and unstable economic conditions combined with great affordability and low mortgage rates are forces that seem to pull in opposite directions.  How are we to make sense of these circumstances? More importantly, what is the opportunity at hand? 

 The one thing it (deep security) requires absolutely is a comfortable fluency with the disruptive energy that is remaking the world.  

The real estate market is changing.  The move from local market with tight controls by real estate professionals is over.  We are currently operating in an environment of regional scope, and because of the resources of the Internet, the market will quickly shift to a national scale with tools like the Schiller Index, Zillow, and chat boards galore to rate professional services and analyze property conditions ad infinitum.   Most experienced agents are struggling at best to adapt to fundamental changes in the nature of their business; a few are embracing the opportunities and increasing their value for clients.

Ramos concludes a book that begins by addressing frightening and difficult issues by acknowledging that the age of the unthinkable is an age where “what matters is beginning to explore the idea that we can do unthinkably decent things with our lives…”   

I am embracing the changes, and I look forward to working with you to create real estate outcomes that are both positive and previously unimaginable.   If you read the book, I would love to get your feedback; stay in touch!