Triangle Area Real Estate News & Information

It’s a great question and one I hear all the time. There are many potential home buyers who are presently “waiting”. However more often than not, their waiting for the wrong things to happen and when those things do happen they’ll realize they missed the best deals.

I’ve been buying and selling real estate for nearly 35 years. I’ve been a full-time licensed real estate Broker for just over 20 years. I’ve been through Buyers, Sellers and neutral markets. I’ve had and worked with mortgages between 4% and 18%. I’ve made and lost money. In short I’ve seen a lot of markets, been through many real estate cycles and have gained the knowledge and perspective that only comes with time spent mastering whatever it is you do. It’s the main reason my clients hire me, and keep me as busy as they do; it's to help them make informed decisions by supplying them both with information and analysis to help them decide what makes sense for them.

I've said it before, “There is no National Real Estate Market.” What I write is geared primarily to my specific market; the Research Triangle, Chapel Hill – Durham and Raleigh NC, though a lot of what I’m sharing in this specific blog post I know will apply throughout the United States.

Why are Buyer’s waiting?

Basically their waiting for two reasons; they are either uncertain or fearful about their job security; which I can't address. Sadly, I'm unable to ensure job security. The second reason is their waiting is actually the primary reason I hear when I speak with Buyers; their waiting for less inventory and this is because of lots of lousy media reporting regarding real estate that offers no real insight into what really matters when considering buying or selling a home. They fail to explain when you should buy, instead they tend to suggest buying when everyone else is and it's a Sellers market. In short at the absolutely worst time.

In case you've forgotten your Economics 101, you buy when prices are down. I read and hear over and over again about how much excess inventory there is. What's crazy is that hearing there's excessive inventory should excite Buyers. Excessive inventory is proof positive that it’s a Buyers market. It's the rule of supply and demand, if supply is up and demand is down then prices will favor those who are buying. When supply begins to normalize {in real estate; 6 months of supply is considered a neutral market favoring neither Buyer nor Seller}, then prices will go up and you can rest assured that Sellers won’t be nearly as motivated to cut the deals their willing to cut now because they won't have to.

Want another compelling reason? Consider the impact of interest rates going up. We all know this will happen, the only question is how fast and how high? I’ve written in the past about the effect interest rate increases have on a Buyers power, see my blog post Should I Buy Now or Wait to See if Home Prices Come Down? The short story, for every 1 % increase in interest rate decreases your purchasing power drops by roughly 10%.

Lastly average home prices have been beaten down and are more affordable now in comparison to almost anything else you purchase. Here’s where historic perspective has some value.

*In North Carolina in 1986 the average price of a home in the area was $96,000 Today in the local area the average price spent in the immediate Research Triangle area ranges from county to county between $185,000 - $279,000 and between four counties averages $229,500.

The table above shows that real estate prices have been beaten down considerably in comparison to all the other items we regularly buy and unlike those other items which are either used up or depreciate (think cars) homes tend to appreciate over time, and more importantly supply your basic need for shelter and quality of life. Worried that the market may continue to fall further, it's possible though depending on the price range, neighborhood, school district etc, the local data doesn't show any significant drop in prices year to date particularly in the average price range between $175,000- $275,000.

Now Best Time To Buy

So prices are down and Buyers are in a position because of ample inventory to negotiate a little harder than usual, and interest rates are still low. If you're thinking of buying a home all the signs point to it being an excellent time to do so. Consider your time-line and if you plan on living in the area for 5 or more years, it's time to stop waiting and take advantage of market conditions.