Home Buying in Raleigh>Question Details

Ken, Home Buyer in Saint Paul Park, MN

I just sold my home in D.C. and am moving to Raleigh, NC area. I have been following all the layoff news and

Asked by Ken, Saint Paul Park, MN Tue Jun 23, 2009

the high unemployment in NC. I am looking in the 750,00 - 900,000 range close to downtown and was wondering if a home buyers bargaining power has increased in this price range due to the economic conditions. I have been tracking listings in Raleigh and have seen quit a few price reductions but sales still do not seem to be closing. Any thoughts ?

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Ken,
I live inside the beltline and am not a realtor trying to get business. First, Do you have any children in school? If so, are they going to attend private or public school? This is going to be very important if your kids are attending public schools. If you don't have kids in school, then you will have many more areas to choose from.
I lived in Cary for 18 mths when I first move to Raleigh from Richmond in 1996. Cary is very nice if you want something new, bigger and you will have access to restaurants, home centers etc. It is it's own little world. If you chose to live inside the beltline, you give up having a newer home and will have less square footage. What I do like about being inside the beltline is the small town feel, more southern if that is what you want, and easy access to great clubs, unique restaurants and the arts. If you want something bigger and newer, Cary and North Raleigh are for you. You can still have easy access to downtown compared to DC. Good luck.
0 votes Thank Flag Link Thu Aug 6, 2009
Ken,
Real Estate and home prices are very local. So is unemployment. North Carolina is a large diverse state with agriculture, manufacturing, and everything else. The Triangle area is totaly different from the rest of the state economicaly. With the Reasearch Triangle Park located here, there is still growth and industry relocations. Yes there has been some adjustments, but that is coming off 2-3 years of unprcedented growth in prices and sales. The price range you are in has had more adjustment than other ranges, and there are some great bargains available, but not 50% off. Each property will need its own evaluation as to a bargain and an experienced negotiator
0 votes Thank Flag Link Tue Jul 21, 2009
Ken,

Have a great 4th weekend. If you and your wife do not have a buyers agent to show you into the homes you area interested in and to negotiatiate a good deal for you please feel free to contact me at 919-387-4100. I have 16 years experience and have sold over 1500 homes in the Raleigh area. I am also a local and national real estate trainer and would be happy to put my knowknowledge of the area to work for you.

Again, welcome to our area. You will love it. I started my real estate career in Baltimore so I too have relocated from the Maryland/DC area and have found that the Raleigh area is great and has a lot to offer.
0 votes Thank Flag Link Fri Jul 3, 2009
Thanks again for all the replies. Wife and I are comng down for a house hunting trip thw week after the fourth and will check out the areas mentioned !
0 votes Thank Flag Link Thu Jul 2, 2009
I think when you're here, come and look at what looks interesting to you. Then look at what your Realtor recommends. Then, after you've traveled the neighborhoods, talked with the neighbors, visited local grocery stores, schools, etc....then.........the bargaining power sets in. "if you don't ask, you don't get".
0 votes Thank Flag Link Tue Jun 30, 2009
Hi Ken,

I have a few thoughts. There are some great neighborhoods inside the beltline in Raleigh. I know of one, which belongs to a relative, which was purchased some years ago, rennovated, in a very, very nice neighborhood. Their children are now in college and it's time for them to move out. Their asking price is $925,000. Five bedroom, 2 1/2 baths, eat in kitchen, family room w fireplace, living room, formal dining room, laundry room, deck, two car garage, over the garage family room with access from the kitchen area or upper bedroom area. Brick, two story, grand staircase, hardwood floors, wooded lot. Let me know if you have further interest.

Your bargaining power has increased due to the economy, however, most of the large, lovely, older homes inside the beltline of Raleigh are pricing where they need to be to sell... or going off the market.

There are condos near the true downtown which may/may not be of interest.
0 votes Thank Flag Link Tue Jun 30, 2009
Ken,

There is an opportunity for a tear down in most nicer areas close to downtown. It was occurring rapidly for a while and has slowed down recently. Depending on how close you want to be downtown there are some great areas near Rex hostital/Glen Eden area as well just outside the beltline but close to downtown. Sometimes the agents overlook those neighborhoods because they don't have such a prominate name but the sales are very stable and appreciation is still occurring.

Be cautious with believing that there is any level of appreciation over the past year in any of the inside the beltline properties in the price range that you are looking in. Much of that will depend on what the original purchase price was and what upgrades they have added to the property. Be cautious of thinking of high annual appreciation at this time because that would be a rare gem in this market.

There is a great list of appreciation per neighborhood and area done by a local appraisal firm. Feel free to contact us if you would like this list to compare with what you are finding
0 votes Thank Flag Link Tue Jun 30, 2009
Hi, Ken. I moved to Raleigh from D. C. and love it. The previous answer was right-in the Five Points/Hayes Barton area of Raleigh, close to downtown, there is still 7% appreciation, according to my realtor. I am just listing my house on the 6th, on Scales Street, take a look with TateRealtors.
The Five Points area is wonderful.
0 votes Thank Flag Link Tue Jun 30, 2009
Hi Ken! What a very desirable position you are in... You've received some great info from some very outstanding REALTORS® in our area.

Five Points is one Raleigh's inside the beltline premier spots. Areas like Hayes Barton & Bloomsbury are quite lovely. Also might want to look at Vanguard & Roanoke Park. Then there's always the historic districts too if you like those kind of places - Glenwood - Brooklyn and Mordecai.

In any event - welcome to our outstanding area! I'm sure you won't be disappointed.

Pamela
0 votes Thank Flag Link Fri Jun 26, 2009
Thanks for all the replies. One of my friends who used to build homes in Atlanta also mentioned that with so many home builders looking for work I may be able to buy a tear down close to the downtown area and contract with a builder to build a new home on the lot at a very reasonable cost per square foot (less then what they were building in the lasy few years in that area). From my research it seems that the "Boylan Heights" and "Five Points" area are close to downtown and may hold possibilities.
0 votes Thank Flag Link Fri Jun 26, 2009
Hi Ken
I have lived in Raleigh since 2001 and like you I moved from D.C. In answer to your question, yes I think you do have some bargaining power here, especially in certain price points. I would be happy to assist you in your search for a new home. If you would like me to send you some available homes please let me know.
I think you will love the Triangle area, it is a great place to live.
Michael
Web Reference: http://www.colvinm.hpw.com
0 votes Thank Flag Link Tue Jun 23, 2009
Hi Ken:

I have lived in the sowntown area of Raleigh for over thirty years and am very familiar with the inventory of Inside the Beltline. You are in a great price range and will have access to many homes that will meet your needs. Yes, sellers are willing to negotiate prices in that range and yes you probably can get a decent deal on the purchase but be aware that many sellers have a gut feeling of what their house is worth and how much they want to get out of a sale so sometimes a low balling offers will be negatively received.

A lot of the homes in that price range are new construction and the builders probably would be more ready to accept a lower offer BUT you never know until you ask in this market place.

I would be happy to chat with you about houses in this area and find out exactly what you are looking for and do a in depth search for you. My husband and I work together as a team so you get two for the price of one. Are you familiar with buyer's agency? Not every state has that and all that means is that you get an agent who advocates only on your behalf and represents you and not the seller. It is a great service that is offered.

Please feel free to call me directly with any questions-919-612-7399.

Thanks

Linda Payne

linda.payne@pruysu.com
Web Reference: http://www.payneteam.com
0 votes Thank Flag Link Tue Jun 23, 2009
Hi Ken, welcome to Raleigh. I worked in Crystal City for 7 years with Booz, Allen and Hamilton and lived just south of there. I then moved to Charleston, then San Diego and landed in Raleigh 9 years ago.
According to one of many internet sites unemployment for our area has come down in the last 2 months - http://www.economagic.com/em-cgi/data.exe/blsla/lauMT37395803. That is a good sign, but the number is still high.
As a home buyer you have great bargaining power in today's market especially with high end homes. Many homes are reducing prices and they are still sitting because the public is fearful. It is a great time to buy for value (more for less) with lower prices and great interest rates, but many buyers are still sitting on the fence because they are not confident about job security. For most they are just not willing to take a risk and who can blame them.
Even though we still have a lot of inventory houses have started moving better just recently and Raleigh is the 6th healthiest housing market in the US.
As with all Real Estate markets houses in some areas/neighborhoods sell better than others so your bargaining power is still going to be dependant on the specific location you want to buy in, but there are 61 high end homes inside the beltline - a desireable area and many of those have had price reductions.

My advise get a great Buyer's Agent that can help you find the perfect house at the best price that meets all your wants/needs.
Best of Luck,
Shelia
0 votes Thank Flag Link Tue Jun 23, 2009
Hi Ken,

This segment has an oversupply of homes and prices will continue to drop. Buyers are definitely in a position to negotiate very good deals. As others have noted the Jumbo rates are high and will probably continue to increase. There continues to be a lot of economic instability and I believe that there are a lot of buyers on the sidelines waiting to see what happens.

Below is a link to the summary for the first quarter on the luxury home market. It'll provide some insight of what the next couple of quarters may look like.
http://www.smapublications.com/Reports/LuxuryHome1Q09.pdf

Good luck!
Lizete
Web Reference: http://www.LizeteSantos.com
0 votes Thank Flag Link Tue Jun 23, 2009
Hey Ken,

Welcome to the area! The good news is that most of the national and state news about unemployment and what is happening in the real estate markets don't really apply to the Triangle as a whole. We're a more insulated market because we never had the crazy appreciation other areas saw. Because we didn't go up so far, we're not having to drop so low. The Triangle also fairs better than the rest of the state in terms of unemployment because of our diversity of jobs and the presence of RTP and the universities. All of this goes into making us a more stable market.

That said, the $700,000+ real estate market is suffering right now, making that specific segment more prone to softening of prices... which is why you're seeing the multiple price drops of current listings. To put this immediate perspective, consider the link below. It shows that there are currently 51 homes on the market now in downtown Raleigh between $700,000-$900,000 (Active). In the last 60 days, only 3 have actually closed. In that same timeframe of 60 days, 6 went under solid contract (Pending) and 3 took contingent contracts (Contingent). Three of those pending sales were for new construction while the other three were for existing homes.

The average # of days on market (DOM) for the closed homes was 305 days while the average DOM for the pending and contingent were 70 and 135, respectively. This all suggests that while sales in this price point are picking up slightly, there is still a glut of homes available and fewer buyers who qualify to buy them. In general, this does suggest that you will have more bargaining power with those Sellers who need to sell, because they won't be able to wait out the excess of housing inventory.

I have more hard numbers on this if you'd like further analysis, but my charts don't fit in this format. Please contact me directly (919-951-4044) if you'd like more specific information about the downtown Raleigh market trends. In general, I think it is safe to speculate that with interest rates this low and dwindling number of buyers in this upper price point, you stand an excellent chance of finding a great deal.

Hope this information helps. Please let me know if you'd like other market stats. I look forward to hearing from you,

Kelsay Berland
Keller Williams Realty
http://www.MyCarolinaHomeSearch.com
0 votes Thank Flag Link Tue Jun 23, 2009
Ken,

First, congrats on selling your house in D.C. That was your greatest hurdle. Next, welcome almost to NC. It is a great place to live and buy real estate.

That price range and the downtown area are specialty niches in our market that not all agents are familiar with. We do not have many sales in that price range. There is a considerable amount of inventory in that price range (in some areas there is more than a 3 year supply). However, there are not nearly as many distressed properties. New construction seems to be taking the largest reductions in price but it will depend on each individual situation.

If you are not currently working with an agent I would suggest getting a buyers agent that is familiar with the downtown and nearby areas as well as that price range. I have been a top selling agent in the Raleigh market for the past 16 years and have sold over 1500 homes. I am very familiar with the areas you would be looking at and happy to assist.
0 votes Thank Flag Link Tue Jun 23, 2009
The previous posts are accurate. The loan market is really tough for upper end buyers. I'm personally seeing the homes under $600k moving since buyers have enough down payments to reach conforming loan limits. Inside the beltline, the area you mentioned, is tough at that price range. There are a few foreclosures that were selling for $800k+ that have dropped to under $600k now.

It's all about taking your time, looking in the right spots and the willingness to look in some other areas that are negotiable. A mile or two can make a HUGE difference is the homes that are selling under market value.
0 votes Thank Flag Link Tue Jun 23, 2009
The section of the market where the buyers have the most power is the high end, i.e. above $500,000. Affordable homes in good areas are selling well, and the days on the market are not that long. For example, homes under $200,000 in Cary and North Raleigh sell well with the sellers having the advantage.

Since you are looking in a luxury price range, you will have some bargaining power. However, Inside the Beltline, close to downtown, is a special world where the home values hold up well.

Our number of sales is down, and the median prices are down. But the median is the middle price, so all that is telling you is that more homes in the affordable range are selling than in the luxury range.

I have just written a book on real estate negotiating, Create A Great Deal, the Art of Real Estate Negotiating. Take a look at it on Amazon. I think what you are looking for is someone who understands real estate negotiating, which I do. I am also involved with the Certified Luxury Home Marketing Speicialist designation, so I know this part of the market. My email is tim@TimBurrell.com if I can help.

It is a good time to buy in that price range.
0 votes Thank Flag Link Tue Jun 23, 2009
Ken,

The market conditions are weak in that range due greatly to the spread on JUMBO loan rates.
If you are looking at new construction, you can get very good value compared to a year or two ago, as many builders of custom inventory will sell at cost just to get out from under the note.
That said, when a property does sell, there is no new inventory hitting the market to replace it. Spec builds in your price range are nearly non-existent.
If you are looking at resales, and historic homes, bear in mind that they may well be elective sales with a less motivated seller, reducing your leverage on their need to sell.
Web Reference: http://MikeJaquish.com
0 votes Thank Flag Link Tue Jun 23, 2009
Hi, Ken - congrats on your decision to move to our area. While it's true our local economy is not as strong as it was a year ago, we're faring better than most areas during the downturn. A report out just this morning forecasts the Triangle area to double in population by 2025! That price range is the higher end of our market and it has activity in that range has softened significantly. Each seller's situation is different, of course, but those that have to sell are feeling the pinch thereby increasing buyer's bargaining power. I'm happy to send info on homes in that range and recent sales activity, if you'd like. We lived in the Northeast for years and the move to NC was a great move for my family - I hope it is for yours, too!
0 votes Thank Flag Link Tue Jun 23, 2009
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