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A House, A House, my kingdom for a house...

by Cynthia LaChapelle

Want to buy a single family house in this area? How many bidding wars have you been on the losing side of trying to get an average home of an average price? Why is this happening, and when will it end?

The big story in our current market is how hot the market really is. Prices keep rising as inventory levels keep decreasing. Boomers aren't selling and builders can't make up all the slack.

Supply and Demand

It's a Catch-22 that the Boomers don't sell, because there aren't enough homes to move up or down into. Add that the new home builders got behind in production during the downturn last decade. However, now that they are building again, they are building higher priced homes.

The Triangle area just hit a historic high sales price - an average of $303,000 for our market, according to Stacey Anfindsen. He is a long time appraiser and provider of market statistics to the Triangle MLS, author of the TARR report and acclaimed expert on local market data.

Anfindsen says that annual prices usually peak around the beginning of the third quarter and dip in the fourth. The average price could stay above $300,000 for the first time.

Builders have starting prices for single family homes from $400,000 in much of the Triangle, and that does mean starting price. You expect upgrade charges, but I've noticed that many of the new homes I'm selling now have an added price of tens of thousands of dollars for every lot. Nothing is included.

 Below that price point is generally townhomes and condos. The inventory of townhomes and condos increased by double digits over $199,000, due in large part to the new construction. Most of that construction is now hitting the $250,000 and up buyers.

Conventional Loan Limits

Those wanting a new single family home have a second problem. It can be more difficult to get a loan above $424,100. These "conventional" loans are packaged and sold on the secondary market (think Wall Street) so the lenders' source of funding is constantly replenished.

 

Most counties have a maximum mortgage limit of $424,100 for a single family residence, ($543,000) for two units, ($656,350) for three units & ($815,650) for four units. These limits are applicable for purchase and refinance mortgage loans.

It's generally easier to get a conventional loan. Fewer buyers are eligible to buy homes the further you go above the $424,1000 limit.  

That circles back to supply and demand. Offsetting the loan limits is that builders are providing a supply of single family homes. The effect is a slight softening of the higher priced resale homes, because the builders are tapping into a limited market of buyers. 

New House Blues

by Cynthia LaChapelle

New House Blues

I recently closed a new construction sale here in Cary that had some interesting twists at the end. I had made several offers for the Buyers over the Fall and Winter. It's a very hot market,  and we had gotten none accepted. Then we spotted an inventory/spec home that a large builder had. It was a great deal, but I had still negotiated a bit more. 

The home was nearly finished when we went under contract. It needed things like flooring, paint   and finishing touches. The problems came when the house wasn't finished to acceptable standards. This was a $500,000 home, and while it wasn't custom, the builder had done a vastly better job for me with another client only a few months earlier. Many items were unacceptable. Among the worst things was wavy sheetrock, imperfections in the mirrors, the tile grouts were mismatched due to repairs, paint and sheetrock that had been marked for repair in the walkthrough hadn't been redone, and the most unsightly thing was the stainless steel range vent that rises to the high ceiling was bent. This was after one repair attempt.

We had noted all these things along the way with the supervisor. We'd had an inspection done, and not all of those items had been finished.  As we noted repairs from Day One, he'd said that he would do what he could, but not to expect everything to be done. He had about six stock answers to say no to our requests that he rotated through. I nicely refused to agree.. one, two, three through six times. My theory is if you can't say yes, let me find the person who can say yes.

This went up to the minute of the final walk-through. There were too many items that were undone, dirty and just not right. There were paint flecks all over the floors, carpets were dirty, and the wife was unhappy. We all know the adage, "If Momma's Not Happy, Nobody's Happy." I must make her happy.

This wasn't OK. The Buyers and I discussed this with the supervisor well past our allotted walk-through time. I got as many concessions as I could from him and gave the Buyers their options. I went to the sales office, but the onsite agent wasn't there. The lender was, so I got him involved. I got the closing attorney involved. Then we went up the food chain to the main office. I sent pictures and said we may not be able to close. We went to the attorney's office unsure of what we would end up doing

I finally got an executive to put into writing that all the Buyers requests would be done. He gave us his word, and we closed. They got a new stainless steel range vent, new mirrors, fresh paint everywhere, a deep cleaning, and everything on our list done!

The Buyers asked what happens when other buyers have these problems. I'm not sure, but I can guess. How many times were they told that this is normal, just accept it? Dozens...each time. How long does it take to wear a Buyer down in a stressful situation where they don't know the rules? A lot less than that.

I was well rewarded for my effort, because the Buyers were really happy with my service. He even told my husband that he could never have talked to them like that. That means I did my job. "Clients Are Protected" is my motto and my mission.  

 

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