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Yes Virginia, This is a Seller's Market...

by Cynthia LaChapelle
If you are in the right place and prepare your home properly
 

The market switches between being a Seller's market and Buyer's market at six months as average time listed on the market. You may know that we entered a seller's market in most parts of our area last year and earlier. You also may have heard rumors recently about bidding wars and houses selling on the first day that they hit the market. Both are true. (By the way, when a house shows a house was listed 2-5 days on the MLS until pending, that usually means that it took that long to negotiate which buyers to take, the final price and get it in the computer.)

The biggest surprise is that the market heated early - in mid-January. That is well ahead of the usual Spring bump in the market. Showings normally are the highest numbers in March and April, followed by the highest number of closings in May and June. (It often takes 30-60 days to complete escrow.) I have been involved in several multiple bidding wars this year in the western wake county area. We're past trying to negotiate the best deal in most instances. We have moved into the market where the broker's job is to be able to get the house for the buyer. I've lost houses because we showed up on Day 2 and others because we didn't bid high enough above List price. Register here to have custom listings emailed to you as they appear on the market http://www.buywakecountyhomes.com/

One caution to the person who is thinking about selling, however. Most of the houses that are sought after and fought over have been put into beautiful condition. They are freshly painted, usually have new or newer carpet, updated kitchens and baths and very little (if any) brass. Often the buyers ask if the sellers are still living in it. The ones that are dirty and need work will still sit a while. They won't usually have more than one offer at a time, which is the way that sellers get higher than list price. People don't want to buy your dirt and mess.There are numerous resources available if you want to know how to fix up your home for sale, including a number of articles on our website.  Interested in getting an idea of how your home compares to others in your neighborhood?  Check out this website http://www.sellingwakecountyhomes.com

However, beware of whether or not you can get the house to appraise in a rapidly rising price market. Houses in short supply go for higher prices than when the buyer has his pick of homes. Most appraisers want to value the homes at least where the buyer has paid, but they do have constraints put on them by the banks who have hired them. (They work for the bank, but are paid by the buyer.) Different types of loans and different mortgage companies put varying restrictions on the appraisers. They do use past data, which will be lower in a rising market. Whether you are a buyer or seller, it is wise to remember that when you win a bidding war, you will still need to be cognizant of the possibility of a low appraisal. The bank will lend only on the amount of the appraisal, not the sales price.

Takeaways:

  • Buyers need to watch for new listings closely and view them immediately
  • Sellers need to spend the time and money to make their homes market-ready
  • A properly prepared home will sell very quickly at a good price
  • Be cautious of appraisal amounts. The buyer may or may not be willing or able to come up with the extra down payment.

May/June 2014 Housing Market Overview

by Cynthia LaChapelle

Our Triangle housing market is leaving a lot of the country in the dust. Whatever you've heard about other parts of the country, forget about that when you come here.

An already strong real market in the Triangle continues to improve. The number of properties on the market has been one of the areas of most concern  due to a shortage of properties to sell, but the number of properties is increasing. 4585 properties were on the market in the Triangle MLS in May, up 8% from last year.

Pending and closed transaction continue to rise. Year-to-date Pending Sales were 12,579. This was up 5.9% over 2013 YTD. There were 3189 closed transactions in May and 11,587 YTD. These numbers are up 2% for the month and 2.8% for the year.

Days on market has continued to drop to an overall market average of just 93. A market has equilibrium at a six months supply. Less than six months denotes a Seller's market, and more than six months denotes a Buyer's market. We currently have a 5.9 month supply.

Sales prices continue to increase. The average sales price in May was $246,293 and the YTD average was $240,291.

Sales prices are very close to list prices and rising steadily.  May sales were 96.4% of original list price and  95.6% YTD. When including price reductions, sales prices were 97.8% for May and 97.4% YTD of final list price.

Our housing affordability index, though dropping, is still good. This index measures housing affordability for the region. An index of 120 means the median household income was 120% of what is necessary to qualify for the median-priced home under prevailing interest rates. A higher number means greater affordability. Ours is 155 YTD and 147 for May.

Our numbers at LaChapelle Properties June 1 2013 to June 1 2014 are even stronger. Our average sales price has doubled, and our volume of sales has more than doubled. We hit a new high sales price of $1.59 million for one home and added four new brokers.

This report uses figures and data from the Triangle Multiple Listing Service and provided by Stacy Anfindsen.

Western Wake County Market Activity

by Cynthia LaChapelle

Single Family Homes in Short Supply

If you're coming from another part of the country that still has a depressed market, get ready to be surprised. Except for the highest price points, we are in a seller's market in many parts of the Triangle. The real estate market is heating up in general, and the western part of Wake County is just plain hot. We don't have many distressed sales, we do have people who buy homes for cash, and in Western Wake County we have a shortage of properties for sale.

The Cary, Apex, Morrisville area averaged a two-month supply of homes in inventory  for all of 2013, and the South Cary, Holly Springs, Southwest Wake averaged a three month supply. The market is even hotter than it sounds for most properties, because that includes the high priced/luxury  homes that sell more slowly. (The term "supply" means how long it would take to sell everything listed if nothing else were put on the market- also called the absorption rate. )

The break even point is between a Buyer's and Seller's markets is six months.  So a five month supply would be just into a seller's market,and seven months would be just into a buyer's market.

The under $300,000 price point is very important. The 2013 average closed sales price in the Triangle MLS system was $246,700 for new and resale homes combined  and $231,000 for resale homes only.  Homes in this price range are in short supply.

Cary, Apex, Morrisville (CAM) averaged only a one-month supply of homes under $300,000 for all of 2013, and South Cary, Holly Springs, Southwest Wake (SCHSSW) averaged a one-month supply for homes under $150,000 and a two-month supply for homes $150,000-$300,000. The Average Days on Market for all price points for these two sub-markets were 78 and 86 days respectively.

This shortage eases slightly as prices increase. CAM had a 2-3 month supply and SCHSSW a 3-4 month supply in the $300,000-$600,000 range.  The numbers climb to 4 months for CAM at 600,000-$800,000.

The first Buyer's market numbers don't appear until above $600,000-$800,000 in SCHSSW - with a seven month supply. Both sub-markets are back into Buyer's territory at prices above $800,000 with seven and nine month supplies respectively.

Foreclosure Sales Down, Cash Sales Up

There are a couple of more interesting notes about our market that might surprise you. A lot of transactions are all CASH. People are not taking mortgages to buy these homes. In fact, 20% of all TMLS closings 4th quarter were cash deals. Be very aware if you are advised that you can pick up a property for cheap if you can pay cash, because that will impress someone.  One in five of our transactions already are cash.

Who are they advising you to impress? Foreclosures and other kinds of distressed properties top the list.  Again, if you are coming from another part of the country that has a lot of distressed property,  our market is different. Listings designated as distressed in our MLS dropped from 10% in 2012 to 7% in 2013. Think about that a minute. There are almost three times as many people already paying cash outright for property in the Triangle as there are distressed sales combined.

My last point is how critical it is to price your property correctly from Day One. You will get a higher sales price statistically if you hit the sweet spot of the market. Properties priced correctly initially sold for an average of 98% of original list price in 61 days average. Properties which had to reduce their price sold for an average of 90% in 161 days average. In addition to the difference in sales price is the added cost of over three months of extra mortgage and other expenses.

Data was compiled from Triangle MLS by Stacey Anfindsen of Birch Appraisal Group, Cary. While deemed accurate, they are not guaranteed.

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