Real Estate in Durham with Sidetrips to Chapel Hill and elsewhere in the Triangle
Last week, the Triangle Multiple Listing Service released its analysis of the Triangle housing market. Overall, it’s a lot like my own analysis — listings are down, but sales are up — by a lot in Durham and Wake Counties. For those of you who can’t get enough of numbers and analysis, here are the links;
Last month the federal Housing Finance Agency [which oversees Fannie Mae and Freddie Mac] sent out a Request for Information looking for ideas on how to deal with the excessively large inventory of foreclosed homes held by Fannie Mae, Freddie Mac and the FHA. I sent my response off this evening and thought it might be a good springboard for discussion. It’s a bit long, but here goes;
[Here's the full RFI -- Request for Information - Enterprise/FHA REO Asset Disposition]
Last month the Federal Housing Finance Agency [FHFA] announced a request for information looking for new ideas and ways to reduce the inventory of foreclosed properties held by Fannie Mae, Freddie Mac and the Federal Housing Administration. In that RFP, you stated the following objectives:
- reduce the REO portfolios of the Enterprises and FHA in a cost-effective manner;
- reduce average loan loss severities to the Enterprises and FHA relative to individual
- distressed property sales;
- address property repair and rehabilitation needs;
- respond to economic and real estate conditions in specific geographies;
- assist in neighborhood and home price stabilization efforts; and
- suggest analytic approaches to determine the appropriate disposition strategy for
- individual properties, whether sale, rental, or, in certain instances, demolition.
Additionally, FHFA expressed a willingness to consider a variety of options including lease-purchase agreements and rental arrangements.
I appreciate FHFA’s willingness to explore different approaches to reduce their large inventory of properties. There is, however, no need to reinvent the wheel. There are thousands of real estate investors eagerly waiting to purchase those properties, rehab them and return them to the market either as rental property or through some form of sale – lease option, seller financed purchase and so on. Unfortunately, there are several obstacles placed in front of the real estate investor when they attempt to purchase government owned property. Some examples of these obstacles are:
- Getting financing is especially hard for an investor. FHA could help by streamlining the process for FHA 203b and 203k loans. This would be especially helpful in selling properties which require large amounts of work to be habitable, a common problem with foreclosed property.
- HUD and other government agencies have 30-day preference for owner-occupants. Reducing or removing this preference would allow investors to purchase properties faster and get them off the government’s books.
- HUD and other government agencies have a rule requiring buyers own the property for 90 days before selling it [the "anti-flipping" rule]. reducing or eliminating this requirement makes properties more attractive for investors and would speed the sale of these properties.
- Both Fannie Mae and Freddie Mac have limits on how many mortgages an investor can have. Increasing or removing these limits would help investors obtain financing to purchase more government-owned property.
Removing these obstacles and actively encouraging real estate investment would cost the government almost no money, but would vastly increase the ability of investors to relieve the government of it’s excess property inventory, which would stabilize the housing market.
Thank you for taking the time to read my proposal.
What do you think? Would easing the restrictions on real estate investment spur a housing recovery? Or is there a better way? I look forward to hearing your comments.
So far, the summer months have been very good to the Durham housing market. Let’s see if August can keep up the pace.
For all of Durham County there were 2,081 homes listed for sale at the end of August – another decline of over over 100 listings. August saw 277 contracts close, a gain of 20 closings. Using August figures, it would take 7.5 months to work through our current inventory which puts us almost back to June’s numbers. An adsorption rate between six and eight months is generally considered a balanced market, so overall Durham is in pretty good shape.
In South Durham 735 homes were listed for sale at the end of August – another decline of 69 homes. 91 sales closed in August, a drop of 12 closings. It would only 7.6 months like August to work our way through all the available homes, which, as I noted above, puts South Durham firmly in the balanced market range.
Here’s the updated neighborhood information, with some of our new neighborhoods.
| Total Available Listings | Total Closed Sales | Adsorption Rate [in months] | Avg Sale Price | |
| Woodcroft | 59 | 9 | 6.6 [-0.8] | $180,711 97% of list price |
| Hope Valley Farms | 61 | 9 | 6.8 [-3.2] | $217,444 96% of list price |
| Woodlake | 19 | 5 | 3.8 [-1.0] | $203,500 96% of list price |
| Parkwood | 24 | 2 | 12.0 [+5.7] | $131,500 87% of list price |
| Chancellors Ridge | 19 | 1 | 19.0 [+13.0] | $299,980 100% of list price |
| Grandale | 3 | 2 | 1.5 [-1.5] | $279,500 96% of list price |
| Audubon Park | 13 | 2 | 6.5 [-5.5] | $210,500 99% of list price |
| Falconbridge | 14 | 2 | 7.0 | $171,750 95% of list price |
| Fairfield | 14 | 0 | N/A | N/A |
| Lochside | 9 | 0 | N/A | N/A |
| Marydell Estates | 2 | 0 | N/A | N/A |
[Remember how Penrith had 4 closings in July? Zero in August]
August continued the pattern of solid summer sales. Most importantly, as homes sold in August [and June and July], more sellers did not step up to replace them. This allowed us to work down some of that inventory and keep adsorption rates and prices fairly strong. The real notable exception to that is Parkwood, which is continuing its string of terrible months. I still believe that things will improve in Parkwood as the Revere Road construction winds up, but there is a lot of recovery to do there.
What does the future hold? Well at some point this Fall we will see sales drop off and the market settle towards its winter slumber. That might happen in September, although October is more likely
There is still time, but not much, to take advantage of this improved homebuying season. If you are interested in seeing how your home would fare on the market, or just want to see some of the homes available, please send me an email and we’ll gladly get started. See you
in October.
With Irene working her way up towards New York, it’s time to step outside, take a look at the fallen branches and stop by one [or several] open houses! Here is the schedule for today’s Open Houses on the listings we’ve highlighted here at Bull City Real Estate.
 |
From 1-3PM today, stop by 100 Settlers Mill Road. This beautiful home is 2400 square feet of space just minutes away from Southpoint Mall, I-40 and Chapel Hill. Listed at $197,200 this is a great value for your home investment |
| From 2-4PM today, we’ll also be at 5508 Grand Mesa Drive. This beautiful home features an open sunroom and a landscaped backyard with a koi pond. Listed at $155,000, this home is a great balance of seclusion and quiet. |  |
 |
Finally, from 3-5PM this afternoon, we’ll be at my new listing 3218 Oxford. This 4 bedroom home is tucked away in University Estates – a nice quiet community just north of Martin Luther King Parkway. Listed at $115,000, this is a great value for someone who needs a little space, but needs to be close to everything. |
When you are out and about this afternoon, I really hope you will join us at one of our events.
I wanted to introduce you to my newest listing. this great home in University Estates has all the quiet and seclusion of living in the country, but is just minutes from Duke, Southpoint and RTP! With 4 bedrooms and almost 2,000 square feet of space, this is a great home to expand into. Plus, with a list price of only $115,000, it’s a great bargain!
Hit the link for more details on this great home.
We’ll be holding an Open house to celebrate this new lsiting on Sunday, August 28th from 3-5PM. We’d love to see you then, or if you can’t come out them, call or email me and we’ll arrange a showing.
Photo credit - alh1 & Flickr
The Homestead Act, passed in 1862, was one of the pivotal moments in the settling of the West. In the Homestead Act, settlers were offerered up to 160 acres of land provided they farmed the land for five years and made other improvements to their homestead. Through this Act, much of the western Great Plains was settled.
With the turmoil in today’s housing market, prehaps we need something as expansive as the Homestead Act to set things right. along those lines, Rep. Gary Ackerman [D. - NY] announced on Wednesday that he will introduce “Homestead Act 2″ in an effort to “reduce the housing glut and put Americans back to work.” Rep Ackerman’s bill has two parts;
The combination of these would, in Rep Ackerman’s opinion “spur the traditional housing market as the existing inventory overhang of housing is depleted. Over a million workers would be productive again.”
Would it work? Well, I see several advantages to this plan. First of all, by making the $20,000 a subsidy, it avoids the problem of the First Time Homebuyers Credit — that the money was needed at closing, not several months later. secondly, by making it a matching subsidy, it would encourage larger down payments, which will put the overall housing market on a firmer foundation.
Finally, I like the fact this bill recognizes that investors are a key part of pulling the market out of the doldrums. Too often investors have been seen as part of the problem, not part of the solution.
Representative Ackerman intends to file this bill after the summer recess. While the devil usually hides in the details, I hope Congress seriously looks at this legislation.
[Click here for Representative Ackerman's press release]
Over the past couple of weeks, I’ve had the opportunity to be a resource for a couple of local news articles;
When The Landing at Southpoint announced they were auctioning off their remaining condos, [7/13/11 - 751 South developers to auction condos] Ray Gronberg of the Herald-Sun asked if there was more behind the announcement, such as an imminent foreclosure [there isn't that I am aware of]. I explained that condos are a very hard to get financed, and therefore sold, in the current mortgage market and that the auction was probably just a move to generate a return on a product that was largely unsellable. “The farther away from dirt you get, the more difficult it is to finance.”
Last week, Monica Chen noted that developers were in the early phases of planning a townhome development along NC751 just south of Southpoint [8/5/11 - Florida Developer Files to Build Townhomes in Durham (subscription required) ]. Much of what I said was edited for space, but I hope to develop those thoughts in a later post.
If you are interested in real estate development is south Durham, please call of email me. I’d love to hear from you!
Earlier this week, I was reminded that I have not posted anything about my new listing. Let’s fix that.
100 Settlers Mill Lane is a beautiful home right at the entrance of Settlers Mill, which is just west of Parkwood. it’s a nice large 2400sf home with 4 bedrooms and 2.5 baths. It lets in lots of light, especially in the kitchen and family room. The bedrooms are also nice and large with the master bedroom having a roomy bath.
Listed at $197,200 this home is a great value. It is a HUD foreclosure, and it does need some work, but it is almost entirely things that can be done over time while you live in the property. Also, this listing qualifies for a special promotion where you can purchase it with a $100 Down Payment!
If you would like to find out more about this great property, please email me. Or you could come by and visit during my Open House this Sunday from 1PM – 4PM. I look forward to seeing you!
CNBC published a slideshow earlier this week — 10 Cities Virtually Untouched By The Housing Bust. It’s a quick overview of several small towns that have been little affected by the housing bust. Durham is #8, which is something to crow about [Fayetteville is #1].
It’s nice to get good press, but I’d like to see this analysis taken to the next level. The CNBC piece has the “change from national peak,” which is their attempt to track how far that market has fallen since the summit. I’d like to see someone compare that to how far that market rose during the housing boom. I’m pretty certain that most of these markets didn’t see a big rise during the boom, didn’t have an overheated housing market, and therefore didn’t crash. I know that is true for us, and probably Fayetteville – I can’t speak for the rest of those markets.
BTW, if you don’t like slideshows, a more readable list is at Agent Genius.
June was a good month for local real estate. Will July follow in its footsteps? Let’s find out.
For all of Durham County there were 2214 homes listed for sale at the end of July – an decrease of just over 100 listings. 257 sales closed in July, a drop of 90 closings. Using July figures, it would take 8.6 months to work through our current inventory which is an increase of 1.9 months. While this is a step back from June’s red hot numbers, it still puts the county in a pretty balanced market [OK, technically it's 0.9 months in a buyer's market, but compared to some of the months we've seen, I think you will forgive my optimism]
In South Durham 804 homes were listed for sale at the end of July – another decline of 68 homes. 103 sales closed in July, a drop of 44 closings. It would only 7.8 months like July to work our way through all the available homes, which, as I noted about, puts South Durham firmly in the balanced market range.
Here’s the updated neighborhood information, with some of our new neighborhoods.
| Total Available Listings | Total Closed Sales | Adsorption Rate [in months] | Avg Sale Price | |
| Woodcroft | 74 | 10 | 7.4 [-7.4] | $155,983 97% of list price |
| Hope Valley Farms | 70 | 7 | 10.0 [+6.1] | $177,986 96% of list price |
| Woodlake | 24 | 5 | 4.8[-0.6] | $203,500 97% of list price |
| Parkwood | 25 | 4 | 6.3 [+3.6] | $131,500 98% of list price |
| Chancellors Ridge | 24 | 4 | 6.0 [-0.0] | $300,875 98% of list price |
| Grandale | 3 | 1 | 3.0 | $320,000 97% of list price |
| Audubon Park | 12 | 1 | 12.0 [+2.0] | $205,500 97% of list price |
| Falconbridge | 15 | 0 | N/A | N/A |
| Fairfield | 15 | 1 | 15.0 | $327,000 99% of list price |
| Lochside | 12 | 0 | N/A | N/A |
| Marydell Estates | 2 | 0 | N/A | N/A |
[Neighborhood to watch: Penrith had four closings in July]
So, what are we seeing here? As you may remember, a wave of listings entered the market in March and April. Buyers followed sellers into the market finding homes and closing on them in May/June. closings then subside a little bit during the heat of the summer with another swell after the heat breaks — late August through early October. It’s been a while since we’ve seen it, but this is a normal annual market cycle. Feels good, doesn’t it?
There is still time to take advantage of this improved homebuying season. If you are interested in seeing how your home would fare on the market, or just want to see some of the homes available, please send me an email and we’ll gladly get started. See you right before Labor Day.
