Once again, media has taken the opportunity to use scare tactics with consumers. While the national housing market may be less than favorable the local Triangle area housing market has continued to consistently stay ahead of the trend as evidenced by an article from Stacey Anfindsen with solid statistics from the Raleigh Regional Association of Realtors®.
For the N&O article in full please click here. And, here is the response.......
Responding to the News & Observer:
Stacey Anfindsen Shares More Accurate Depiction of Market and Five Reasons Not to Panic Over Local Home Prices
In response to the main headline in the 10/27/08 N&O, I am presenting facts to contradict
the headline, which is yet another attempt to scare local readers by using data from selected national sources. The writer states five reasons; crashing home prices, investor speculation, complex investments, job losses and repeat delinquencies. I will respond to each of these to provide some local perspective.
1) When analyzing our market, I look at data from the counties of Wake, Durham, Orange and Johnston. Within this market, the average closed price of all housing is up 8% and the average closed price of resale housing is up 6%. House price appreciation, which compares the two most recent sales prices of the same house , is an area where the Triangle outperforms the national market. Our current rate of house price appreciation in the Triangle is just over 4%. This rate beats the state (+3.6%) and national rates (-4.5%).
2) The Wake County Revenue Department reported +/- 21,000 closed sales within the past 13 months. Roughly 5% of these sales were purchased by buyers from out of town, a huge difference compared to the 20% rate nationally.
3) It is almost impossible to track what percentage of local purchases were made via the subprime loan mechanism. Per the FHFA mortgage metrics survey for the second quarter of 2008, 17% of all outstanding mortgages in the U.S. are rated as subprime. Therefore it would be hard to argue that a majority of house purchases were made via this mechanism.
4) Job losses are real both nationally and locally. The Raleigh/Cary/Durham MSA did not have a workforce increase comparing 8/08 with 8/07 for the first time since the 8/01 versus 8/00 period.
5) The mortgage metrics survey reveals some additional information regarding the national mortgage market. They surveyed over 30 million outstanding loans in the Fannie Mae and Freddie Mac system and found that 98.6% of these loans were rated as current. They also state that foreclosure proceedings were initiated on 432 homeowners per day during the second quarter, a big difference from the 2,700 per day figure stated in the lead paragraph. There are currently +/- 14,000 listings within the four county area in TMLS. Roughly 3% of these listings are classified as foreclosure, bank or corporate owned. I have been tracking the residential market within the Triangle for over 20 years. The foreclosure market has always accounted for a very small percentage of activity. Our current market can be summed up with my version of the good, the bad and the ugly;
The Good
- Third quarter closings were the 6th highest in history
- Current supply of 8 months is lower than national current supply of 11 months
- Average house price appreciation is superior to state and national rates
- Average re-sale sales price +6%, average overall sales price +8%, average list price +2%
- Houses priced correctly have sold in an average of 55 days
The Bad
- Overall inventory grew 7%, making 2 consecutive months of less than 10% growth
- Withdrawn listings increased 2% compared to 9/07
The Ugly
- 29 consecutive months of inventory growth, 20 consecutive months of lower pending sales
- 63% of all price points have an oversupply of housing product
- 9/08 expired listings were 227% higher than 9/07 expired listings
A survey of Wake County house purchases where the house was purchased and then re-sold within the past 12 months reveals a median percent per gain of 0%. I think that is pretty impressive compared to what is happening in the national market.
As we have seen during 2008, our local market is not immune from happenings in the national
market. Our biggest challenges during the fourth quarter of this year and into next year are to grow the workforce and cut down on the number of price points with an oversupply of housing.
I, for one, am thrilled with the response and also extremely proud of my local association for taking a stance and saying, "Enough!" It is time that the media stop lumping the entire country together and start realizing that housing markets are LOCAL. The Raleigh Regional Association of Realtors® has taken a step that I can only hope will be followed by other regional associations.
Written by:
Leesa L. Finley, Broker, Realtor®
Circa Properties
919.649.6128 - direct and txt msg
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Circa Properties
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Leesa - thanks for sharing the statistical information from Stacey Anfindsen. His entire life revolves around a third-party, neutral observation and evaluation of real estate statistics.
One more thought - the headlines have made a big deal about national home prices being down significantly in September.
There is one big reason for that - the official "downpayment assistance" programs ended on September 30th. There was a huge push in the month of September to sell homes with these programs - most of which were entry-level, lower priced homes. Thus the number of homes sold was higher, and the average sales price was lower. This is NOT an overall downward trend in home prices, though on a national level prices are lowering. This statistic is the result of more lower-priced homes sold in one particular month, which will be an anamoly.
Penny - Thank you so much for your contribution to this post! Your insight into the "overall downward trend in home prices" is spot on and much information that is out there has been taken out of context!
Leesa,
We have been working for over the past 2 years to keep this message, "All Real Estate Is Local", in front of our region. Just one more reason I try to post as often as I can our local stats, that way folks can see for themselves what is going on and not have to be fed National Averages.
I applaude RRAR for taking a stand and say keep up the good work. Keep up the good work.
Leesa - very nice layout of the market for your clients and prospectice clients. Hoping the Good starts getting longer and the bad and ugly starts shrinking