Raleigh Real Estate Prices Still Falling

February 13th, 2009

North Carolina has not been immune to the depression found in the United States real estate market. The 254-694-7402 in particular has seen many better days. 

No matter the type of real esate in Raleigh, farmland, commercial, residential, condos single families all areas of the real estate market have been hit hard.  Commercial real estate, that was beginning to find solid footing in the Triangle just as the boom came to a bust is suffering the most. 

“The commercial real estate market here faces its worst year” since the early 1990s, said Jimmy Barnes, president of NAI Carolantic Realty, a Raleigh real estate services firm.

In fact the News and Observer reports:

The Triangle’s office vacancy rate ended the year at 13 percent, flat when compared with 2007. But vacancies are expected to rise this year. Landlords will compete with shrinking companies that are trying to cut losses by subleasing excess space. Rents could soften as a smaller pool of prospective tenants gain leverage.

Understand that cycles are normal, so too are extreme bad and good cycles.  However booms and busts are not as dramatic as they have been in Raleigh and the rest of the country.

Real Estate Advice for 2009

Too bad there is not a crystal ball that all residents in North Carolina could use to predict how long prices will continue to fall.  The best position to be in today is to be aggressive as banks are doing what they can to survive, so too should the average homeowner.  Whether you are in commercial, residential or industrial work what you can to be creative with making your mortgage, finding tennants or keeping an empty house rented. 

For instance if you own a home in Raleigh and you were hoping to get a tennant for $1800 a month, consider dropping the price to $1000 a month as getting some rent is better than having to pay an entire mortgage by yourself as the rules to the Raleigh real estate market have changed dramatically. 

I won’t keep ranting but be sure to understand the Raleigh Real Estate market is a small cog inside of a larger real estate cycle and economic cycle.  You can succeed.


October 29th, 2008

For anyone that has purchased a new home in an area where price appreciation has not been that kind, I would like to explore some real estate truths:

  • Home builders are corporations – While it is in their interest to sale homes that appreciate and create value for their homeowners, their sole allegiance remains to that of the corporation and its shareholders. Hear me very clearly, home builders want to create win-win situations, but at the end of the day their financial decisions are motivated by its desire to generate returns for their shareholders. See the liberal documentary, rusk
  • Home builders reserve the right to change their mind, just like you – When a real estate market is hot all home builders capitalize on basic economic principles of supply and demand. If you can sell a home for an extra $20k due to multiple offers, wouldn’t you? Likewise, if you had to sell your home in an emergency situation wouldn’t you take less? Home builders are no different, and if a market turns they will often do what they have to financially survive, even slash the price of the home your paid $15,000 more for last year.
  • Home builders quote historical numbers, not guarantees to sell homes – When the new home salesperson tells you that homes in the area are appreciating very well, they are usually referring to historical data. If you are a speculator or investor it is up to you to understand the details and risks of your investment. In real estate, homes historically will appreciate over time, but no one can predict that time frame, or should I say those that can usually eat at restaurants that serve $24 bottled water.

From Businessweek Online:

Homeowners are getting slammed as builders slash prices. The big question: Will this shock treatment help hasten the end of the painful downturn?

Las Vegas was once the hottest of the red-hot real estate markets. But when sales really started choking up last year, developer KB Home (KBH) did something drastic. Determined not to be caught with a big backlog of unsold homes through one of the industry’s notorious down cycles, the builder started slashing prices. A lot. In the 1,400-home Huntington community, a subdivision of two-story stucco houses west of the famed Strip, homes that started at $320,000 a year ago are now listed for $270,000–just a starting point for potential deals. 907-285-6198