Last Minute Budget Deal Sells Out North Carolina Homeowners

As North Carolina State House and Senate Members grew weary and left to start their summer vacations, homeowners across the state got the short end of the stick. To wrap up session, the members struck a budget deal. Included in the arrangement was authority for all counties to place a .4% transfer tax and a 1/4% sales tax increase on their respective county ballots. Although most legislators stood firmly against such a land transfer tax, proponents of the tax made a strong argument for letting voters decide. NCAR and a coalition of groups fought off four statewide transfer tax bills and eleven county bills.

According to Wake County Manager David Cooke, there are no plans right now to place either question on the ballot in 2007. Durham and Chatham counties are expected to beat us to the punch with a ballot measure to include the transfer tax this fall. However, county officials may be shocked to discover that polling shows between 74-80% of likely voters oppose the transfer tax. The numbers only decline slightly when tied to school construction needs.
Although the Wake County Commissions have historically supported the sales tax as a more equitable taxing measure (that allows the capture of transient dollars), Commission Chair, Tony Gurley indicated that he would like to see both questions on the ballot.

By Raleigh Regional Association of Realtors News

Triangle Real Estate Market Update

Are You Considering Buying a Home in the Triangle Area of North Carolina?

The Triangle Real Estate market continues to be a Seller’s market with increasing appreciation of property values. Home building continues to be very active with no indication of slowing down.

The Triangle is made up of Raleigh, Durham and Chapel Hill. All three of these areas are very distinctly different communities with their own individual personalities. If you are planning to purchase a home in the Triangle area you may want to evaluate each area to see which of the communities fits your lifestyle and the needs of your family.

Many people are relocating for employment in the Research Triangle Park (RTP). There are also a large number of people retiring to the Triangle because of the quality of life and access to health care.

Real estate prices in Chapel Hill are the highest per square foot of the three areas. Raleigh and Durham home prices are comparable to each other. Chapel Hill home prices are averaging around $280,000. Raleigh’s average price is around $260,000.

Rising Mortgage Rates contribute to Real Estate Slowdown and Rising Inventory

For the last six to nine months, home builders have been hit hard as rising mortgage delinquency rates have made lenders much more reluctant to issue new loans, causing home purchases to fall and inventories of unsold homes to rise. In June, new-home sales had fallen more than 40 percent from their peak two years ago, and more than half a million new houses- nearly eight months of supply- sit in inventory, according to the most recent report from the National Association of Home Builders. Contract cancellations, meanwhile, have hit nearly 30 percent for some home builders.

Raleigh’s Inside the Beltline (ITB) and West Raleigh are the area’s with the highest current supply (12 months). Cary/Apex/Morrisville (CAM) is the area with the lowest current supply (4 months).

Things may not get better for a while. The National Association of Realtors said that new home sales this year were likely to fall 19 percent from last year, worse than its previous forecast of a 17.7 percent drop. First quarter ’07 the new construction market in the Triangle area recorded negative sales growth of almost 4% compared to 1st quarter ‘06.

The latest survey taken by the National Association of Home Builders indicates that 56 percent of builders are now offering incentives, up from about 45 percent a year ago.

And those incentives are growing bigger.

Anxious Home Builders Pile on Incentives to Attract Home Buyers.

With the housing market looking increasingly frail, home builders and real-estate agents are going to new extremes to attract buyers, dangling lavish incentives and slashing prices.

While the Triangle area, which includes Raleigh, Durham and Chapel Hill, is not affected by the housing market downturn in the lower price ranges below $400-500k, the inventory of homes above $500,000 is experiencing some of the national slowing trend.

In Raleigh, North Carolina home builders are offering to pay two years of property taxes and insurance- worth as much as $150,000 on houses priced as high as $2.5 million- for buyers of completed homes in upscale areas of Research Triangle Park, NC.

Home Builders in neighboring states are offering as much as $100,000 off the cost of upgrades ranging from granite countertops to a conservatory. Some real estate agents are offering to pay some months of mortgage payments on estate homes.

Across the country, the theme is the same: Home builders and home sellers are juicing their efforts to unload single-family homes. Among other things, they are offering buyers cash discounts of as much as 20 percent, throwing in a pool, and agreeing to finish the basements, garages, and other spaces at a cost of several thousand dollars- incentives much richer than builders were offering as recently as six months ago, when the downturn didn’t look as bleak. In the Triangle area, home sellers are offering trips to Paris and other exotic areas.

Tips for purchasing in a Buyer’s market
How to get concessions from home builders:

• Buy a finished home: builders want inventory off their books and they may cut the price substantially.
• Have a pre-approval letter: This shows a builder you have financing already in place.
• Close quickly: Wrap up a purchase within 30 days; builders want to sell before the next bank payment is due
• Avoid contingencies: Don’t make your purchase contingent on selling a home or finding financing. A contingency removes most of your negotiating power.

These tips apply to any market conditions, however, in a seller’s market the concessions will not be as great.

What Home Buyers Want: Top Preferences when purchasing Home

More home buyers want extra garage space with two or more spaces in their homes, according to the “2007 Profile of Buyers’ Home Feature Preferences,” which was released by the NATIONAL ASSOCIATION OF REALTORS®.

The number of buyers expressing a desire for oversized garages grew 16 percentage points since NAR's last survey of buyer preferences in 2004. About 57 percent of home buyers surveyed now say they want an oversized garage. What's more, among buyers who purchased homes without big garages, 56 percent said they would have paid more for an oversized garage, compared to only 6 percent in the 2004 survey.
NAR's latest home buyer preference survey, which reports responses from buyers who purchased homes in 2006, asks buyers about the importance of 75 home features and room types.

What They're Shopping For

Other priorities for today’s home buyers include:

• Air conditioning: three out of every four respondents surveyed ranked this as “very important.”
• Master bedroom walk-in closet: 53 percent of buyers rated this as an important feature in a home.
• Hardwood floors and granite countertops: each gained 7 percentage points in popularity since the 2004 survey; 28 percent and 23 percent, respectively, of buyers labeled these home features as very important.
• Cable/satellite TV-ready: 46 percent, a growth of 6 percentage points from the 2004 survey, said this was important.
• Energy efficiency: especially among new-home buyers — 65 percent of new-home buyers said energy efficiency home features are very important compared to 39 percent for buyers of existing homes.

Buyers also said they're willing to pay more for these extras. For example, 65 percent of buyers said they would be willing to pay a median $1,880 extra for a home with central air conditioning. One out of four buyers also was willing to pay a median of $4,760 more for waterfront property.

Regional Preferences

What home buyers want in the South, however, is not always what buyers in the West want. The survey identified some of the following regional preferences in home features:

• Home buyers in the South and Midwest viewed central air conditioning as a priority, with 91 percent and 81 percent, respectively, saying this feature was very important.
• Sixty-six percent of buyers in the South thought a walk-in closet in the master bedroom was very important, while 61 percent of Midwesterners valued an oversized garage.
• In the Northeast, the highest percentage of buyers placed a premium on a backyard or play area (53 percent), followed by central air conditioning at 41 percent.
• Two-thirds of buyers in the West want oversize garages (66 percent), followed by central air conditioning at 59 percent.