Raleigh Real Estate Market Summary

Raleigh (, rälē or rah-lee) is the capital of the state of North Carolina and the county seat of Wake County.

Raleigh is known as the "City of Oaks" for its many oak trees. As of the 2000 census, it had a population of 276,093, making it the second most populous city in North Carolina, after Charlotte.

Raleigh, Durham and Chapel Hill make up the three cities of The Triangle, so named in 1959 with the creation of the Research Triangle Park, a research park between Durham and Raleigh (mostly located within Durham County).

The Triangle is a regional population, equivalent to the U.S. Census Bureau's Combined Statistical Area of Raleigh-Durham-Cary. Its estimated total population as of 2005 was 1,509,560. The estimated Raleigh-Cary metropolitan statistical area population, as of 2004, is 914,680.

While almost all of the city limits is located in Wake County, a few small portions of Raleigh are actually in Durham County as a result of annexation Raleigh Durham Annexation Agreement Lines.

The City of Raleigh estimates its population to be 353,604 as of July 1, 2006, making it one of the fastest growing cities in the nation.

Raleigh placed fourth on MONEY Magazine's 2006 list of Best Big Cities.

Raleigh Real Estate Market Stats:

Population: 412,559
Average Home Price: $250,000
Average Rental Price: $1,250
Average Cost of Living: +14%
Male/Female: 50%50%
Married/Single: 31%69%

Raleigh Real Estate Market Demographics:
Adults 20-24: 10%
Adults 25-34: 23%
Adults 35-49: 34%
Adults 50-64: 23%
Adults 65+: 10%

Leading Raleigh Real Estate Company: FOR Home BUYERS 800-333-2893
Email: staff@forhomebuyers.com or Visit: www.forhomebuyers.com

January House Prices Worse Than Expected

As Posted to CNBC.com

Prices of U.S. single-family homes in January plunged a record 19.0 percent from a year earlier, showing a U.S. housing market that is still in the throes of a deep recession, according to a Standard & Poor's/Case-Shiller report on Tuesday.

The composite index of 20 metropolitan areas fell 2.8 percent in January from December, S&P said of the index that dates back to 2000.

The U.S. housing market is in the worst downturn since the Great Depression as a huge supply of unsold homes, tighter lending standards and record foreclosures push down home prices.

The drops on a month-over-month as well as year-over-year basis were bigger than expectations based on a Reuters survey of economists.

Michelle Meyer, an economist at Barclays Capital in New York, said the large number of foreclosures were behind the steep home price drops in certain areas.

"Home prices fell on a year-over-year basis in all 20 metro areas surveyed, driven by steep drops in boom-to-bust markets such as Las Vegas, Phoenix and San Francisco," she said.

"Home prices are falling sharply in these markets due to deeply-discounted foreclosed homes, which make up more than half of existing home sales," she said.

S&P said its composite index of 10 metropolitan areas declined 2.5 percent in January from December for a 19.4 percent year-over-year drop, also a record. The 10-city index dates back to 1988.

As of January, average home prices across the United States are at similar levels to late 2003. From the peak in the second quarter of 2006, the 10-City Composite is down 30.2 percent and the 20-City Composite is down 29.1 percent.

Most parts of the country appear to remain on a downward path, with all 20 metro areas reporting annual declines, and nine of them falling more than 20 percent in the last year, David M. Blitzer, Chairman of the Index Committee at Standard & Poor's, said in a statement.

"There are very few bright spots that one can see in the data," he said.

The composite indexes have been reporting consecutive annual record declines since October 2007, while on a month-to-month basis they have shown 30 consecutive months of falls, he said.

The U.S. housing market is critical to the economy, with a wide-ranging impact from the construction industry to the sale of appliances and furniture. After hurting growth for multiple quarters, a continued deterioration could prolong a turnaround for the world's largest economy, which has been in a recession since late 2007.

Economists believe the housing market will not begin to recover until home prices fall far enough to stimulate demand, which has emerged in some states, such as California.

Many potential buyers, however, are opting to stay sidelined, waiting for home prices to stabilize from their downward spiral.

The three worst performing cities, in terms of annual declines, continued to be from the Sun Belt. Phoenix was down 35.0 percent, Las Vegas declined 32.5 percent and San Francisco fell 32.4 percent.

Dallas, Denver and Cleveland fared the best though they too suffered drops, with prices falling 4.9 percent, 5.1 percent and 5.2 percent, respectively.

New York, buoyed by plentiful jobs and big bonuses in the financial sector in recent years, showed a more modest annual decline of 9.6 percent. Home prices in New York, however, are vulnerable, with rampant financial sector layoffs expected to take a toll on real estate.

Raleigh-Cary Tops Nation In Growth

Originally Posted to The News & Observer

The metropolitan area is home to more than 1 million people after growing by more than 4 percent from 2007 to 2008. But that is slower than in previous years.

As the national economy lost steam last year, the Raleigh area continued to attract residents, becoming the fastest-growing metropolitan area in the country.

According to census numbers released today, the Raleigh-Cary metropolitan area, which includes Wake, Johnston and Franklin counties, grew by 4.3 percent from July 2007 to July 2008, and is now home to close to 1.1 million people. It well outpaced its closest rival, the Austin, Texas, area, which grew by 3.8 percent.

The national average was just under 1 percent.

The Triangle has been near the top of the nation's growth chart for more than a decade, as newcomers poured into the area to take jobs in technology, tourism and academia. The resulting building boom, and the jobs that came with it, drew hundreds of thousands of new residents.

Much changed in recent months as the economy fell into a deep recession. While the downturn took longer to arrive in North Carolina, the state's unemployment rate of 9.7 percent is now well above the national average of 8.1 percent.

Next year's figures may show a darker picture for the Triangle.

Even this year marks a slowdown for the area, despite its place at the top of the list. The growth rate was nearly half a point lower than the two previous years, when it was 4.7 percent.

The Durham-Chapel Hill metropolitan area, which includes Durham, Orange, Chatham and Person counties, didn't make the Top 10, but its population continued to swell at a steady 2.5 percent, up slightly from the year before. Just fewer than 490,000 people live in that area.

Raleigh Home Prices Off 2.5% For 4th Quarter

Originally Posted to Triangle Business Journal

Home prices in the Raleigh area dipped by 2.5 percent in the fourth quarter, according to new data from real estate company Zillow.

The median value of a home in the region was $199,365.

At the local market’s peak in the first quarter of 2008, the median price of a home in Raleigh was $209,204. The market has dropped by about 5 percent since then.

Some 61.6 percent of Raleigh-area homes have lost value in the last 12 months, Zillow says. The company estimates that of all home sales, 15 percent involved homes that were sold at a loss.

Foreclosed homes represented 10 percent of all transactions in the Raleigh area, compared to about 20 percent across the country.

Across the U.S., Zillow says, the price of a home dipped by 11.6 percent during 2008. This marks the eighth consecutive quarter of year-over-year depreciation.

The number of U.S. homeowners with negative equity, or those who owed more on their homes than the property was worth, rose to 17.6 percent from 14.3 percent in the third quarter.

American homeowners saw $3.3 trillion erased from the value of their real estate in 2008, Zillow says. In the fourth quarter, homeowners lost $1.4 trillion, or 42 percent of the annual total.

Raleigh-Durham Home Prices Swim Against Current In 2008

Originally Posted at Triangle Business Journal

The Triangle's housing market continues to be among the best in the country in terms of prices, according to a new batch of federal data.

The Federal Housing Finance Agency says home prices in the Raleigh-Cary area increased by 2.96 percent in 2008. That ranks the Raleigh metropolitan area 18th best in the country. The Durham-Chapel Hill area also fared well, placing 28th with home-price growth of 2.15 percent for the 12 months ending Dec. 31.

Nationally, FHFA says, home prices fell by 4.5 percent in 2008.

FHFA is the regulator of mortgage lenders Fannie Mae and Freddie Mac. The agency’s data exclude home loans that cannot be bought or securitized by Fannie and Freddie; that leaves out both homes with large “jumbo” mortgages and most homes with subprime loans. Thus, the data tend to overstate overall housing prices in an area.

But the agency’s data do make for useful comparisons among metropolitan markets, and they underscore a key fact about the Triangle's housing market: Even as transactions have dropped, prices have remained much stronger than in most areas of the country.

“Price declines continued in the fourth quarter although not as rapidly as some had expected,” FHFA Director James B. Lockhart said in a written statement. “We are hopeful the housing initiatives announced last week by President Obama will begin to provide much-needed stability to the housing markets.”

Obama’s $75 billion housing plan is meant to help homeowners avoid foreclosure.

Former KB Home CEO Karatz Indicted

Originally Posted at Triangle Business Journal

Bruce Karatz, former CEO of KB Home, has been indicted by a federal grand jury in a stock options scheme.

Los Angeles-based KB Home sold homes for a combined total of $263 million in 2007, the last year for which figures are available, according to Triangle Business Journal research. That made the firm the area’s No. 1 residential builder, though it is among a number of builders that have experienced local leadership and structural changes in recent months as the housing market has tanked.

Karatz, 63, is alleged to have backdated stock options over seven years, awarding himself and others millions in stock-based compensation. Karatz resigned from KB Home (NYSE: KBH) in November 2006 under pressure in the wake of an options inquiry. Other top KB executives forced out were Richard B. Hirst, executive vice president and chief legal officer, and Gary A. Ray, the head of human resources.

The SEC began its formal probe in January 2007.

According to the reports, Karatz’s 20-count indictment included seven counts of mail fraud, five counts of wire fraud, three counts of securities fraud, four counts of lying in statements to the U.S. Securities and Exchange Commission and one count of lying to KB Home’s accountants.

If convicted, Karatz, could face a prison sentence of up to 415 years.

Unexpected Rebound In New Home Construction For February

Originally Posted at Triangle Business Journal

New home building unexpectedly rebounded across the country last month as builders increased their housing starts to a 583,000 annual pace from a record low of 477,000 set in January.

The Commerce Department reported Tuesday that new home construction rose 22 percent from January to February but remained 48.5 percent below year-ago levels. The surge was led by an 83 percent jump in multi-family construction. Single-family homebuilding rose by a modest 1.1 percent.

In the South, which includes the Carolinas, new construction jumped 30 percent last month compared to the month before but was still 44 percent below the levels of last year.

Only one region reported a drop in housing starts: the West, where starts declined by 24.6 percent. The largest increase was in the Northeast, where starts increased 88 percent.

Permits for future new home construction in the South rose by 5.9 percent from January to February but were still 46 percent lower than the year before.

Nationwide, permits rose 3 percent from January to February but remained 48.8 percent lower than a year ago.

The South region includes Virginia, Maryland, D.C., Alabama, Arkansas, Delaware, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, and West Virginia.

N.C. Corporate Tax Revenue Down 37%

Originally Posted at Triangle Business Journal

Collections from the state’s tax on corporate profits were down 37 percent for the first eight months of fiscal 2009, July through February, as North Carolina companies battled the recession.

The number is seen as a barometer of business conditions.

Collections during the eight-month period were $275.8 million, down from the $441.5 million recorded during the same period in fiscal 2008, according to the North Carolina controller’s office.

The state taxes corporate profits at a rate of 6.9 percent.

In a new report on the state’s fiscal outlook, North Carolina General Assembly researchers pegged recessionary job losses in the state at 197,000 through February and commented that “recessionary conditions will persist for much, if not all, of 2009.”

Mortgage Rates Hit 1971 Levels

As Originally Posted to Seeking Alpha

The gap between the 10-year Treasury note and the 15-year / 30-year fixed-rate mortgages has narrowed, not surprisingly, since the Federal Reserve began actively buying mortgage securities in January (see Bloomberg article).

The average rate on a 30-year fixed mortgage fell to 4.96 percent in January, the lowest it has been when considering data that goes back to 1971. Rates were recently at 4.98 percent. With a promise to increase mortgage-backed security purchases by an additional $750 billion, along with as much as $300 billion in Treasury purchases over the next 6 months, rates obtained with the help of a Raleigh real estate agency should continue to be under pressure in the near term.

As the Fed continues to support low rates in hopes that consumers will either refinance or make a new home purchase, others are also encouraging consumers to purchase now, but for different reasons. Given the flood of money entering the market, consumers will eventually begin seeing inflationary pressures. Now may be the time to act while both rates and prices are low.

Housing Experts Say Buyers Have Several Options

From News 14 Carolina



CHAPEL HILL, N.C. – Real estate experts say the federal government is providing several opportunities to help certain parts of the housing market.

For qualified buyers, there are a number of government programs to help finance their purchases.

Whitney Long, a loan originator with Carolina Home Mortgage in Chapel Hill, N.C., says although private bank loans have been harder to secure, loans from the Federal Housing Administration or through the VA or USDA can provide help for those looking to finance most or all of their costs. She said that especially applies to those who use the first-time homebuyer's credit.

"We're starting to see a lot more people get pre-qualified, think about buying now that the credit has come out with the $8,000 for new home buyers," Longs said. "So, it's certainly a big incentive for people to think about it."

She said she's doing about 50 percent more government loans than before.

Even though experts are not sure when the slump will end, they know the numbers will eventually start heading the other way.

"If you look at all the things that have historically gone well for our market, in terms of the universities, the demographics, the educational level, the income and earning level of the people that live here, those are the types of markets that come out of recessions quicker," Stacey Anfindsen, a real estate market analyst, said.

The housing market in the region is doing better than the rest of the nation and although they're slower than before, statistics show there is activity in the real estate market.

But Nick Tennyson, executive director of the Durham, Orange and Chatham Home Builder's Association, knows people are being cautious.

"I don't think any of us should kid ourselves about the fact that there are people who have lost their jobs in our market and people who are afraid about that," Tennyson said. "I think that's really just stopped a lot of people from considering any sort of purchase."

Commercial Real Estate Properties Going Green in Raleigh

Increasingly, there is more demand for environmentally-friendly working and living spaces in the U.S.. Fittingly, the cutting-edge technology firms of the Research Triangle Park area of North Carolina are leading the way through innovative design and eco-engineering. The following article, taken from the Triangle Business Journal, highlights the efforts of America's largest center for technology development.

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As the epicenter of innovation and cutting-edge technologies, Research Triangle Park is pushing for a more “green” environment, both inside its buildings and across its 7,000-acre expanse.

Liz Rooks, executive vice president of the Research Triangle Foundation, which oversees the park, says zoning and environmental best practices have changed dramatically in the last 50 years.

With the opening of the Wake County portion of the park, the RTF worked with North Carolina State University to design a master plan with a heavy emphasis on protecting the ecology, she says.

Environmentally sensitive land was identified and declared off-limits for development. Steep slopes were clearly marked out, and existing vegetation was retained to prevent erosion.

Despite the nation's housing slump, Raleigh real estate remains in steady demand due to the unique combination of high-tech businesses, world-class colleges and universities, and advanced medical facilities. Efforts on behalf of the Park to "go green" only add to the appeal.

Read Entire Article from the Raleigh Business Journal