How much square footage do we need?

Would you guess 834 square feet per person? In fact, that figure has dropped for the last 4 years. Today’s buyers are looking for “space in the right place”. But, size still matters in kitchens, bathrooms and closets. So, what will you see in the 2012 new homes?

The recent tough times have forced many buyers to reevaluate what they want in their next home purchase.  For the last 4 years, the average size of the sold homes have decreased from 2,277 to 2,169.  With today’s average household coming in around 2.6 persons, many families have asked “why spend money on what they won’t use”?  This mindset has lent itself to builders constructing open floorplans, which consist of a kitchen-family-dining room combination.  Families want open space that can be flexible enough to handle the every day living.

What else is changing in the “new” American home?  From the looks of the most recent new construction homes, there are many other rooms/features that are being cut.  Specifically, here is what you won’t see much of in the 2012 homes:

  • Formal Living Room
  • Two-Story Foyer
  • Second Stair Case
  • Cathedral ceilings

On average, how much are sellers coming off their list price in Wake County?

Drum-roll please…8%. Now buyers, as much as you may enjoy this little nugget I just shared, I must warn this stat is pretty worthless when negotiating with owner-occupied sellers…and here is why…

As much as we want to use the average sales to list price to anticipate what a seller is willing to accept for their home in Raleigh, one must understand how this number is derived.  This number is computed by averaging out all of the properties that have sold within Wake County in the last year.  Meaning, the 8% discount includes foreclosures and other “fire sales” that drastically weigh down the overall figure.  Therefore, consult with your Realtor (better be me!) to determine what similar properties are selling for.  This is the most accurate way to determine what a home is worth.

#1 statistic people should know from October Housing Report…

I follow a bunch of housing statistics. But, one stat really caught my eye …The Number of Homes Available for Sale (aka “inventory”) is lowest in 6 years. As inventory drops, sellers regain leverage.

What does this mean for the housing market in Raleigh, NC?

To begin with, the Raleigh housing market has fared far better than most cities in the country and continues to remain healthy.  In fact, many home buyers are ready to purchase and believe that now is a great time to buy.  But, the biggest problem that I have run across this fall (2011) when assisting home buyers is the lack of “high-quality” homes available for sale.  Most homes currently on the market are located on a busy street,  need updating or have an awkward floorplan.  Therefore, when “updated” homes located in desirable neighborhoods come on the market, sellers often times receive  multiple offers.  With the decline in housing “inventory”, we are starting to see the buyer’s market shift back in the favor of the seller.

What are foreclosures going to look like in Raleigh 2012?

We are expecting an uptick in foreclosed homes hitting the market in 2012.  These foreclosures should already be on the market, but they have been caught up in the “red tape” of the foreclosing process.  This has allowed the housing “inventory” to reach this low level.  However, most of the foreclosures in Raleigh are located on the outskirts of the city where buyers no longer want to live.

My recommendation to buyers…

Don’t wait around.  While subtle, the housing market is improving.  There are really good deals on the market in Raleigh right now.  As home sales pick up and the “inventory” drops we will see sellers less willing to cut their price.  In addition, mortgage rates will not stay at 4%.  I can promise they will go up and when they do…they are not coming back.  If employment picks up in 2012, the housing market will improve even quicker.  Finally, watch consumer confidence.  Once people start feeling better about the economy, the housing market will surely follow suit.

Read October’s housing report here.

Street name “Country Club” adds 9.3% to home value

Or, so says a recent study by two professors at UGA. The street or neighborhood name “Country Club” increases the value of a home by 9.3%. So, how much value do you add for Psycho Path or Divorce Court?

I am sure the figure- “9.3%” is debatable. However, I would agree that people pay a premium to live in certain neighborhoods or streets.  And what are 3 most important words in real estate? Location, location, location.

Read the full article about the value of a street name.

Twice as many single women buy homes…

“To the left, to the left…everything you own, in a box to the left” -Sing it Beyonce. Sorry men, she is the breadwinner. Study shows that almost twice as many single women bought homes compared to men in 2010.

I hope my Marketing Professor is watching.  Yes, I do study consumer trends!  The National Association of Realtors just released the Home Buyer and Seller Report for 2010 study.  The annual report evaluates home buyer and seller demographics.  Here are some interesting stats that caught my eye:

  • The median age of first-time buyers was 31 and the median income was $62,400
  • More than 50% of buyers considered purchasing a foreclosure but didn’t buy one for a variety of reasons
  • 89% of respondents used real estate agents and brokers

Knowing who the customers are and how they shop is a major part of marketing a home.  In order to best position your home to sell, the seller must take the emotion out of the deal and put themselves in the buyers’ shoes.  To learn more about how I market homes for sale in Raleigh, NC, please contact me at wilsoncrow@remax.net or visit my “for sellers” webpage.

And “yes”, I do remember the “Four ‘P’s” of the Marketing Mix…Product, Price, Promotion, Place.

How much do we value education?

Judging from home prices, we value it a lot! Neighborhoods located in high ranking school districts have withstood the foreclosure crisis far better. Looks like I’m giving out pencils next Halloween…

It comes as no shock that schools are a major driving factor for many buyers.  With that said, buyers looking to find a foreclosure in a high ranking school district just might be waiting for an opportunity that never comes along.

Check out this good article about the relationship between home values and school ranking.

She thinks my tractor’s sexy…

Just read about a real estate developer who bought a farm for 40.8 million in 2005. Developer went bankrupt and a farmer just bought the land back for 8 million in September. Don’t let the overalls fool ya…

What does this mean for real estate? Simply put, it means that people don’t want to live out in the middle of nowhere and commute to work. But, it goes far beyond that. Think about the price of gas. How about the fact that the 0% down payment, 3 year ARM loans for buyers with 500 credit score are no longer available. I could go on and on. Most importantly, we are seeing a major demographic shift. The idea of living closer to the city has come back in the mainstream.

What does that mean for prices for homes in the suburbs? The signs are already here. The largest concentration of foreclosures are located in the suburban neighborhoods.

This is a good article from the wsj about the new demand for farmland.

J.D. Power ranked RE/MAX #1 in Buyer & Seller Satisfaction

I didn’t make this up…I am just spreading the word. Independent study of consumers was just released awarding RE/MAX #1 in both Buyer & Seller Satisfaction.

As the saying goes, “if nobody knows, than nobody cares”.  Well, I am doing my part in letting people know that this is a big deal!  We just won two awards based on customer satisfaction.   RE/MAX received the highest numerical score among full service real estate firms for home sellers and home buyers in the proprietary J.D. Power and Associates 2011 Home Buyer/Seller Study.

Hey Foreigners– Buy a House and get a Visa!

A bill is being introduced by 2 Senators today that would allow a foreigner to receive a Visa if they spend $500,000 or more on a home. Darn, are we going to take away the fun of bribing?

As part of an incentive to increase foreign spending in the U.S., Senators Charles Schumer (D., N.Y.) and Mike Lee (R., Utah) are proposing a way to prop up the housing market.  From what I am reading, the idea is not a new concept. Foreigners are currently allowed to enter the U.S. if they invest in new businesses.  Sounds like a decent idea, but feel free to weigh in on your thoughts.

To learn more, here is a good article Foreigners’ Sweetener: Buy House, Get a Visa by Nick Timiraos of WSJ.

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