About Orange County, NC

I heard an presentation this morning by Stacey Adfinsen, who does market statistics for the Triangle MLS, regarding Orange County and Chapel/Hill Carrboro real estate trends.

Some of the numbers were rather sobering:

50% of Orange County listings were expired or withdrawn in 2009.

Showings in fourth quarter 2009 were down 25% from the third quarter, and almosts 50% from the second quarter.

40% of properties on the market experienced price drops.

The average price in Chapel Hill/Carrboro dropped 2% in 2009 versus 2008, and is off 10% from our highs in 2007.

Average days on market was 94 for closed properties, and 185 for listings. Those properties with price reductions aveaged 135 days.

And some hopeful news:

Fourth quarter pending listings were up from 2008's dismal showing, and off just 10% from fourth quarter 2007.

Closings were also up from 2008's very low levels, and off just 10% from 2007.

January seemed a brighter month; anectdotally, I experienced four competitive offer situations, something I haven't seen for months. Hopefully a sign of stabilization in our marketplace.

We live in a service based economy, yet it seems like service is more abysmal than ever. I had two recent exceptions.

Irvin Johnson Roofing out of Siler City did an excellent job of installing a new metal roof on our home and repairing the metal roof on our barn. Great job, good price, excellent suggestions, thoughtful workmen. His number: 919.742.6559

The other excellent service person is Darryle Jackson at Verizon Wireless. I stumbled upon him at the kiosk in University Mall. I went in for new phones. He asked how I used my phone, steered me to the right phones, was not perturbed when I told him I could get the phone online cheaper. It was then I learned what you may already know. Verizon Wireless online and Verizon Wireless in your neighborhood don't talk to each other. If you order online, your support is all online or with an 800 number. Darryle is usually at the mall on Tuesdays or call him at 336.380.0851.

Buy the lot now? Or later?
You have been thinking about building your own home for a long time. It seems like all of the new houses you see are so cookie cutter and you have special, different design ideas that you would love to have in your new home. You know they wouldn't cost that much more to do but would make such a big difference.

It's a great time to buy land now but you know you'll need to sell your house before you start construction.

You decide to go to the bank to see about a loan to buy a lot so you can start planning while your home is on the market. It seems that only a few lenders do land and construction loans.

You were surprised to find out that land loans are only for 5-7 years and have a higher interest rate than houses. The banker told you that a formula often used is 5x the lot cost is about the home value. $500,000 is about you want to spend on the lot and house together and you have some money saved so you have the lender figure the payments on $80,000 of the $100,000 expected purchase price. Wow! you'll be spending more than $1000 a month on the lot payment and you won't even be able to live there.

Maybe there is another way to do this. With the new lending regulations and the real estate market so slow in our area what would you do? Any ideas?

You need to sell your Chapel Hill or Carrboro home and you've been interviewing Realtors. Let me stick my neck out a bit and say you aren't exactly hearing what you'd like to hear...maybe it's what you expected to hear on some level but there was always that little glimmer of hope, right? Maybe, just maybe, you could hold out for a bit higher selling price than what you’re being told. After all we live in a wonderful, vibrant part of the country and of North Carolina. We have an enviable quality of life and some of the best schools in the state. We never saw the outrageous appreciation that some states saw so we couldn’t possibly be seeing the depreciation they keep reporting in the news. Surely there are folks looking to move here who understand this and will open up those pocketbooks a tad wider to accommodate the price you know your home is worth.

“What harm is there in trying it just for a while?” you ask. “Besides, don’t we need some negotiating room built in to the price? A little something to make the buyer feel like they got a good deal?”

You need to hear me say this: You are talking about over pricing and it is a very, very bad strategy. Here are the facts.

The red bars show the percentage of the original list price which was achieved at closing when the original listing price was the same as the final listing price at the time of sale for Orange County, NC homes. In other words, the listing agent and seller PRICED THE HOME CORRECTLY and did NOT have to lower the original asking price before accepting an offer.

The yellow bars show how much LESS homes in Orange County, NC sold for when the listing agent and seller OVER PRICED THE HOME TO START and were forced to LOWER the asking price before getting an accepted offer. The percentage achieved at closing was negotiated off the final list price, NOT the original list price.

The red bars show the average Days On Market for an Orange County, NC home when the original listing price was the same as the final listing price at the time of sale. In other words, the listing agent and seller PRICED THE HOME CORRECTLY, did NOT have to lower the original asking price before accepting an offer and the home sold significantly faster.

The yellow bars show how much longer it took to sell homes in Orange County, NC when the listing agent and seller OVER PRICED THE HOME TO START and were forced to LOWER the asking price before getting an accepted offer. The average Days On Market is significantly longer. Time is money and sellers who over price undoubtedly paid a few more mortgage payments than those who do not over price.

You can see that over pricing, as a strategy, has never been a good idea but in an unforgiving market like we are experiencing now it can mean the difference between the seller bringing money to the table or not.

The value of significant real estate experience can not be overstated in 2010. If you are serious about accomplishing your real estate goals, give me a call. I'll give you all the facts you need to make the right pricing decision.

~These charts reflect the latest data available from the T.A.R.R. Report. A subscription publication for Triangle real estate practitioners~