About Wake County, NC

Okay, this may not be new to some of you, but it was to me. The sad part is that I live and vote in Garner and I missed this (Though in my defense, the plans aren't new to me but the delivery is.)

Garner has opened a new web site called GoGarner.com to showcase recent planning initiatives. "The Streetscape Design, in combination with the Transportation Plan, has the opportunity to be the beginnings of a map for making important land use, infrastructure, and public service decisions for all of Garner." (From http://www.gogarner.org/)

I have read a lot of local news about Garner and Clayton lately that is great for current and future residents because as the area continues to grow, there is a defined, comprehensive growth plan. If you have read my blog in the past then you've probably noticed I don't necessarily agree with them all the time, but I'm first in line to tell my home buyers that the planning departments and their follow through can have a profound impact on your quality of life and rate of housing appreciation.

A couple of recent notes:

• Principal John Wall of North Garner Middle School was named Wake County's principal of the year.
• The top prize of the most expensive category in this year's Parade of Homes was awarded to a Garner home (The Rosemoor).
• Crosland has reached final approval for a proposed project in the Cleveland area of Hwy's 40/42 that incorporates a massive residential and commercial development into their growing market.
• Constuction of a new, 54 unit townhome communtity including first floor masters and garages has begun (www.SoutherbyBluffs.com)

Read more news about the area at http://www.garnerclayton.com/.

Jason B. Graves

Did you know that on-line home valuation monster Zillow.com has a chief economist? I like that they do because I feel opinions like his are market driven and not reports written for stock analysts.

Read New Homebuyer Tax Credit Proposal: Impact on the Housing Market by Stan Humphries. In his post he writes "Until now, we've been predicting that home values will likely bottom in the second quarter of 2010. But the tax credit could change that substantially, for several reasons." Following the guidelines of supply and demand and points out that the tax credit will increase demand but the addition of move-up buyers now included in the incentive will have an impact on supply and ultimately home prices. For a move-up buyer to take advantage of the incentive, they must first sell their existing home. With the incentives in play, what will happen to home prices?

The extension of the tax credit to existing homeowners brings not just demand into the market, but also an equal amount of supply (i.e., they have to sell their home in order to buy another). The existing tax credit to first-time home buyers was pure demand. Every buyer that was spurred to enter the market helped push inventory levels down by increasing demand relative to supply. With the existing homeowner tax credit, current homeowners are trading homes between themselves. What will be interesting to see is whether this game of musical chairs unfolds in an orderly fashion (i.e., some homeowners buying a new home before selling theirs; others doing the opposite) or whether skittishness about the market will lead more homeowners to try to sell their home first before buying a new one. The latter scenario could lead to more near-term supply than demand, which will push inventory up and prices down.*

My response:

You make some good points but I think your insight about inventory levels increasing and prices decreasing could be a book in itself. I would compare it to using software to predict storm paths like hurricanes, there are so many variables that it would take years of theory development to draw any viable conclusions. Now that we are adding a human element to the equation, get ready to be stymied.

Our growth in the Raleigh, NC real estate market has taught me an important fact: New construction will win 90-95% of the time when in direct competition with re-sale properties. People here who put their homes on the market for no other reason than they want to take advantage of the tax credit will not have a major impact on prices. They lack the motivations that many current sellers have and I don't expect they will add much downward pressure on home prices in Raleigh.

Even when our market was moving at a faster pace, our volume of new construction homes kept re-sale prices in check. Builders are adjusting their pricing through the margins they charge and the type of inventory they build. New homes are cheaper now than in 2006 and will continue that way for the next few years.

Only pocket areas of high desirability really saw bloated appreciation.

My prediction for Raleigh:

Prices will stay flat through winter with small, incremental increases through 2010. An outstanding year to buy in our market for individuals that will live in their home at least 3-5 years.

(Part of my thinking stems from forecasts of 3.5% growth/year through 2025).

This post was originally written for my regular blog. Raleigh Real Estate News. You maye read more available stories at http://www.gravesrealtyassociates.com/raleigh-real-estate-news-blog/

*Stan Humphries.New Home Buyer Tax Credit Proposal: Impact on the housing market. Zillow Blog. 11/06/09. http://www.zillow.com/blog/new-homebuyer-tax-credit-proposal-impact-on-the-housing-market/2009/11/05/#comment-192965

Raleigh/Durham/Cary & Triangle Area Homebuyers Will Benefit from Changes to Homebuyer Tax Credit

You have probably heard by now that Congress has approved an extension and expansion of the Home Buyer Tax Credit. All that's left is for President Obama to sign the bill and enact it into law; we expect that to happen very soon. Homebuyers in the Raleigh/ Durham/Cary and Triangle areas who were not able to take advantage of the original tax credit have reason to be excited at this opportunity.

We have been monitoring the progress of this legislation and are pleased with the extension and expansion. Significant changes in the tax credit include:

1) Extending the $8,000 credit for first-time home buyers for sales contracts entered into by April 30, 2010 and closed by June 30,

2) expanding the credit to include a new $6,500 credit for owners of existing homes who are purchasing a new primary residence. An existing home owner can claim the $6,500 tax credit if they have been residing in their primary residence for five consecutive years out of the last eight, and

3) increasing income eligibility limits to claim the full credit amount for both groups of home buyers have been raised from $75,000 for single taxpayers and $150,000 for married taxpayers filing a joint return to $125,000 for individuals and $225,000 for married couples.

Many of our home buying clients who were frustrated by eligibility requirements in the first two versions of the homebuyer tax credit will be pleased to hear that they too can now benefit from this historic housing opportunity!

ANSWERS TO FREQUENTLY ASKED QUESTIONS ABOUT CHANGES TO THE HOMEBUYER TAX CREDIT

National Association of Realtors Charts Homebuyer Tax Credit Modifications

If you thought your time was running out to use the homebuyer tax credit, your luck just changed! Today, President Obama signed the bill into law extending the $8000 first-time homebuyer tax credit. In addition, this new law now includes a $6500 tax credit for buyers who are current home owners and have lived in their home for five of the past eight years.

The National Association of REALTORS® has created a simple and helpful CHART that showcases the modifications - for more information, click here

Will you be at the Raleigh/Durham Real Estate BarCamp today? I'll be there representing Standard Pacific Homes. Can't wait to meet new people, check out the sessions and learn and share with a great group of real estate and social media experts.

Standard Pacific Homes - Raleigh is also a sponsor of the event, and we'll be providing an iPod nano to be given away! Hope to see you there!