Over a year ago I wrote about this new research park that was conceived for Chatham County. If you missed it you can read it here.
Chatham County is just south of Chapel Hill and is one of the more rural areas of the Triangle. In a state where the average population density is 196 people per square mile, Chatham’s density is 93 per mile. (For comparison, Orange County which includes Chapel Hill, Carrboro and Hillsborough has 135 people per mile; Durham County has 935, and Wake County, including Raleigh, Cary and surrounding areas, has 1079. Chatham County is the only county in the state where the number of farms is increasing, and while Siler City was at one point an industrial center in the state, the poultry plants and textile mills have long since left the county.
While people who love Chatham love it for its natural beauty, there is no doubt that economic development is needed. So when the Preston Development people packed a standing room only crowd of citizens into Chatham Mill last week it was hard to argue with their presentation which was skillfully planned to create the strongest psychological impact. ”You love the rivers and lakes? So do we. You want natural trails and protection of the environment? So do we.”
Preston Development has been quietly buying up over 7,000 acres of land over the past ten years or so – large tracts of property constituting 64 different properties between the 15-501 corridor and Jordan Lake, with the intention of establishing a research center similar to the Research Triangle Park, only conceived as a mixed use “live work play” development. Unlike some of the sprawl communities we’ve seen in recent years, their plan is intelligently designed, with bands of development beginning with mixed use (commercial, research facilities and other employment centers) nearest Pittsboro, residential development in the middle band, and the outer band along the Haw River and Jordan Lake offering open space and greenways with connecting trail systems for public use.
The development will contain four separate communities. The first one will begin this fall with the development and construction of an extension of UNC Hospital which is expected to begin construction from Northwood High School in 2014. Preston Development has embraced the kind of causes that we environmentalists hold dear: Local solar firm Strata Solar will have a 20 megawatt solar farm on a parcel leased from the developers, and the developers are seeking to become part of the Research Triangle Cleantech Cluster to better utilize alternative energy in powering technology.
There is no doubt that Chatham County will benefit from additional employment centers in the county, and creating population centers such as the ones described in the Chatham Park plan will help to prevent sprawl caused by workers having to commute long distances from home to work. There is also no doubt that it will forever change the landscape of the central part of the county and likely make the eastern end more vulnerable to encroachment by the community of Cary.
Adding more housing stock to an already oversaturated market would not be helpful to local economic recovery, however. I am hopeful that the developers will recognize this and give existing neighborhoods an opportunity to sell existing housing stock before adding more developments to the mix of available homes for sale in Chatham
As Bob Dylan said, “The Times They Are A’Changing.” It was true then, and it is still true today. If things have to change, though, there are probably worse ways for “progress” could occur than this massive but well-conceived plan.
We are busier this spring than we have been for years.
Homes are selling, we are seeing buyers coming from out of town to take advantage of the wonderful lifestyle of Chapel Hill/Carrboro and the surrounding areas. There is no doubt that the housing market is healthier than it has been for years.
This graph from the Triangle MLS tells the story very clearly:
These statistics show Triangle-wide sales including not only the Chapel Hill/Carrboro area but also Wake County including Raleigh and Cary and their suburbs.
Are prices going up?
For all the talk of appreciating prices and bubbles, it doesn’t look like we are anywhere close to that.
You can see from these statistics that average prices are still continue to fall, although the drop rate is slowing. And because real estate is local, some neighborhoods are appreciating more quickly than others. Neighborhoods where there is a backlog of unsold homes will take the longest to recover. In addition, the average sold price statistic sometimes reflect the fact that it’s the more expensive homes that are selling. For example, in Orange County which contains Chapel Hill and typically has the highest median sales price, more homes sold between $400-600,000 than any other price point. In Durham that sweet spot is $200-300,000 and in Cary it is the $300-400,000 price range.
So is real estate back?
For years I have cautioned against buying the most expensive house you can afford, despite the “expert” advice to the contrary. To me, owning a home is one part of the American Dream – a place where you can feel safe and comfortable and enjoy your relaxation time with your loved ones. But there are other aspects of life that deserve attention: travel and entertainment, for example. When every dollar you make is tied up in your mortgage payment you are working for your house instead of having your home support you and your life.
I watched a very interesting documentary called “The Flaw” that’s running on Link TV. I highly recommend it – you can watch it on Netflix, purchase it on Itunes or rent it on Youtube. This is probably the tenth documentary I’ve watched on the banking crisis and its relationship to housing, but this one is focused almost entirely on the housing market. There are some political points that you may or may not agree with, but the fundamental analysis by noted economists including Case and Schiller, the noted housing experts, demonstrates that home prices were substantially stable when adjusted for inflation until the very late 1990s, and that this rise corresponded to a drop in wages caused by a wide range of factors. The burst of the stock market bubble in 2000 wiped out a great deal of wealth in the US, and homeowners turned to their homes to replace that wealth. ”The flaw” as described in this film was the idea that home prices would continue to go up indefinitely, supporting a lifestyle that with falling wages was unsustainable.
So when we ask the question “Is housing back,” it’s a complicated question. Can the housing market ever return to the frenzy of the early 2000s when basically free money kept the housing market churning and prices increasing? And really, do we want it to?
But I think it’s safe to say that we have turned the corner and are returning to a normal, healthy market that is driven by a normal progression of home purchases: young people purchasing their first homes, enabling young families to move up into larger homes, enabling older families to move into their dream homes, enabling retirees to downsize.
So yes, housing is back!
The tax credit for energy saving home improvements expired in 2012 but was reinstated by Congress in January, so if you made any improvements to your home for the purpose of saving energy you may still be in luck.
You can receive up to $500 in total tax credits for eligible home improvements you’ve made since 2006 (including a $200 limit for windows). If you claimed the full credit for home improvements since then, you won’t be able to take the break again.
If you are eligible, the tax break applies to 10% of the purchase price (not installation costs) of certain insulation materials, energy-efficient windows, external doors and skylights, and metal roofs with pigmented coating or asphalt roofs with cooling granules that meet Energy Star requirements (see the Environmental Protection Agency’s Energy Star Web site for details). You can count both materials and labor costs for certain central air conditioners, biomass stoves, electric heat pumps or electric heat pump water heaters that meet specific energy-efficient guidelines — up to a maximum of $300 for each. You can count up to $150 for an eligible natural gas, propane or oil furnace or hot water boiler.
There are especially good incentives for adding solar systems: 30% tax credit on a new system (this REDUCES your actual taxes by 30% of the equipment price) and a 50% bonus depreciation in the first year. In addition, you may produce enough energy with your solar system to actually sell electricity back to the utility companies.
If you are considering adding solar to your home, this is the year to do it. If you need a recommendation for a good solar contractor, contact me. Meanwhile here is the IRS form to report your deductions.
In our company right now we have buyers looking at homes priced around $100,000, and buyers looking at homes priced around $1 million. We also have buyers looking at homes in the $300,000 range and in the $500,000 range. All of these buyers have one thing in common: They want homes that require no updating - they want to walk into a home and be wowed.
The programs on the HGTV network showing picky home buyers searching for homes has been a great asset to real estate agents in helping agents to convince sellers to make upgrades. The fact is, this isn’t just a television phenomenon, it happens in real life as well. Sellers often think that prospective home buyers would prefer to make their own selections and do the upgrades themselves, but that is almost never the case. Buyers want to have an experience when they walk into the home, and that experience includes a move-in ready property with all of the bells and whistles, no matter what price range they are looking in.
There is no better way to create that “Wow” factor than replacing formica or solid surface countertops with granite. Granite has a nearly universal appeal, even though you do hear some people complain about the fact that it requires some maintenance (it does occasionally have to be sealed).
Quartz is another popular countertop choice and is widely considered to be more durable and require less maintenance. Quartz countertops are constructed of natural quartz combined with a polymer resin. Requiring no maintenance and offering more consistency in color, quartz countertops have become very popular with many homeowners.
Solid surface countertops were very popular in the 1990s, but they can appear dated in today’s market, especially if they are in a non-neutral color that may not appeal to a buyer’s individual taste.
Other countertop choices include soapstone, which you can find in one of our listings and while absolutely gorgeous is probably price prohibitive when simply preparing your home to sell. And concrete countertops are very popular for the more industrial look of urban contemporary styling and can accommodate unusual features such as embedded glass, shells and stones.
Because updated kitchen countertops are such an important requirement of prospective home buyers, we nearly always will recommend that prospective sellers update their countertops with a material that is more updated. Whether you prefer quartz or granite or one of the other more exotic materials for your own lifestyle, granite is still the standard for preparing your home to sell and that is our recommendation for any price point. As an added bonus, it is now less expensive than quartz.
Not all granites are alike of course; some have big patterns that may not fit into a small kitchen, and not every color will appeal to every buyer. I generally recommend a light gold color that is not too busy unless the kitchen is flooded with light in which case you can go with something darker and more dramatic.
There are tricks that can make granite even more affordable, such as using seams in corners, and some suppliers will offer steep discounts on remnants for smaller kitchens. With entry level granite at very reasonable prices, this is an investment that will pay off at nearly 100%!
Diversity rules in the new school assignment plans for Chapel Hill/Carrboro and Wake County Schools.
The new school in the Chapel Hill/Carrboro school system has become a bone of contention in the school district now that the school board has approved a new redistricting plan to accommodate the new Northside elementary school. The new school is located in the heart of a historically African-American community that has been the witness of a changing town as its traditional neighborhoods become infiltrated by student housing and luxury condos.
The approved plan was contested for months by neighborhoods whose children would be moved from schools that are in closer proximity to their home to the new school in order to achieve the socioeconomic balance that the district generally strives for. In addition, some children were moved from Frank Porter Graham in order to allow for the new dual language (Spanish/English) program that will be put in place
The redistricting affects families in the Parkside and Larkspur neighborhoods more than any other single community because their new school will be about two miles farther than Seawell elementary, their current school. Change is always difficult to adjust to, but in the past we have seen that the fears subside once the children begin attending the brand new school. Hopefully that will be the case here.
In Wake County, the school board voted in a narrow margin to approve a plan that would return to address-based school assignment from the highly contentious “choice” plan under which students could choose from several schools rather than attend the one to which they were assigned. The new plan returned to the assignment districts from the 2011-2012 school year so that it could be implemented quickly.
The good news for new home buyers in Wake County is that under the new plan when they purchase a home they will know which school district their child will be attending. Under the “choice” plan that was very unclear and subject to a great deal of unknown factors.
The importance and problems of diversity
Diversity has long been an important criteria for drawing district lines in both the Chapel Hill/Carrboro school system and in Wake County schools. I believe that encouraging diversity in our schools is an important tool in fostering understanding and acceptance of cultures other than the one in which we were raised, creating a more balanced community with better race relations.
However, an enforced diversity policy has been particularly problematic in Wake County, which is one of the largest school districts in the nation and the largest in North Carolina, so student bus rides can be quite long. Personally, I feel Wake County would be better served by splitting up the school system into smaller and more manageable districts, with Cary, Apex and Morrisville having their own school district and Raleigh and the eastern communities in another district entirely. But until that happens, having an assignment plan in which home buyers have some certainty about their schools will be helpful in families making moving decisions.
The month of January is named after the Roman god Janus who looked both backwards and forwards which I have always thought was interesting. The first day of the year is the time when we typically look back at the past year to draw insight and clarity for the year to come.
In the Chapel Hill/Carrboro area housing market, and really for the entire Triangle, 2012 statistics confirm what we at Lynn Hayes Properties experienced for ourselves: the housing crisis is over and we are digging our way out of the ditch that we found ourselves in. We appear to have bottomed out in 2011 which was the worst year, and while it will take a number of years to get back into balance, things are definitely looking up.
According to Triangle-wide MLS statistics, sales were up over 20% in 2012 from 2011, but listing inventory was up only .3% which helped to strengthen pricing. In Chapel Hill and Carrboro sales were up 15.7% over the previous year and the number of new listings remained about the same, with the average price dropping a bit to $361,936 (as opposed to the Triangle-wide average of $266,350).
In Chatham County (which includes Pittsboro) the average sales price was $295,562 and sales were up about 15%, the same level as Chapel Hill and Carrboro. Chatham is a huge a diverse county, so this figure includes home sales over over $1 million as well as rural properties in the single digit thousands.
Sales were up over 20% in Durham County with the average price being $191,662, up slightly from last year. Prices tend to be stable in Durham and last year was no exception.
One remarkable thing about these statistics is that the ratio of list price to sold price is consistent across the Triangle communities, with selling prices being about 93% of original list price and 96% of the last listing pricewhich proves the point that sellers need to reduce prices in order to receive offers (see this earlier article with my study on this topic). Still, the percent of original list price rose from 91.9% to 93.3% which shows that prices are strengthening.
I am predicting a very strong bounce in the housing market this year. Our (metaphorical) phone has been ringing off the hook (metaphorical because most people contact us through email rather than the telephone!) and we had the busiest December that I can remember. Housing starts are up and new construction appears to be returning. In addition, the relatively warm weather that we are experiencing tends to bring with it an early spring market.
If you are thinking of selling your home this year, it wouldn’t hurt to get an early start. Yes, there are often more buyers in the spring but there is also more competition from other properties on the market and it may be more difficult to stand out from the crowd. We are always happy to provide you with a free, no-nonsense consultation to help you evaluate your options. Contact us today!
Your friends at Lynn Hayes Properties would like to take this opportunity to wish you a joyous season no matter what holiday you celebrate at this time of darkness and light. We especially send wishes of abundance, joy and prosperity and hopes for a beautiful 2013.
We are pretty certain that 2013 is going to be our best year yet, and look forward to serving you!
Here in the Triangle area North Carolina we haven’t had much of a winter. Apart from a dusting of snow, temperatures have been mild and daffodils are blooming in my yard. Still, energy bills continue to rise and this is a good time to consider energy-saving measures that will save you money as well as preserve resources. Nearly 50% of your home’s energy use occurs through heating and cooling, so this is a good place to start.
- Over time houses shift and settle, often leaving space between windows and doors and the siding and insulation that protect them. Sealing gaps around windows with caulk will help to protect against air intrusion and heat loss. Check the weatherstripping on exterior doors to be sure there has been no deterioration and replace where necessary.
- If you have a crawl space as many of our North Carolina homes do, your insulation may fall from its position under the floor joists or become damaged. This should be checked every few years and replace insulation as necessary. I have seen quite a few home inspections where the insulation was installed upside down, with the vapor barrier on the wrong side (it should be placed against the floor framing and not visible from below). Correcting these problems will help save energy and extend the life of your insulation.
- Don’t underestimate the benefits of regular tuneups to your heating and cooling systems. Having the system checked and cleaned regularly will not only extend the life of your systems but help to preserve its efficiency as well. Be sure to change your inside air return filters regularly – most manufacturers recommend changing these filters once every month.
- Check your water heater to be sure the temperature is not set above 120 degrees to save energy and protect against scalding water.
- If your home has lots of windows and glass consider using insulated shades to protect against sun in summer and wind in winter.
Not only will your wallet thank you, but you will find yourself more comfortable in your home as well.
PMI stands for “private mortgage insurance,” and it is charged on loans are greater than 80% of the home’s value. (FHA mortgages are federally insured and are a separate animal altogether.) Private mortgage insurance benefits the lender if there is a default: it pays whatever deficiency there might be between what the lender recoups at a foreclosure sale and the amount the lender can turn around and sell the home for.
Back in the old days you had to beg a lender to drop your PMI and provide them with appraisals showing that your home’s value had risen to the point where your mortgage was under the 80% equity level.
Since the Homeowners Protection Act of 1998, mortgage lenders are now supposed to automatically drop PMI once the loan (if originated after the enactment of the act in July 1999) is paid to 78% of the original appraised value, no appraisal required, or at the homeowner’s request when the loan is paid to 80% of value. However, after the housing crash of 2008-2010, lenders became concerned that with home values dropping the loan would no longer be 80% of the actual value. Consequently, they began to require current appraisals to prove that the value was in fact in the property. In addition, homeowners must be current on their payments and have a solid payment record.
Appreciating value is not the only factor that can lead to a qualification to be released from the PMI payment – if you have been making extra payments your loan will have been paid off faster and you may have fallen below that 80% equity level.
If you believe that qualify to cancel your PMI, here are the steps to follow:
- Call your lender’s customer service office to determine the requirements for dropping the PMI payment.
- Send a letter with the required information and request the value that the lender will require your home to demonstrate in order to drop PMI.
- Determine whether an appraisal will be needed, and if so what type of appraisal is required. Does it need to be from a licensed appraiser, or would they accept a broker price opinion from a real estate agent?
FHA loans automatically drop the mortgage insurance from the monthly payment once the equity drops to 78% on a 15-year loan. The mortgage insurance is dropped automatically on a 30-year loan as long at the loan has been held for 5 years.
Mortgage insurance has no real benefit to the homeowner and it is well worth the effort involved to cancel those monthly payments. If you have any questions about your home’s value and whether you are eligible to cancel your PMI, we are always glad to help.
Home staging has become a big business these days. And thanks to shows on the HGTV network, I rarely have to work very hard to convince sellers that their home needs to show its very best to attract buyers. A client yesterday said to me, “But don’t people want to come in and see that the house is lived in?” And frankly, the answer is no. They want to imagine themselves living in the home, not you!
But how much really needs to be done? Does the home need to be completely furnished and decorated? If you can afford to furnish and decorate all rooms that is the ideal situation, but that is not possible for everyone’s budget. Sometimes all it takes is a few well-placed items of furniture and some colorful accessories to add some softness and a
feeling of home. This photo is from one of my listings and was already staged by the sellers. The room is not overfurnished, but the furniture helps to set the space.
One big mistake I feel professional stagers make is in advising home sellers to remove all personal photographs from the home. Personal photos of happy people enjoying their lives adds a positive feeling of warmth to a home. The absence of photos can give a sense that something is wrong in the family – perhaps a divorce or estrangement. I always encourage a few well-placed photographs, especially in the bedroom and dining room.
One common misconception that home sellers seem to share is that buyers would rather make their own selections. This is very rarely the case, and if a buyer IS looking for a home that they can renovate they will be looking for a price that is attractive to them, but maybe not to the seller. It is nearly always better to make improvements BEFORE selling rather than expecting a buyer to make those upgrades.
It’s generally a good idea to make improvements while you are living in your home so that you can enjoy them. A home I sold a few years ago had this dark red carpet. At the time the home was on the market for quite a while and when my client purchased it we were able to negotiate a great price for her. She always intended to replace the carpet or install wood floors but time went by and in the meantime she remarried and moved with her new husband to a new home.
Now it’s time to market the house, so we replaced the worn red carpet with beautiful new wood floors in the living room and dining room. The cost was lower than you might imagine, and the home shows beautifully and we received two offers in the first week. Even though neither of them met our expectations, it’s obvious that the new flooring has done its job in giving the home a fresh new look. Check out the rest of the house here.
The client I met with yesterday has been basically living in just a few rooms of the house so we started moving some furniture into the unused rooms. The living room and foyer are the first rooms a buyer sees when entering the home, and they were empty and felt barren. We warmed them up with a few pieces of furniture and with a few decorative plants and a bit of artwork on the wall the home will soon be ready for the spring market in January.
We are always glad to give our opinions about what will help your home to show its best. Contact us for a no-obligation appointment.