Triangle Residental Real Estate Report

Jan-Apr 31, 2011

Wake County General Brokerage

Stacey P. Anfindsen/Birch Appraisal Group of Cary/www.tarreport.com/Stacey@staceypeter.com

 

1). What is the relationship between assessed value and sales price?

For the first time in my lengthy career, houses are selling for less than assessed value on average. The county average is 94% based upon closed sales during the past 13 months. The tax man has struggled with upper end and entry level housing. The two townships with the highest average sales prices, Bartons Creek/New Light (both in the Falls Lake area), have average ratios of 86% and 80%. The township with the lowest average sales price, St. Marys (Garner area) has an average ratio of 86%. The assessed values are closest to actual sales prices in Raleigh and Wake Forest townships, both with an average of 98%.

2). How about specific price points and assessed values?

Closed sales priced at 500k and above had an average ratio of 90% and closed sales priced below 200k had an average ratio of 92%.

3). The Case Shiller index was recently released and states a double dip in national house prices, time to panic?

As with anything reported by the national media, you must remember the indexes, medians and averages reported reflect activity for the nation as a whole. As I have reported in the past, all of the metrics have been influenced by the home buyer tax credits offered during 4Q/09 and 2Q/10. These credits produced higher than “should have been” closings in each quarter and the market has spent the past 10 months recovering. The credits also skewed the median and average sales prices. In my opinion, there is no way to accurately predict what house prices have done during the past 6 quarters due to the influence of the tax credits. As we move forward towards the third and fourth quarter of this year, the comparisons might be a bit more valid. As I have stated numerous times in the past, areas and price brackets with an oversupply of housing will be subject to house price declines.

4). What are the worst areas in terms of supply?

Nine of the market segments that I survey have active listings with no year to date sales. There are twelve market segments  that have a current supply of two years or higher. So twenty one of the seventy total market segments analyzed would be classified as very sick. Six within the twenty one are listed at 1 million and above, five are listed between $800,000 and $999,999 and five are listed between $600,000 and $799,999.

5). Where are the sick segments located?

The answer provides further support to a topic that I have touched on in past articles, reverse migration. Wake County  uyers have historically preferred North Raleigh, Inside the Beltline and Cary. When the market was hopping and prices

in those areas increased, buyers opted for less expensive alternatives in south, southeast and east Wake. The current market contraction has lowered prices in the preferred areas resulting in an oversupply in the outlying areas. TMLS areas 9/15/17 (Apex and Holly Springs), 11/12/13 (Knightdale, Wendell and Zebulon) and 6/16/18 (Garner and Fuquay Varina) are home to the most amount of oversupplied segments. Each of these areas has an oversupply of housing priced above $600,000. I would anticipate that house prices in these market segments would need a significant drop in order to produce the buyers necessary to lower supply.

6). Any good news concerning supply?

There are two market segments with an undersupply of housing, each priced under 150k. This level of housing is undersupplied in TMLS areas 5/10 (Cary and Morrisville) and 9/15/17 (Apex and Holly Springs). While undersupplied markets would be expected to have price increases, tighter underwriting guidelines will keep the number of buyers at a level where only slight house price increases occur.

7). How should I counsel my buyers and sellers?

Tell them all real estate markets are local and our market is divided into more than the seventy segments that I analyze. Pay greatest attention to the supply of housing within their price bracket and price/offer accordingly. Buyers rule in today’s market, even in those segments with a balanced supply. Buyers are accepting of what they perceive to be correctly priced listings. April closings where the final list price was the same as the original, were on the market for an average of

60 days and the houses sold for 97% of assessed value.