No matter the type of real esate in Raleigh, farmland, commercial, residential, condos single families all areas of the real estate market have been hit hard.  Commercial real estate, that was beginning to find solid footing in the Triangle just as the boom came to a bust is suffering the most. 

“The commercial real estate market here faces its worst year” since the early 1990s, said Jimmy Barnes, president of NAI Carolantic Realty, a Raleigh real estate services firm.

In fact the News and Observer reports:

The Triangle’s office vacancy rate ended the year at 13 percent, flat when compared with 2007. But vacancies are expected to rise this year. Landlords will compete with shrinking companies that are trying to cut losses by subleasing excess space. Rents could soften as a smaller pool of prospective tenants gain leverage.

Understand that cycles are normal, so too are extreme bad and good cycles.  However booms and busts are not as dramatic as they have been in Raleigh and the rest of the country.

Real Estate Advice for 2009

Too bad there is not a crystal ball that all residents in North Carolina could use to predict how long prices will continue to fall.  The best position to be in today is to be aggressive as banks are doing what they can to survive, so too should the average homeowner.  Whether you are in commercial, residential or industrial work what you can to be creative with making your mortgage, finding tennants or keeping an empty house rented. 

For instance if you own a home in Raleigh and you were hoping to get a tennant for $1800 a month, consider dropping the price to $1000 a month as getting some rent is better than having to pay an entire mortgage by yourself as the rules to the Raleigh real estate market have changed dramatically. 

I won’t keep ranting but be sure to understand the Raleigh Real Estate market is a small cog inside of a larger real estate cycle and economic cycle.  You can succeed.

• Home builders are corporations - While it is in their interest to sale homes that appreciate and create value for their homeowners, their sole allegiance remains to that of the corporation and its shareholders. Hear me very clearly, home builders want to create win-win situations, but at the end of the day their financial decisions are motivated by its desire to generate returns for their shareholders. See the liberal documentary, The Corporation featuring Noam Chomsky.

• Home builders reserve the right to change their mind, just like you - When a real estate market is hot all home builders capitalize on basic economic principles of supply and demand. If you can sell a home for an extra $20k due to multiple offers, wouldn’t you? Likewise, if you had to sell your home in an emergency situation wouldn’t you take less? Home builders are no different, and if a market turns they will often do what they have to financially survive, even slash the price of the home your paid $15,000 more for last year.

• Home builders quote historical numbers, not guarantees to sell homes - When the new home salesperson tells you that homes in the area are appreciating very well, they are usually referring to historical data. If you are a speculator or investor it is up to you to understand the details and risks of your investment. In real estate, homes historically will appreciate over time, but no one can predict that time frame, or should I say those that can usually eat at restaurants that serve $24 bottled water.

From Businessweek Online:

Homeowners are getting slammed as builders slash prices. The big question: Will this shock treatment help hasten the end of the painful downturn?

Las Vegas was once the hottest of the red-hot real estate markets. But when sales really started choking up last year, developer KB Home (KBH) did something drastic. Determined not to be caught with a big backlog of unsold homes through one of the industry’s notorious down cycles, the builder started slashing prices. A lot. In the 1,400-home Huntington community, a subdivision of two-story stucco houses west of the famed Strip, homes that started at $320,000 a year ago are now listed for $270,000–just a starting point for potential deals. Rest

Currently homes are being marketed as being from the 400K’s and range in square footage from 1,761 to 3,396 square feet.

As for the Martha Stewart and KB Homes combination, the part that I really never got was how and why buy a home with the Martha stamp, when we have no idea of Martha’s relevance in 10, 15 or 20 years when I go to sell my home. Whether Martha will be an added feature or a functional obsolescence, is something that only time will tell. But when I came across Wynbrooke during the Parade of Homes, I found a winner that had beauty on both the inside and the outside. Now, this semi-secluded, tree heavy and forest like home community is what I envisioned Twin Lakes would be like, but with only 90 or so homes, I think this North Raleigh neighborhood is poised to take off. It’s ideal for Relocated Yankees that Can Afford Raleigh….local joke. And for those of us not looking for ranches and or golf course living its a perfect fit. Near good local schools, freeways and major business hubs, it is a good fit.  Raleigh Families have another good choice.

If you are interested, this weekend would be great and ask for Kris as she was the saleslady that gave me the tour for the home.

BONUS

The top 5 “celebrities-influencers” I would love to see attach their name to a home builder.

Celebrity/Home Feature

1. Ralph Lauren/ 1.5 acre miniature pony ranches
2. Tom Ford/ every hallway would double as a runway
3. Donald Trump/ heliport outside the master bedroom window.
4. Apple-Steve Jobs/ all white walls with iMacs for flooring tile.
5. Shigeru Miyamoto, Nintendo Designer/ bedroom furniture that is controlled by the Wii remote.
   

The top 5 “celebrities-influencers” I would love to see attach their name to a home….. out of spite.

1. Flavor Flav/ Clocks, gold teeth and all kinds of debauchery.
2. Perez Hilton/ A house with no refrigerator?…… thats hot!
3. Ozzie Osbourne/ Giving a whole new meaning to powder rooms.
4. Shaquille O’neal/ The worlds first and only Olympic size bath tub.
5. Hugh Hefner/ Wait a second, doesn’t he already have a house?

News worth a browse:

• Bloggers dinner at Brier Creek, 10/15, be there or have a life.  I’ll be there.

• A new contract for buying and selling homes to hit North Carolina.

• Reverse mortgages, who knows if they are good are bad.

• 35 Best places to retire.

• Off the shelf Ikea homes.

News to view:

Real estate agents looking to add video to their listings can turn here.

Campbell Law School relocating to downtown Raleigh.

Civil law suit filed against Cary regarding unjust school impact fees.

Top selling subdivisions in Raleigh and…. Wakefield is not #1.

Renters are losing ground across the country.

Mortgage rates are easing around the country.

Minority ownership falls in 2006.

Lawrence Yun, NAR senior economist, said the mortgage market impact is quantifiable. “Fewer contracts were being written because of mortgage availability issues, and a separate internal survey of our members shows more than 10 percent of sales contracts fell through at the last moment in August, primarily the result of canceled loan commitments,” he said. “The volume of activity we’re seeing today is below sustainable market fundamentals because some creditworthy people are trying to buy homes but can’t because of the credit crunch.

This news sucks for people that are stuck with poorly leveraged “investment properties” and people that bought their personal residences as personal piggy banks, but for those that purchased their home because they like their neighborhood, like their jobs and like their communities then such problems are not of chief concern. When they are ready to relocate 5, 7 or 10 years from today, no one has a clue what the market will look like.

News to Skim:

• Cute, smart, sexy and no place to stay the story of Duke sororities and the lost housing.

• Interest rates to fall to 3.75% by next year, from your mouth to God’s ears.

• Alexander Village at Brier Creek in goes for $16.8 million.

• 8 lessons to take away from playing Monopoly.

• Multi-million dollar “green” houses.

• Why NC will be recession proof.

Raleigh Real Estate’s Triangle Report

Raleigh Real Estate’s Triangle Report

Raleigh Real Estate’s Triangle Report

Raleigh Real Estate’s Triangle Report