Archive for July, 2011

Unemployment levels rises for 91 of 100 NC Counties

July 29, 2011

Unemployment rate Rises...AGAIN!

North Carolina Unemployment rate jumps to 9.9% amid 7600 government jobs being cut to include community colleges, universities and other state and local government jobs. It is up from May’s rate of 9.7% where it had been stable for several months prior.

The number of newly unemployed rose by 9500 to nearly 450,000 workers statewide. Government has cut over 10,000 jobs in June.

Over last year, the number of unemployed claims fell by 28,000, but this number does not include those who have quit looking for a job or have taken part-time jobs.

In Wake County, the unemployment rate is 8.3% and is comparable for the entire Triangle area. The areas that are hurting the most are the rural counties of NC. For a look at the county-by-county numbers, WRAL has a map that can be accessed at County by County Rates.

There are several reasons why the unemployment continues to be high. Personally, it appears the high rate coincides with small business fear to hire due to rising cost to hire new employees and the uncertainty of future cost.

The unemployment affects the real estate market since the unemployed have a difficult time getting qualified for a mortgage. Additionally, the unemployed homeowner is having increased difficulty paying their monthly mortgages.

I don’t think the employment situation will get better until the local, state and national government decides to lower taxes and remove some of the restrictions they have on business. It is hard enough for a business to be profitable than to have additional expenses that can be quite extensive.

With the lower unemployment rates in the Triangle, it has not affected our real estate market as much, but it still has an effect. Despite the lower rate, it is still high compared to the rates that were present before the recession began. Housing prices have stabilized to some extent, but can possibly fall more if the market does not pick up soon.

Newly Renovated Hedingham Golf Course

July 13, 2011

Notice the plush grass on the #1 Fairway

I spent last Friday afternoon on the newly opened Hedingham Golf Course to see the difference after a nearly 2 month renovation. The results were very promising in some respects and not so much in others.

As far as the renovations, they did not re-design any of the holes as it basically plays the same as it always has. Of course, I don’t think I was expecting too much difference in this regard as you are looking at a major expense to re-design a course…money that I don’t think they wanted to spend. However, they did accomplish some wonderful things in the 2 months it was closed.

The tee boxes were in pristine condition, especially considering the playing rates for this course. The grass was plush and very green. Additionally, the fairways and roughs were in very good condition. They played very well and you did not have the issue of taking your shot off dirt while being in the middle of the fairway as you possibly could have done last year.

One aspect that made it very difficult, but in a good way is the rough off the greens. The grass was very thick and it made it difficult to get it out of the rough at times…especially until you realized this issue and made adjustments in your swing. On the first hole, my approach shot landed just shy of the green and rolled down the hill into the tall grass. If you do not know this course, you realize that there is a creek-type area that protects the green on the front side. It took me three shots to get the ball out of the tall grass and onto the putting surface. Of course, on future holes, I made the adjustments and did not face the same issue when chipping from the rough.

The Par 5 #9 Fairway

The one area that was somewhat disappointing are the greens. The greens were not fully grown and you had some splotches throughout many of the putting surfaces. I know they are trying to correct this issue and it is probably due to the simple fact that they need to grow more grass on the greens, which in a common issue with our courses as the summer heat often makes it difficult for the shorter grass to survive.

Overall, I was impressed with the conditions of this course considering the green fees and the typical conditions of this course when I have played it in the past. I am concerned whether or not they will keep the course in the same condition going forward. In fact, a resident of the community was saying the same thing to me while we played a few holes together. This will be the real test for this course.

On a side note, I had received an email stating that Hedingham would be charging $25 green fees and cart throughout the month of July. So, this would be an excellent time to visit to see the newly renovated course.

Mid-Year Market Analysis of the Triangle Real Estate Market

July 7, 2011

Note: This is an opinion piece from a local Realtor who works in the Triangle market. All opinions and comments are welcomed and encouraged.

Today’s Market

Homes for Sale across the Triangle

As we have reached the midway mark for 2011, I wanted to take a few moments to reflect on the year and give my assessment to the condition of the market and give my prediction to the recovery. I am not a professional economist or analyst, but have several observations as a real estate professional. In a word, the market is still bleak. However, there are encouraging signs for the recovery that is underway.

The market is currently struggling along with moderate sales and reducing prices. Most of the homes that are listed for sale in the Multiple Listing Service has experienced price reductions throughout the year. This tells me that we are still trying to find the bottom of the market in terms of prices. It is not encouraging for those hoping to sell their homes in this market, but it is part of the recovery process.

If we look to markets like California and Nevada, you have seen an increase in sales over last year. However, prices have fallen in many areas to 2002 levels. This tells me that they were well overpriced and the prices have just recently gotten to a level where buyers can both afford to purchase or feel that the prices have hit bottom. Remember, it is all supposition and emotionally driven. Most of the markets crashed because of emotion due to the claims made by major media outlets that the housing market was bad. So, would-be buyers stayed out of the market. Of course, it was also emotion that caused many markets to appreciate as such high rates during the boom. Buyers were afraid they would not be able to buy if they waited too long or simply wanted to get in on the high appreciation rates. They did not make a sound business decision or they would have realized that a market that goes up too quickly will correct itself. Look at the craze of the 90s.

As everyone should know, we are in a buyer’s market, which is another way to say a down market. On the surface, it sounds like a buyer’s market would be good, but in reality it relates to not enough buyers for the homes on the market. This means sales will be down.

If you are looking to be an investor in real estate, then now is a great time to buy. As Warren Buffet has said many times, you buy when others are selling and you sell when others are buying. This is how you make money in real estate. Since very few are buying and more are selling today, it is a great time to buy. If you can afford, buy now and hold or rent until the market shifts upwards, then sell for the profits.

Forecast for the future

My humble opinion says that we are not yet in recovery. There are still more sellers than buyers and that trend has not yet changed. There are some encouraging signs in that a recent article that I read showed that residential rental rates have gone up. This is good for the market because it means that at some point in the near future, it will be more affordable to buy than rent since housing prices are going down. Where that price point for rent is located, nobody really knows, but as it approaches, we can expect renters to turn back into homeowners.

My gut tells me that we will not see any substantial recovery until after the 2012 elections. There has been too much instability in our nation’s economy that people are concerned about the future. If they are concerned about tax increases or a change in the tax code, they are going to be more leery about making such a large purchase. Traditionally, the real estate market has not been tied to national elections as real estate in its essence is local. However, with people becoming more transient and the federal government holding more mortgages, it has become more of a national trend and as such, tied to national issues such as elections.

My assessment is that if you are financially able to buy and ready for the responsibility of homeownership, now is  a great time to buy and you need to get off the sidelines and get into the market. Prices may go down some more, but there is no telling how much lower they will go or if they have hit bottom. In a year or two, the market should shift back to a seller’s market and prices should begin to appreciate.

Please comment on this article if you have anything to add or detract. Like I said, I am not a professional analysis so I do not guarantee that my assessment is correct, but I am confident in my assessment of the situation.