Wake County in 2008

Are we in a recession, going to a recession or is the media reporting recession to make sure that they are the first station to report that we are in a recession? Those are questions I can't answer. I would love to hear a local economist give their take on how Wake County is doing in relation to the other areas of the country that maybe are in a recession.

What I do know is that real estate sales have slowed down by about 20 to 25% compared to the past couple of years. Is this a sign of something major happening in the local economy? Some think that we are in more of a normal market. In the past couple of years, other parts of the country were experiencing "hyper appreciation" of homes. These homeowners sold their homes and invested their equity into homes in our area. Local companies were also hiring during that time and our cities and towns were being named as the #1 or so place to live for various reasons. During the last year or so, on average, 65 people a day were moving to Wake County.

During this time period, Wake County residents experienced a steady 7% appreciation rate on average. Builders started building larger homes with more features and higher sales prices to accomodate people who needed to invest their equity. Homes, new and resales, were selling in relatively short time frames. Many resale homes were selling in less than a week.

Today, homes under in $400,000 are selling on average in about 60 days. Homes over $400,000 are taking longer to sell. The higher the sales price, the more days on market. This is in part due to the large number of homes we have on the market that are over $400,000. The builders were trying to keep up with inventory when we were in a faster market. 8 to 10 months ago, the builders buying lots and planning what homes to build on them to keep up with the faster market and then during that time period, sales started slowing down. The end result is that we have a really good inventory of homes over $400,000 in most areas.

Conclusion:

• Listen to the national news reports with an open mind and investigate what is going on in our area. We tend to be different from other parts of the country.
• If you live in a home that would be priced under $400,000 and you are thinking about buying a home over $400,000, now could be a good time to make that move.
• Every time the media reports that the Feds are lowering interest rates, that does not mean that mortgage rates are coming down. So don't wait for interest rates to come down. 6% is a good interest rate.

Next post will be links to articles from various publications about interest rates, buying now vs later and what areas to still hot markets. Stay tuned!