Chapel Hill NC Real Estate, Pittsboro NC Real Estate Information and More

 Tuesday evening the Orange County NC Board of Commissioners approved a resolution for an agricultural easement from the Breeze family in northern Orange County.  Colonel Breeze, who has owned the property since 1947, worked with Rich Shaw of the Orange County Land Legacy program to get 141 acres in a conservation easement.  The Breeze family had already made a generous donation of land to NC State who uses it to study, among other things, bees.  Thank you to the Breeze family and the other families who have put some or all of their property in conservation easements.

  The Land Legacy program, begun in 2000, has put more than 2200 acres in protected easements to protect watersheds, prime farmland, natural Areas and Wildlife Habitat (NC Natural Heritage sites) and pime forest areas.

   The program not only helps assure us of viable watersheds and scenic views, but also assures future generations farmland to continue supplying food locally.  An additional benefit, rarely mentioned, is the protection of the quality of life that so many people have moved here or stayed here for. 

    Let's face it, well educated and skilled people can live/work anywhere.  They are going to choose an area that is beautiful, has cultural amenities and fine food.  We can deliver that today, and because of the farsightedness of local agencies and citizens, we will be able to offer that in the future, as well.

Lush Price Growth, Still Affordable.  That was the headline on a feature in the December 2007 issue of Money magazine.  It sited ten metropolitan areas that still had price growth. Three were in North Carolina, the Triangle area (Chapel Hill/Pittsboro/Raleigh), Charlotte and Asheville.

Jumbo loans continue to be more expensive.  What's more qualifying for them is more onerous.  A local lender informed me part of the issue is, typically, those seeking a jumbo loan have often had no documentation of income or are reluctant to share finacial information.  That just is not going to fly these days.  More is more as far as underwriters are concerned.  Especially if you want more...of the lender's money. 

This ever more difficulty of financing luxury properties explains why high-end homes are the segment of our market where sales have slowed.  If you are selling a high-end home expect to wait a bit longer than expected, consider some owner financing or look for those ideal cash/1031 exchange buyers.

A local appraiser has this to say about our market. " Looks like the Chapel Hill/Carrboro area is doing well.  Values continue to climb and foreclosures are almost non-existent.  The same cannot be said for Durham.  They have a lot of foreclosures and I am worried it will affect the value of all homes very soon." 

When I asked about remodeling and how value is determined on the quality of workmanship and materials, these were the main two points I came away with..

You will always get more value if there is something to use as a comparable.  For instance, if you add an outdoor kitchen an appraiser will need to use a nearby outdoor kitchen that is not quite as nice and one that is of higher quality.  This is more important than ever with underwriters  (the gals and guys that actually give the ok for the loan) who are protecting their company and their jobs.  So, let's say  you have your brother the sculptor include the meteor that dropped in your backyard last year into your outdoor oven, it is going to be pretty tough to assign value to it.

Which brings us to the second point.  Building or remodeling for the most return on your money is a tricky thing. First of all, you want to enjoy the effort and money you put into your home, so all work will be reflective of your taste and your lifestyle.  However, you will always want to be aware of resale.  Even if you think you will NEVER leave your home, SOMEONE will have to sell it sometime. So making your home too unique will either create a white elephant or a terrific value for someone else, since the $45,000 stove imported from France just will not get appraised for anywhere near its real value.  On the other hand, building something to appeal to the masses is just as bad (in my humble opinion).  There are scores of big boxes with no soul on the market.  Almost every buyer I have had in the last few years is looking for something 'special'.  So give it to them; etched glass in a window, niches built into the walls, built-in bookshelves,  or universal design features that are attractive to both older adults and young families who love being able to get the stroller through the doorways!

Happy New Year. 

I spoke to one of my favorite lenders, Jennifer Foster at Suntrust Bank in Chapel Hill/Carrboro, and asked her about loan requirements for my buyers this year.  I was especially concerned that first time buyers were going to have to amass huge down payments because of the credit crunch.  My questions to her and her reassuring answer follows:

Mari: "Are you still able to make loans with as little as 5% down?  If not, what do buyers have to have?  Is 3-6% about right for an estimate of closing costs?  Are you requiring reserves?"

Jennifer:" I still have Fannie Mae 100% fixed rate financing and 95% financing.  FHA is coming out with 99% financing to replace their 97% financing in response to the struggles in the industry.  Fannie Mae has not changed their guidelines on reserves, but I expect underwriting will be more favorable if those folks with scratchy credit show some reserves (even if it's 401K).  Grant money is back and FHLB replenished us with more than we got last year.  I think 2008 is going to be fabulous."

I think 2008 is going to be fabulous...ahh....just what I wanted to hear.  I hope 2008 IS fabulous for you.  Make it a great new year.

Arrol Gellner, an architect and syndicated columnist, wrote an article that appeared in the LA Times entitled: What Was Supersized May One Day Be Downsized. He writes, "The size of the average American house more than doubled between 1950 and 1999, according to U.S. Census Bureau statistics. From 1982 to 2004, the typical new single-family house grew about 40% from 1,690 square feet to 2,366 square feet."

He worries about what will happen when the McMansion fad subsides and writes, "If a huge house simply could be tossed out like an outmoded necktie, or even junked like an obsolete SUV, this wouldn't be much cause for concern. But buildings are a lot more permanent."

He first asks, "What's so awful about these big, bad houses?" And then rattles off the usual list:

1. It wastes natural resources by using more building materials.
2. It requires more energy to heat and cool than a small home.
3. It cost more to buy so typically people can only buy a big house in less expensive locations. This means far from work resulting in a longer commute, using gas and creating more pollution.
 4. And finally,"The simple fact that people spend most of their time at home in just a couple of rooms. In a big house, that leaves an awful lot of space that needs to be paid for, heated, cleaned and maintained but has little real function. Hence, the big house will go when exasperation trumps ego."

Gellner concludes, "After 1900, with efficiency-minded magazines such as Ladies' Home Journal leading the charge, overworked homemakers rebelled against the large, ornate and hard-to-maintain homes of the Victorian era. Housing trends swung sharply back toward more modest houses, ushering in the phenomenally popular little houses we still call bungalows."

"As for those big old Victorians, they quickly came to be seen as the apex of vulgarity, and many were eventually carved up into rooming houses - a common strategy to make use of all that burdensome space."

McMansions are languishing on the market longer than smaller homes all across the nation.  In our market, where home sales continue to be good, the larger homes are on the market much longer and the only drop in prices is for those properties, not in the 2300' and smaller homes.

You probably already know buying locally helps keep beautiful farmland landscapes in your area.  You may have had the pleasure of a day's outing at a pick your own farm or have a friendly relationship with local farmers you see week after week at the farmers market. What a comfort to know the farmer isn't supplementing his product with melanine.

Here is another reason to buy local: to decrease our dependancy on oil.  

According to The Land Stewardship Letter, in 1940 a farm produced 2.5 calories of food energy for every calorie of fuel energy it used.  In 1974, the ratio was estimated as 1 to 1.  Today it is estimated it takes 3 calories of fuel energy for every calorie of food enegy and that is at the farmer's gate! By the time it gets to the consumer it is 10-15 calories of fuel energy to 1 calorie of food energy.  Why so much more to grow?  Oil.  Virginia Tech estimates that on the average midwestern dairy farm $8 of every $10 of expencse can be traced back to oil.

Eating seasonally as our grandparents did and using primarily local foods could save up to 90% of external fuel costs.  It would boost our local economy and help protect our state food supply.

Eating is a political act.

This is the best description on how to use this tool, I've ever seen:

Precisely how does a buyer or seller know when a real estate market most favors buyers or sellers? No buyer wants to pay too much and no seller wants to leave money on the table by pricing too low. The answer is in knowing the market absorption rates.

Property absorption rates in any local real estate market are usually considered the best indicators of whether that market is a sellers' market, a buyers' market, or a neutral market. The market is the market and favors no one. But knowing the current real estate market cycle is essential for success as either a buyer or seller.

Sellers' Market - Absorption Rates 1-4;
Neutral Market - Absorption Rates 5-6;
Buyers' Market - Absorption Rates greater than 7

The easy-to-understand process of calculating absorption rates for local markets will be helpful to anyone trying to figure out the current real estate cycle and how to formulate a winning buying or selling strategy.

For instance, assume there are currently 100 Single Family Home Lots for sale in a large, single family home community. Of these, 70 are priced at, or below, $45,000. Last month, assume that 5 lots sold for $45,000 or less. The absorption rate would then be 70 divided by 5 , or 14.0. An absorption rate of 14.0 indicates a strong buyer's market and, that in an unchanged market, it will take 14 months to sell all the hypothetical 70 existing lots listed at or below $45,000.

This basic analysis can be used with most of property types including building lots, homes, condominiums, or even commercial properties. There must, however, be a high enough number of actual transactions to permit statistical analysis. The fewer the actual number of transactions the less statistically significant will be the results. Also, remember that within very broad but weak markets, narrow market segments may be showing non-typical strength.

Market absorption is a very useful tool for anyone trying to best determine how to price their property and what the current market says is a reasonable time period for a sale to be concluded. The absorption rate analysis also helps buyers in that in a buyer's market a low purchase offer is often a winning strategy.

After weeks of no rain, it is such a joy to walk land with clients in the rain and show houses while dodging puddles.  It has inspired me to pick up the gardening books again and peruse the bulb catalogs that are stuffed in my mailbox everyday this time of year.

However, during the weeks of drought I viewed my gardens with a hard eye and changed my plan somewhat.  The use of annual flower seeds are going to be much more prevalent in the beds farthest from the house (and watering source).  In a drought year those beds won't get watered and I won't lose too much financially. 

Repeating perennials throughout beds around the property is a large part of our design and I am using it to our advantage by sacrificing the back beds and using divisions from the front to replenish the back.

Bottomline?  During a severe or ‘flash' drought the beds in front of the house will get watered as will the orchard and the vegetable garden.  Everything else will have to survive with deep roots and deep mulch or perish.

New Construction Buyer Beware....Recently a young couple called me to represent them in the purchase of a new home.  They are primarily interested in new construction and had visited several communities to ‘window shop' before calling me. 

Mistake. Let me tell you how window shopping could have made the purchase of their home more expensive.

Two of communities had them ‘sign in' and asked if they had a buyer's agent.  No. 

What this meant is the seller (builder and seller's agent) feel they are procuring cause for the sale of the house.  The buyers talked to the builder and to the agent about details of the house.  Once they were sold on the house, they were ready to get someone to protect their interest.   Here is the rub...the seller's agent (although this was not explained to the buyers) wants to represent only the seller with no representation for the buyer and to not pay a buyer's agent fee.  My buyer's choices are to proceed with  this house and pay the buyer's agent fee, to proceed with this house and have the buyer's agent negotiate the fee, work the agent's fee into the offer with a lower offer to the builder or find another house. 

They have decided to do the later since they as they said " we do not want to work with that agent for another six months of our life while the house is being built".

Bottomline for the buyer?   Even when window shopping do not sign anything you do not understand. Do not sign away your right to be represented.

Personally, I was very disappointed because this was a small local builder and real estate company working with a very young couple buying their first home.  I was certain we would be able to work this out, since it was just a misunderstanding on the couple's part. 

This is the impression it left with the young man:

I'll be honest with you; I had some reservations about contacting an agent. Those reservations were validated by xxxxx little blow-up. But after seeing you handle the situation and hearing how happy Julie is, it's safe to say I'm more than impressed and really look forward to working with you.   

Bottomline for builder and seller's agent?  They most likely lost a sale and you can bet these folks are going to be doing advertising for them.  Not the kind you like to get

During lunch with one of my favorite mortgage bankers, Jennifer Foster, she mentioned how quickly underwriting parameters are changing...sometimes daily, especially on jumbo loans.  The interest rates are considerably higher, as well. 

If you can wait to buy that expensive dream house, do so.  The industry should calm down in the next few months and interest rates should go down. 

If you are trying to SELL in this market.  Have your agent  find the best deals for jumbo loans so your buyer can make the deal NOW.

The 90 degree weather finally broke and people are shopping for homes again.  The drought and high temps have reminded buyers the importance of energy and water conservation.  Green built homes and green remodeled homes are more in demand than ever. 

As demand goes up, appraisers are beginning to see the value of green built homes and adjusting their appraisals accordingly.  Lenders are already aware of the value of energy and water efficient homes and offer specially priced loans to those purchasing green buildings.

For more information on green built homes and communities in the Chapel Hill, Durham or Pittsboro NC area, visit my website, www.HiddenCoast.com. 

  The market in the Triangle is still strong. 

Chatham County and Pittsboro have 20,000 new homes on the books.  Yikes!  Most of these homes are in the $450,000 and up range.  Not surprisingly, the most popular areas are near Jordan Lake and within an easy drive to the University of NC and Research Triangle Park.

Chapel Hill homes are on the market a bit longer than they have been in the past for several reasons; they are more expensive than ever before, people relocating here from other areas are having difficulty selling their homes and the new home market in nearby Chatham County is offering tempting upgrades at "no extra charge'.
New construction in Chapel Hill is going up, not out.  New multi story condo complexes are being built downtown, including Greenbridge, an ambitious green building.  Visit www.GreenbridgeDevelopments.com, to learn more.

Hillsborough, the county seat of Orange County, has awakened from its historical slumber and is coming alive!  It may be the only downtown area next year with enough parking.  Over 400 new spots are being created even as you read this.

Carrboro has a building moratorium that they are billing their, growatorium, so they can discuss how to rezone areas for higher density.  There are few building lots and the rural buffer zone of Orange County borders them on the west.  Two areas in north Carrboro are transitioning from agricultural areas to residential areas.  They are near I-40 to make commutes to RTP easy.