Real Estate

The value of location?

I just came back from Roanoke, Virginia. The local newspaper, the Roanoke Times, published an article today called, "On the upswing." It was about the real estate market. The article certainly had a different tone from the one entitled, "The real estate bubble," which was in the Careteret News-Times this past weekend. I guess the first question is whether or not the Roanoke, Va. real estate market is in that much better shape than the Carteret County one.

The Roanoke area has a much larger population, and figuring out how to compare apples to apples would be a huge challenge. Something that I do not think that I will try in a quick blog entry. I would likely end up swamped in statistics trying to equalize the two areas.

However, since I am a Realtor® and have homes in both areas, I have a pretty good idea of the market conditions. I think that I can safely say there isn't too much difference in the two markets, except in the newspaper coverage. Some home prices have come down in Carteret County, but they went far higher than they did in the Roanoke area. The average sale price here on the coast is still about 24% higher. My guess is that our waterfront properties add substantially to the average price. Living on the Roanoke River actually is a negative on selling price since the river often floods. Both markets seem relatively healthy to me.

Real estate is a very local business. It is also very dependent on the attitude of the buyers and sellers. Both Roanoke and Carteret County-Swansboro are attractive areas but for different reasons. Each area has its boosters and some wonderful things happening. It just depends on whether you like a little more urban environment with mountains or little more rural setting with beaches and lots of water access.

Buyers and sellers are the real ones to decide the prices for which homes sell. If you are happy with the area you live in and have no pressure to sell, you will likely not come down quickly in price on a house that you have placed on the market. If you want to live in a certain area, you will pay more for that area. The opposite can be true in both cases.

The wonderful thing about real estate is that different people love different areas. My guess is that both Roanoke and the Crystal Coast will see an improvement in the real estate market this year. Homes here are no longer selling before potential buyers even have a chance to see them. Prices have adjusted some but the average cost of a home continues to rise, just not as quickly.

A home is still a great investment in Roanoke or on the Crystal Coast. Now is a great time to be looking since there is plenty to choose from and as is always the case some people want to sell quicker than others.

Do you buy stocks based on newspaper editorials?

I pose the question of "Do you buy stocks based on editorials in the newspaper?," because Sunday, the Carteret County News-Times published an editorial entitled "The real estate bubble."

I am a newcomer to the area so I have no axe to grind with the News-Times. I have become a relatively faithful reader of their paper. I might disagree with some of the editorial writers that they choose to publish on their pages, but it isn't much of hardship to go online and find ones that I do like. I do not consider myself an expert on balancing editorial pages so I have not launched a blog campaign about how the News-Times handles their editorial pages. Actually I would far rather take pictures like the one above of Swansboro just after sunset on this past Saturday, than read most editorials.

In addition to taking pictures, I have spent the last nine months studying real estate intensively. On top of that, I have bought one house myself, sold another and helped my kids buy two other homes in very different markets over the last five years. I have lived through a so-called "real estate bubble implosion." We owned a home in Halifax, NS in the late eighties when the off shore oil boom collapsed. We ended up losing about 25% of our investment because the market became flooded with homes that the oil companies were trying to unload for whatever prices that they could get. We carried the payments for the Halifax house even after we moved to Columbia, Md where we bought another home near my new job. We sold our Columbia home less than twenty two months later before we moved to Roanoke, Va. It sold in six days. We actually gained back everything we lost on the Halifax home when we sold our Columbia home.

In the fall of 2004 we sold my mother's house in Mount Airy, NC. Our family had been living on that plot of ground since around the turn of the century. The house itself was built in the twenties with the help of some workers from National Furniture that my father kept employed during the depression by putting them to work on the house. Much of the woodwork including doors in the house is solid walnut. It was one of the first houses in Surry County to have electrical breakers instead of fuses. It even had a tile roof and solid copper gutters. The house also had a huge formal garden which was one of the reasons we had to sell the place. We just could not devote the time that was needed to keep the house in the shape that it deserved. We ended up selling the house for less than we wanted, but it is now a wonderful bed and breakfast and is called the Sobotta Manor.

At the same time we were selling the Mount Airy house which stayed on the market for over two years, we were striking out in finding a house on the water that we could afford somewhere along the Crystal Coast.

The point of this tale is that generalizations do not mean much in the real estate market. The News-Times says that "Carteret County's average home sales prices in recent months have been flat." The statistics which I am looking at tonight from January 1 through March 18 do not agree with that assessment. However that is beside the point. Anyone who has spent much time in Carteret County knows that there are widely different housing markets across the county. Before settling in Bluewater Cove, we gave up trying to buy a home in Beaufort. The market was so hot that by the time we got an email on a property, it was already sold. Things are not that way today in Beaufort.

The market that we face here in Carteret County is far different than the market that I faced in the late eighties in Halifax, NS. There are no oil companies here unloading homes for whatever they could get for them. I seriously doubt we will see something similar to the Halifax market correction since most people living on the Crystal Coast are not in a corner and being forced to sell their properties. In fact we have a number of properties where the pricing is relatively inelastic. The owners will sell them, but only if they get something near what they want for the property. They are trying to maximize their profits and are willing to wait.

I imagine most of them are well aware of tax changes over the years and have consulted their tax attorneys to figure how much profit they can shelter if their home qualifies as a principal residence according to IRS rules.

It has been widely reported in newspapers recently that North Carolina is one of the top destinations for retirees. In spite of what the News-Times says, most people coming here, myself included, find the tax rates, even the new ones, much less than what they are accustomed to paying. Our property taxes are about 20% of what they were on a similarly priced home in Roanoke, Va. People from Northern Virginia and other urban states have been paying even higher than what we pay in Roanoke.

We bought our home relatively close to the top of the real estate boom. Still we had looked for three summers before finding this house which ended up having almost everything we wanted.

I have looked at a lot of property in Carteret County since becoming a Realtor® with Bluewater GMAC Real Estate, I still have not seen a property that was a better value or where I would rather live. When I factor in the amenities of the Bluewater Cove subdivision, the growing services available within five miles, and the proximity to the Emerald Isle beaches plus the access to the Atlantic Intercoastal Waterway, I am confident that we made a good investment. Also as a purchaser of a single family home, the prices of high density condominium homes would have to change massively before it would impact my decisions. As much as the News-Times worries about that the condominium market impacting the whole real estate market, I would caution that your single family home is a different market.

To close I would say, talk to a Realtor® if you want or need to sell your property. Don't base your decision solely on what you read in the newspapers. Real estate is one of the most locally sensitive and personal commodities in the world. Realtors® spend all their time figuring out how to get you the most money for your home if they represent you as a seller. If you hire them as a buyer's agent they spend all their time trying to get your a great deal. One of the key factors in the real estate market is that it only takes one person to buy your home. When we sold our farm in New Brunswick, a lady from Singapore bought it and turned it into the Tay Ridge Farms bed and breakfast.

If you are waiting to buy because you believe there will be fire sale prices on homes in Carteret County, I think you will have a long wait. There are far too many people wanting to buy houses for the bottom to drop out of the market. The statistics which I am looking at suggest that some markets are doing well and that prices have not gone down in all markets. It is also important to remember that many of the buyers are not coming from around the corner. Some come and find our prices reasonable because they haven't been able to find the mix of amenities, quality housing, and water access that they want elsewhere.

Last summer there was even a NY Times article, "North to Canada, for an Ocean View," about people looking as far north as Prince Edward Island for beach front property. Let me say this clearly. The weather in Prince Edward Island in July is about like our March weather except the water is colder along their nicer beaches. Their only water that is swimmable by something other seals and Labrador retrievers is not nearly as nice as our beaches. We're a much better buy than Prince Edward Island unless you place a lot of value on property where you can also ice skate and shovel snow in the winter.

Remember the real estate advice you get from the newspaper might be worth the whole fifty cents that it cost you.

In the end newspapers care about selling newspapers.

The Carteret County real estate market is what the buyers and sellers make it, not what the newspaper declares it. Invite someone to the beach this summer. We're still the best kept secret on the East Coast.


December 2 Daily Record

I am back in real estate post licensing classes so all I am seeing is scenery flying by as I drive to Wilmington.

This morning I slowed long enough to snap this early morning picture of a White Oak River marsh.

As you can see, our blue skies have returned. The temperatures are cooler but definitely pleasant. The rumor is that the great weather is rapidly coming to an end.

Yet, I think good weather is all relative. It may get cooler here, but I do not expect to see cold weather that I used to experiencing in the Virginia mountains. Time will tell, but right now I am planning on keeping the shorts and sandals accessible.