February 10, 2016
By Brian Pate, Keller Williams Realty
As we look back on 2015, we can see was a good year for real estate in Rolesville, North Carolina. A total of 223 homes were sold, with an average sale price of $312,651 and a mean sale price of $315,000. Overall, $69.72 million in real estate sold in the 27571 zip code for the year.
Numbers didn’t quite reach the 257 homes sold and more than $81 million in real estate sold in 2014, but the market continued to be strong.
Looking forward to 2016, what can we expect to see?
The coming year brings with it some challenges because the stock market has lost a significant portion of its value in the first two trading weeks of the year. Meanwhile, oil prices (and gas prices along with it) are still heading downward. Although there was an expectation of a reduction of oil prices, I don’t think anyone could have predicted the drop into the $30 per barrel range. That great gas price means that people are willing to live a little further away from work, and the growing economy in Rolesville provides a great long-term investment if one can get into the real estate market now.
In addition, election years are historically tough on real estate, and although some have said the Fed would raise interest rates four times in the next year, I only see two rate increases logically. Again, the administration does not want interest rates skyrocketing as we reach the first Tuesday in November.
Along with the interest rate challenges, we saw a severe downtick in the index for homes sold in November 2015. Yet if we look at it closer, that is when the new TRID rules kicked in. In case you haven’t heard, TRID is the TILA (Truth In Lending Act), RESPA (Real Estate Settlement Procedures Act) Integrated Disclosure rule. Yes, only in real estate would we make an acronym out of acronyms.
Bottom line is this: The new rules went into effect in October, and November was the first month where we saw a significant number of closings under the new law. As a result, many of those closings scheduled for November actually were delayed until December. This is also why the December numbers you have seen on the news recently were so high; lenders were able to get a better grip on processes to get the TRID loans closed on time.
If you have read this far and not fallen asleep, then you probably have one question on your mind: “What does that mean for 2016?”
Now that U.S. 401 Bypass is completed, we will begin to see development around it. I know most aren’t fans of the “superstreet,” or as some have called it, “the super confusing street.” However, it does lend itself to moving traffic around future development.
Currently, there are 74 homes on the market, with two-thirds of them built since 2015! New construction will continue to drive the market, and with the builders trying to meet price expectations, competition is fierce for low-priced and good-quality inventory.
If you are planning to sell your home in 2016, be prepared by making sure the home is updated and clean and has all of the deferred maintenance completed before the house goes on the market. More than half of the homes listed in Rolesville are between $300,000 and $400,000, making that price range very crowded. In order for a resale home to compete with new construction, the price will need to be significantly lower than the new construction price. Buyers will choose new and the exact colors they want over renovation projects that would need to be completed before they move in.
That pricing is consistent with what we are seeing in other areas of Wake County. If the home is below $300,000, then time on the market will be significantly shorter; if above, expect three to four months on the market unless you are very competitively priced. In other words, if you try to max out your sale price, you will likely make more mortgage payments on a house you are soon leaving behind. The smarter move is to price it right and sell it fast.
I do expect to see some price appreciation this year in the neighborhood of 2.5-4%, which is solid. That will remain likely as long as there is not a significant event in the world that would suddenly send world markets reeling. Some might say that the drop in the stock market over the first two weeks of the year is enough to cause concern, but historically when the market is down at the beginning of the year, it finishes strong.
Another factor that some don’t think about is that rents in Wake County are skyrocketing. If you have thought about purchasing investment property, now is a great time to do so. Make sure that your agent understands the difference between “Return On Investment” and “Financial Management Rate of Return.”
Brian Pate has been a well-respected real estate professional for over 22 years. During his time in the business, he has served as an agent, manager, coach, instructor and training manager. Brian leads a team as a mega agent at Keller Williams Realty in Wake Forest.