Real Estate: Q2 2016 Rolesville Real Estate Market Update

At the beginning of the year, I wrote in this column that I thought the stock market would rebound from its opening losses and that the Fed would have a hard time raising its interest rate more than two times this year even though the intent was to do four rate hikes. I also predicted a quick acceleration in the second quarter. So far, those things have happened.

On a real estate note, this has been the busiest second quarter in Rolesville real estate history. The total of 86 homes sold in Rolesville in the second quarter surpasses the 79 sold in 2014 during the same time period.  The market is still primarily driven by resale homes, although new construction accounted for almost 35% of the total sales.

The recognition Rolesville received from in April had many people asking about this great town. More than 50 families per day are heading to Wake County, and those looking for small town charm and amenities close by are flocking to Rolesville.

During the second quarter, there were 86 homes sold in Rolesville at an average of $305,064. That average sale price is an increase of almost $7,000 over 2015 Q2 numbers. In addition, the time on the market has shortened from 110 days to 69 days on the market for homes to sell.

The good news for sellers is that there is less than a three-month supply of homes for sale in Rolesville right now. That means sellers still control the market and are typically getting better prices and better terms for homes while buyers have to settle for what they can get.

Keep in mind that if a seller gets greedy and overprices the home, it will sit. Buyers have the same ability to research the market that sellers do, and the numbers dictate what a home is worth. Overpriced homes still sit on the market with little activity until the price is reduced to a reasonable level.

With all good news comes some bad. As we look at the rest of 2016, we know that every U.S. president since 1980 has inherited a recession from his predecessor. Don’t be surprised if that is the case in the next six months. Now that we know who the nominees are, we can see signs of the economy preparing for a slight dip.

Mind you, I’m not predicting anything like the “Great Recession” of 2007-2010.  I do expect to see a slight dip in the real estate activity based on a few factors:

* Job growth had one of the worst reports in the past four years in May, and that is because many people have just stopped looking for a job.  The numbers say there is less than 5 percent unemployment and does not count the millions who are no longer looking.

* The “Brexit” showed us how much of an international world we live in and how something that happens nowhere close to home can still affect us significantly.

* Consumer Confidence is lower than it has been in the past few years.

* The Fed held off on a rate hike in its June meeting and said it anticipates at least one rate hike before the end of the year. I don’t think that will happen until the December meeting after the election. That hike will remove some people from the possibility of being able to afford a home, and mortgage companies will begin making adjustments a couple of months earlier in anticipation of that potential hike. In addition, we will see stocks slip after the next rate hike, too, followed by lower consumer spending during Christmas if the hike happens as I anticipate.

Refinances have also turned upward in the second quarter. People are taking advantage of the value in their homes and low interest rates to take some cash out and do updates or renovations to their homes. Keep in mind that most renovations, if done well, will add some value to your home. Plan wisely and with resale value in mind and you will be OK in both the short and long runs.

If you are updating or upgrading, make wise decisions and don’t go overboard. If the value of your home dips and you have to move quickly, you could lose money in the short run.

All of this ties into the same thing I have said for years: Real estate runs in cycles. Usually these cycles are seven or eight years long, and we have been coming out of the last recession since 2009.  You do the math.

In general, when the real estate market goes down, values decrease about 20 percent of what they have gained over the previous seven to eight years. Then there will be another run-up just like we have had for the past three or four years. This cycle has been incredibly consistent since the 1970s, and there is no reason to believe it will change now.

If you are considering selling your home in the next year, now will be the opportunity when you can get the most money in the shortest amount of time.

— Brian Pate | August 2016