Everyone in the real estate market has been waiting and hoping for some good news; well today we got it. Activity and tone of the Moore County (Pinehurst/Southern Pines) market has been very good over the past six weeks. Today I received the results from May, things are up dramatically!
The month of May represented the best month in real estate since May 2008. Year to date sales volume is up 13.6% over 2011. Units sold is up 8.9% and the average sales price is up 5.2%. Even more dramatic is the growth in new home sales, up 36% over 2011 with an increase in units of 45%. Average sales price is down by 13.6% as builders are choosing to build more modest homes.
The improved market was seen across all price points as unit sales between $300-$400,000 more than doubled and homes from $400-$500,000 increased by 60%.
I have a full complement of the supporting statistics and would be happy to share these with anyone with an interest, give me call of drop me an email.
I can't help myself "I told you so!" The signs of improvement have been evident since the fall of 2011; May is just the first month of significant improvement with more to come through the end of 2012.
Bob Barmore
Broker & Chief Economist
Weichert, Realtors-Larose & Company
Southern Pines, NC
Wednesday, June 20, 2012
Tuesday, May 22, 2012
The Economic Case for Rental Properties in Pinehurst
With home prices low and financing costs at historic lows,now is the time to consider investing in a rental property. Rents are at all time highs creating a great investment opportunity.
Consider this very real example:
1240 Morganton Road, Pinehurst is currently listed for sale for $165,000.
Assume:
You can buy it for $158,500 (96% of list price).
You can finance 80% of the purchase price at 4.25%, $126,800 mortgage and $31,700 down payment
Your monthly mortgage cost is $621.60 + $110 taxes + $75.00 Insurance = $806.60 total monthly cost
This home has been listed for rent at $1,300. Your potential monthly net is $493.40
This generates a return on invested cash of 18.6%. Plus you get the tax benefits associated with rental properties and the potential increase in value of the home as real estate prices increase.
This is not a special case, there are hundreds of opportunities just like this across the market. If you have the capacity to qualify for a mortgage, this is a great time to buy real estate for investment purposes. Where else can you get a comparable return while owning a real tangible asset.
This analysis ignores the potentail windfall associated with short term rentals relating to the 2014 US Mens & Womens Opens to be held in Pinehurst. This specific home could rent for as much as $15,000 to $18,000 during this two week event.
Bob
Consider this very real example:
1240 Morganton Road, Pinehurst is currently listed for sale for $165,000.
Assume:
You can buy it for $158,500 (96% of list price).
You can finance 80% of the purchase price at 4.25%, $126,800 mortgage and $31,700 down payment
Your monthly mortgage cost is $621.60 + $110 taxes + $75.00 Insurance = $806.60 total monthly cost
This home has been listed for rent at $1,300. Your potential monthly net is $493.40
This generates a return on invested cash of 18.6%. Plus you get the tax benefits associated with rental properties and the potential increase in value of the home as real estate prices increase.
This is not a special case, there are hundreds of opportunities just like this across the market. If you have the capacity to qualify for a mortgage, this is a great time to buy real estate for investment purposes. Where else can you get a comparable return while owning a real tangible asset.
This analysis ignores the potentail windfall associated with short term rentals relating to the 2014 US Mens & Womens Opens to be held in Pinehurst. This specific home could rent for as much as $15,000 to $18,000 during this two week event.
Bob
Wednesday, February 1, 2012
Moore County NC Rentals
The downturn in the real estate market and the current state of the mortgage industry's much higher credit requirements has created a boom in the residential rental business. Home owners unable to sell their homes have welcomed the influx of renters looking for temporary housing. Renters are coming form many sources. Many need to relocate but cannot sell their existing home, this is especially true of many of our military personnel. Younger individuals have witnessed the calamity of the housing crash and are unwilling to take the risk of losing 10 or 20% of a homes value, they have no confidence in the "appreciation" of real estate which their parents took for granted. Perhaps the largest number of renters has been created by the much elevated credit requirements imposed by the mortgage industry, they simply cannot qualify or cannot make the required down payment.
Regardless of the source, homeowners and tenants have found each other and a rental boom has ensued. The growth has not been from the traditional apartment complexes but from individuals dealing with an unsold home and looking to move on. Given the choice of continuing to offer a home for sale in a very challenging market versus renting quickly and collecting a $1,400 monthly check, the choice is obvious. Rental rates have increased to historic highs. Current rental rates are often double what a corresponding mortgage would be. Homeowners, although not voluntarily, have become owners of income producing properties and many have found the experience quite enjoyable.
I have sat with many of my clients with homes for sale and discussed the options. While the market has improved, selling now will certainly "lock in" the real estate loss suffered during the housing crisis. To find the next motivated buyer often means reducing the price even further and appreciating that few full price offers can be expected. While the homeowner waits, he continues to pay the mortgage, taxes, utilities, HOA dues, insurance and maintenance expenses. This can easily be hundreds of dollars a month waiting for the buyer to show up and make a "low ball" offer.
The rental option is truly a welcomed suggestion. Rent your home at historic rates (Moore County Ave. Rent is $1,400 for 2011), have a tenant pay the utilities, maintain the yard and in general look after the well being of the home. If one includes the tax benefits of a rental property, the choice is very clear. The additional benefit of allowing time to pass in the hopes of an improved real estate market only adds to the equation in favor of renting.
How do you rent your home? Much like selling your home you can either do it yourself or hire a professional. How does the homeowner find a tenant, check their background and credit, negotiate a lease, deal with routine maintenance issues, collect rents, evict deadbeat tenants, deal with security deposits while staying within the Federal & State laws relating to housing. I suggest this is a job for a professional and likely a staff of professionals all with different skills.
Coldwell Banker Advantage/ Sandhills Rentals offers a full service property management service to our clients. With a staff of three full time licensed agents and support staff to assist in marketing, accounting and daily "issues" makes the process routine. Over the past 12 months Coldwell Banker/Sandhills Rentals has gained a 38% market share of all Moore County MLS reported rentals.
Does your choice of property manager matter? Tenants care, they want to know that their needs will be met; professionally and promptly. Homeowners care because they are relying on the property manager to make prudent decisions regarding necessary repairs, accurately make payments and look after the home owner's interest. Sandhills Rentals does all this and finds tenants faster than the MLS average by a full week.
When you are considering renting your home, give me a call. I am happy to deliver the excellence of the Coldwell Banker/Sandhills Rentals team to your rental needs.
Bob Barmore
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