Housing Figures Increase In January/February...

As I write this post, we are awaiting the implications of sequestration and are learning that Americans took home the least amount of pay in years during the month of January BUT housing numbers are looking up.  What does it all mean and does anyone have a clue?  I am going with the emphatic "NO", but I'll still take a moment to pontificate on housing and related subjects.

The Winston-Salem Journal reported today that housing numbers were up 25% in January.  January typically being a slower month and not the usual beginning of the Spring market, what exactly does this indicate?  I will say that personally, I had a very strong January but it was on the heels of a strong 2012 4th quarter.  Rates are still low and buyers and sellers alike have a keen sense of awareness when it comes to their reasons to purchase real estate.  Still a great long term investment and the fact that everyone needs a roof over their head are but two of the compelling reasons to purchase a home.  Currently, we can deduct mortgage interest, but that may change if the President's wishes are full-filled and if our local NC legislature massages the tax code we might see additional fees and taxes on real estate and the actual transaction, making it less affordable for buyers and sellers to transact real estate. 

I personally believe that our local market has somewhat of a "bubble within a bubble" right now due to the visitation of an investment firm out of Malibu, CA who has entered our market after paying earlier visits to Raleigh and Charlotte.  This firm, American Homes for Rent, has been purchasing homes in newer subdivisions that are located within good school districts and are at or below market value. They are coming in with strong, cash offers, doing inspections, but requesting few repairs and are not conducting appraisals.  This has in turn, has allowed for sellers, previously held hostage by their home, to sell and purchase a new home that better suits their housing needs.  This injection of activity has been a huge boon to our market. I am not certain how many homes in the Winston-Salem area have been purchased, but I have had a handful myself, as have other agents in our office.  The News and Observer out of Raleigh, reported that American Homes for Rent, bought over 80 homes in the Raleigh area.

Upon researching the firm online, it appears that they do rent these homes nationwide and that this is part of an investment package that returns dividends to the investors of several funds.  It has also been reported that the group is having a hard time finding enough homes to meet the return promised.  That, I'm sure, is yet to be seen.

I have to speculate and wonder if this isn't the beginning of a low-income rental project that the government will put it's thumb in at some point, as it sounds just too good to be true.  I also wonder how this will effect our market and values long-term, given the fact that these rental properties will pepper neighborhoods that have struggled with foreclosures and property values.  Couple this with the recent tax re-evaluations and what you are left with are quite a few questions that remain unanswered.  I think that it's too early to be giddy about our market and signs of recovery but I am cautiously optimistic that this injection and spike of activity has been a refreshing start to what has been a sluggish past couple of 1st quarters.

Brooke