Cary, North Carolina
Welcome to my blog on Raleigh-Cary and the Triangle area of NC Real Estate. Here you can read current information on the Triangle area including neighborhood profiles, school information, taxes, market conditions, and even find things to do in the Triangle.
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Oct. 10, 2006
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I attended a luncheon at Hidden Lake North of Raleigh a week ago. The agents onsite had a lot of information about what a wonderful, gated community it will be. 
It's just a 20-minute drive northeast of cosmopolitan Raleigh, near the quaint town of Wake Forest. This planned community of only 124 homes will feature heavily wooded, rolling topography with generous homesites ranging from 1 to 6 acres, dubbed "Private Preserves" due to their size. When the nearly 600-acre community opens, the first phase will offer more than 40 homesites bordering a 75-acre private lake. In addition to the lake, Hidden Lake residents will enjoy an array of amenities ideal for those who love the outdoors.
Audubon International recently approved the site plan for Hidden Lake, which is the first step in achieving Audubon’s Three Diamond designation. Audubon International’s Three Diamond designation is its highest level of certification within its Gold Signature Program and indicates a superlative project based on protection of wildlife, water quality, and native flora and fauna, as well as green-building practices and site design.
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Acreage: 600 acres (240 hectares) |
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Recreation: 227 acres of open space, including a 100-acre park and an outdoor pavilion for community and family events |
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Biking Trails: Seven miles of bike paths |
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Walking Trails: More than six miles of paved and soft-surface trails |
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The Lake House: Will serve as the community amenities center. With a large gathering room with two fireplaces and a spacious lakeside veranda, The Lake House is ideal for both small and large parties. |
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The Boat House: Includes canoes, kayaks and paddle boat launches. A few electric boats will be available for communal use. The Boat House also features a fishing pier, allowing residents to cast their lines in the clear, spring-fed lake with large fish. |
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Lots: Homesites range between one and six acres and are expected to start in the $200,000's |
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Homes: Homes are expected to start in the $900,000's |
Let me know if you'd like any additional details by emailing me at Tracy@TracySantrock.com
Oct. 8, 2006
Categorized in: For Buyers
In some parts of the country (Florida and Arizona), a swimming pool is a must have. However, in the Triangle, a pool does nothing to increase the value of your home and can potentially drive away potential buyers.
I have had several clients in town recently from Florida, Texas, and Arizona. They are all used to having pools. I thought I'd write about the drawbacks of having a pool in North Carolina.
A small pool in the Raleigh/Durham area is going to run you a minimum of $10,000 to install. However, comparitavely, there is little value that is added to the home as a result of this "improvement."
In addition, if the potential buyer of your home has small children, the pool becomes a liability. Parents of young children consider swimming pools a risk. At the same time, the insurance companies consider them a risk and the rates will be higher.
Put that on top of the costs associated with operating a private pool, and the monetary impact is just too much to consider building one in the back yard.
To add a little more fuel to the fire, keep in mind that many communities these days have their own swimming pool. Also, there is an abundance of "members only" pools where a family can purchase a membership, so the need for a pool in the back yard is not as great as it once was.
For information on your particular market, consult your Realtor.
Sep. 15, 2006
Categorized in: For Buyers
Yup, the cliché is true: Buying a home is one of the smartest financial decisions most people will ever make.
Don’t take my word for it. What do I know? Take the Federal Reserve’s. Its Survey of Consumer Finances has consistently found a huge gap between the wealth piled up by homeowners and that accumulated by renters.
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Average net worth of homeowners vs. renters
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Annual income
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Owners
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Renters
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$80,000 and up
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$451,200
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$87,400
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$50,000 to $79,999
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$194,610
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$25,000
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$30,000 to $49,999
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$126,500
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$10,600
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$16,000 to $29,999
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$112,600
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$4,240
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Under $16,000
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$73,000
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$500
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Source: VIP Forum, Federal Reserve Board
Home ownership builds wealth in two ways: through the “forced savings” of paying down a mortgage, and through appreciation -- the rise in the home’s value over time.
The earlier you get in the game, the quicker you can get that appreciation working for you. The longer you wait … well, the consequences can be stiff.
’You’ll always be poor’
“If you rent, you’ll always be poor,” declares real-estate cheerleader and bestselling author David Bach, author of “Smart Women Finish Rich” and the upcoming “The Automatic Millionaire Homeowner.” “The longer you rent, the less likely you are to buy. You fall further and further behind.”
Those who wait for the current housing boom to crash may be waiting a long time. Prices even in the most overheated markets could plateau or just rise more slowly in the future, maybe even returning to the 6% average annual gain the National Association of Realtors says is the norm nationally. In the Triangle market we've been experiencing very slow and steady gains at 3.75% and only recently have seen 10%+ appreciation in the summer of 2006.
Bach acknowledges buying a home isn’t always the best choice. Sometimes you’re smarter to hold off and rent, postponing the day when you graduate to the ranks of homeowner.
But how do you decide if you’re being prudent or chicken? Don’t expect most “Buy vs. Rent” calculators you find on the Internet to be much help. Outlays for maintenance, repairs, insurance and utilities almost invariably will be greater for a homeowner than a renter, yet many calculators fail to consider the full impact of these expenses. And some expect you to predict events -- like future appreciation or how much your down payment would earn if invested in stocks instead -- that you can’t possibly know.
It’s a crapshoot
When I bought my first house, for example, North Carolina was experiencing its worst-ever real-estate slump. The property lost about 10% of its value in my initial years of ownership, then recovered to post a 20% price gain.
Not bad, huh? Except after considering all my outlays for maintenance, repairs and insurance, and factoring in the tax benefits, I determined that I had barely broken even when compared with the rent I would have paid during those six years.
Had I invested my down payment in an index fund that matched the Standard & Poor’s 500 instead, I could have tripled my money in the same period.
The case has been almost exactly reversed with our current house: The stock market has basically been treading water for the past five years. But our home has steadily appreciated over the past six years in the Cary, North Carolina market.
Tax benefits help, but not for long
Besides asking for the impossible, many “Buy vs. Rent” calculations -- and most discussions of home ownership benefits in general -- exaggerate the potential tax benefit.
Here’s a dose of reality:
At least half of the nation’s homeowners get no tax break. Some own their homes outright, but many don’t pay enough mortgage interest and/or property tax to be able to itemize.
If you do get a tax break, it’s probably less than you think. What matters isn't the total amount you pay in interest but whether all your deductions added together exceed the standard deduction amount.
The standard deduction in 2005, for instance, gives married couples who file a joint tax return $10,000 in "free" deductions, even for those who don't pay a penny in mortgage interest. If you’re a homeowner with mortgage interest and other deductions totaling $11,000 last year, the only advantage you would have over a renter who paid zero interest is an extra $1,000 in deductions. If you're in the 25% tax bracket, the $11,000 you spent garnered you a tax break worth just $250 -- so your write-off is worth about 2% of what you paid.
Even if you get a decent deduction now, that tax benefit will tend to shrink over time. Most mortgages are front-loaded so that you pay less interest, and more principal, with each passing year. At the same time, the standard deduction keeps getting adjusted upward, squeezing your tax break from both directions.
4 keys to profitable home ownership
You’re most likely to win by owning, rather than renting, if the following are true:
· You plan to stay put at least three years and preferably more. In most markets, it can take three to six years for a home to appreciate enough to offset the costs of selling and moving. (Bach thinks anyone who knows he or she won’t be moving in the next year should roll the dice and buy; I’m a little more cautious, particularly in overheated markets where you may need to stay put even longer than five years to ride out a real downturn.)
· You’re psychologically prepared. Home ownership means dealing with whatever comes up -- from noisy neighbors to clogged plumbing. You can’t just call the landlord for help or pack up and move as easily as when you were renting.
· You have some extra savings. Home buyers who spend every dime they have buying a house inevitably are blindsided by repairs, maintenance and all the other costs of owning a home. Then they go into debt trying to keep up their current lifestyle. Smart home buyers make sure they have an amount in savings at least equal to two mortgage payments after the deal closes, and preferably much more.
· You manage your money pretty well. That “forced savings” aspect I discussed above works only if you can keep your hands out of the cookie jar. Otherwise, it’s too easy to drain away your wealth with home equity loans and lines of credit. If you’re the kind of person who lives on credit cards and doesn’t know where the money goes, you’d be smart to clean up your financial act long before you go hunting for a house.
Sep. 14, 2006
I’ve been getting a lot of calls from investors around the country looking to expand outside their current market. As you may be aware there are many areas in the country that have seen a remarkable slow down in the real estate market. To the contrary, certain areas in the Triangle are continuing to see strong growth and low inventories. The main question I’m being asked is where would investors find the best returns?
July sales were down slightly in the Triangle, but overall we have achieved nearly 2% stronger sales year-to-date than 2005. Cary, Raleigh and the Triangle continue to win numerous accolades as the place to start a new business, the place to find affordable housing, the best overall employment & low cost of living, great weather and safest neighborhoods. Our area has been touted as having a terrific business climate and even one of the best places to meet singles. I guess all the downtown urban living trends have paid off.
These awards of national recognition and ratings have been a constant for over 20 years and show no sign of diminishing. It makes a very good case for long term growth. From an investors perspective, let's say the next 5-10 years look very bright for continued growth and prosperity in local Triangle area.
I do recommend high growth areas for maximum gain on residential investing. The bulk of out of state investing has been focused on new home development below 225k. The out of state investor wants to “get in” our market and “get out” fast. That may be just the right approach for some of the new homes neighborhoods. I see out of state investors that never drive across the state line buying many new construction homes on-line.
I recommend a longer approach to investing and would target areas close to new commercial developments such as Southpoint near Southwest Durham , North Hills, West Cary, and North Raleigh. I would say almost any home under 300k should be considered if it has premium location. Homes in these areas usually rent well. If the home breaks even from rental income verse mortgage payment – and is poised for maximum appreciation - it's usually a strong investment.
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