2013 Industry Trends

transcript

2013 INDUSTR

TRENDS

MEETING

. M. ,

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RON MIKESH

STACEY

ANFINDSEN

Orange and Chatham Market

Summary 2012Stacey P. Anfindsen

TARR Reportstimely, credible, market specific

www.tarreport.comStacey@staceypeter.com

2011 Migration

"1995""1996"

"1997""1998"

"1999""2000"

"2001""2002"

"2003""2004"

"2005""2006"

"2007""2008"

"2009""2010"

"2011"“2012”

19396 23992 29758 34718

Annual Closed Sales-All of TMLS

Orange County

11-Dec12-Jan

12-Feb12-Mar

12-Apr12-May

12-Jun12-Jul

12-Aug12-Sep

12-Oct12-Nov

12-Dec

3851 3833

24862285

1906 1859 1976

1521 1389

Monthly Showings

Orange County

End of Quarter Inventory New Home ReSale0

Inventory at Quarter End

"2006" "2007" "2008" "2009" "2010" "2011" "2012"

Orange County

"2006" "2007" "2008" "2009" "2010" "2011" "2012"0%

40% 40%

48% 46%

Percent of Inventory w/Price Drop

Orange County

11-Dec12-Jan

12-Feb12-Mar

12-Apr12-May

12-Jun12-Jul

12-Aug12-Sep

12-Oct12-Nov

12-Dec

106 102

Monthly Pending Sales

Orange County

"2006" "2007" "2008" "2009" "2010" "2011" "2012"0

227205 199

Fourth Quarter Pending Sales

Orange County

11-Dec12-Jan

12-Feb12-Mar

12-Apr12-May

12-Jun12-Jul

12-Aug12-Sep

12-Oct12-Nov

12-Dec

4636 40

129119

6053 55

Monthly Closed Sales

Orange County

"2006" "2007" "2008" "2009" "2010" "2011" "2012"0

20001765 1754

12751146 1142 1128

Annual Closed Sales

Chapel Hill/Carrboro HS District

"2006" "2007" "2008" "2009" "2010" "2011" "2012"0

1177 1142

847752 775 745

Annual Closed Sales

Average Sales Price Median Sales Price$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

$450,000

$365,000

$315,000

Fourth Quarter Closing Price Metrics

"2006" "2007" "2008" "2009" "2010" "2011" "2012"

"2006" "2007" "2008" "2009" "2010" "2011" "2012"$135

Fourth Quarter Median Sales Price/SF

0-149.9150-199.9

200-299.9300-399.9

400-499.9500-599.9

600-799.9800-999.9

1ml+Condo

TownhouseArea Total

Months of Housing Supply

Orange County

"2007" "2008" "2009" "2010" “2011” "2012"75%

91%89%

87%86%

98%97% 97% 97%

95%96%

Sales to Original List Price Ratios

FLP<OLP FLP=OLP

Orange County

"2007" "2008" "2009" "2010" “2011” "2012"0

136 131 135158

5064 72 80

Average Days on Market-LADOM

FLP<OLP FLP=OLP

Chatham County

End of Quarter Inventory New Home ReSale0

Inventory at Quarter End

"2006" "2007" "2008" "2009" "2010" “2011” “2012”

Chatham County

"2006" "2007" "2008" "2009" "2010" “2011” “2012”0

200178

136121 121

Fourth Quarter Pending Sales

Chatham County

All Housing New Home ReSale0

1000878

Annual Closed Sales

"2006" "2007" "2008" "2009" "2010" “2011” “2012”

Chatham County

"2006" "2007" "2008" "2009" "2010" “2011” “2012”0

Chatham County

0-149.9150-199.9

200-299.9300-399.9

400-499.9500-599.9

600-799.9800-999.9

1ml+Condo

TownhouseArea Total

106 7 7

14 1520

"2000" "2001" "2002" "2003" "2004" "2005" "2006" "2007" "2008" "2009" "2010" "2011" “2012”

FHFA House Price Index

Durham-Chapel Hill MSA

The Ugly• 7 of 11 price brackets in Chatham have an

oversupply of housing

• 63 month supply of 1ml+ housing in Chatham-down from 165 a year ago

• Detached housing at 600k+ in Hillsborough- 30 month+ supply

• 5 consecutive fourth quarter declines in the median sales price per square foot in CH-C’boro

The Bad• Orange average days on market increased to

142 versus 127 for 2011 closings

• The average days on market for closings in CH-C’boro increased to 150 from 135

• Both the average and median sales price for annual closings decreased in CH-C’boro

The Good• Orange unemployment rate lowest since 4/09,

employed workforce in 11/12 was the 3rd highest ever recorded.

• The number of price dropping sellers decreased 19% in Chatham and 25% in Orange

• Chatham annual closings up 21%, Orange annual closings up 13%

• 4th quarter median sales price and median ppf up in Chatham

The Future• Drop in months of housing supply should

stabilize house prices in some sections and could produce house price increases in other sections.

• Average year built of 2012 closed sales in CH-C’boro was 1986, average in Cary was 1998, average in South Durham was 1995……How will the older housing stock compete with alternatives in other parts of the Triangle?

PAMELA DAVIS, DAVIS APPRAISAL SERVICES

MARKET UPDATE - ORANGE, DURHAM AND CHATHAM COUNTY AREASJ A N U A RY 2 0 1 3

ANNUAL RATES OF APPRECIATION - A LOOK IN 2007

NATIONAL STATISTICS (FROM ZILLOW) SHOWS AVERAGE NATIONWIDE DECLINE OF 24% FROM MAY ’07 TO OCT ‘11

WHAT’S HAPPENED TO REAL ESTATE VALUES IN OUR AREA SINCE THE PEAK OF THE MARKET IN 2007/2008 ?

Most have declined in value

Most condominiums and townhouses were hit harder than single family detached homes

Land values in Chapel Hill area do not seem to have changed much (less than 10%) but there are fewer sales and longer marketing time

Chatham County has an oversupply of land/lots and the prices have dropped quite a bit.

HANDOUT

Have as much fun as you can until someone makes you stop

MY APPROACH – DATA ANALYSIS

ORANGE COUNTY – CHAPEL HILL NEIGHBORHOODS (DETACHED SINGLE –FAMILY)

NeighborhoodSales/Year

07/08Sales in 2012 % Change in

Northwoods 9.3 9 -6%

Webbwood 2.7 3 -8.6%

Chesley 3.3 3 -9%

Southern Village 25.3 31 -9.7%

Ironwoods 8.6 6 -10%

Stoneridge 5.3 9 -10%

Colony Woods 15.3 15 -12.6%

Meadowmont 28 14 -15.8%

Lake Hogan Farms 26 16 -18%

Westwood 4 5 -17.5%

DURHAM COUNTY NEIGHBORHOODS(DETACHED SINGLE –FAMILY)

Woodcroft 84 55 -7.6%

Parkwood 42.7 37 -8.4%

Grove Park 56 49 -13%

Southpoint Manor 15.3 9 -12.6%

CHATHAM COUNTY NEIGHBORHOODS(DETACHED SINGLE –FAMILY)

Polks Landing 8.6 6 -9.4%

Chapel Ridge 15.3 10 -8.3%

The Preserve 13.8 18 -13.4%

Fearrington 16.6 29 -9%

Governor’s Club 46 38 -18%

CONDOMINIUMS AND TOWNHOMES

07/08Sales in

2012% Change in

ValueCHAPEL HILL AREA

Summerfield Crossing 6.6 8 -12%

Kirkwood 3 10.6 -14.5%

Canterbury 7.3 10 -17.5%

Southern Village 15.3 15 -18.3%

Village Green 4 7 -25%

Meadowmont 11.3 11 -30%

DURHAM AREA

Woodcroft 72.6 42 -9.5%

Dunbarton 7.3 7 -15.7%

Falconbridge 13.3 8 -11.7%

CHATHAM COUNTY

Fearrington 10 13 -10%

WHERE WILL VALUES GO FROM THIS POINT?

Stabilize? Increase? Decline further?

MARKET ADJUSTMENTS

Sq.Ft adjustment $40- $90/ SF

Decks $1,500 - $4,000

Garage (1) $4,000 - $8,000

Garage (2) $8,000 - $15,000

Garage (3) $15,000 - $22,000

Basements (unfin) add $10- $18/sf

Basement Finished $ 35- $70

Bath 2 versus 1 add $5,000

Bath additional over 2 add $2,500-$4,000

Bath (1/2) add $1,500 - $2,000

Depreciation

Suggest .5 – 1.5% per year (on cost approach)

Consider:

Adverse influences- Functional depreciation –

Adjust for and consider the impact of functional obsolescence such as a poor layout, extreme decorating, excessive costs for upgrades or specialty items

Consider external depreciation ie: high traffic road, power easements, steep driveways, poorly maintained nearby properties, close proximity to major highways (backs up to I-40)

Discount these properties about 3 -10% compared to other similar neighborhood properties without the negative influences

INFLUENCES ON LAND VALUE

Positive Negative

Nice view- lake, golf course Heavy traffic

Quiet roads Nearby large power lines

Well maintained nearby properties Airport flight paths

Nicely wooded (except large acreage)

Close to landfill, sewage plant, etc. (odors)

Very steep driveways or lots

Poorly maintained nearby properties

THANK YOU

OL I N

NC Real Estate Commission

Vic Knight – Vice-Chair

NC Real Estate Commission

(919) 875-3700

www.NCREC.gov

The MAJORITY of Complaints

1. Misrepresentation 2. Trust Accounts

The NEW Trend of Complaints

1. Scams ($$)2. Money Laundering

NCREC Rule Changes (Pending)

(To be Effective 4/1/2013)

NEW RulesAmended RulesRepeal of Rules

NEW Rules:

NCAC 58A.0116 – Handling of Funds ($$)

Belonging to othersNCAC 58A.0117 – Accounting of Funds ($$)Belonging to othersNCAC 58A.0118 – Trust Monies ($$)

Belonging to “Property Owners

Assoc.”NCAC 58A.2201 – Define – BPO & CMANCAC 58A.2202 – Requirements for BPO/CMA

AMMENDED Rules:

NCAC 58A.0103 – Registration of Assumed Name NCAC 58A.0108 – Requires BPO Record KeepingNCAC 58A.0503 – Renewal Fees from $40 to $45

REPEALED Rules:

NCAC 58A.0107 – Lengthy Trust Account Rules

“Worth”, “Appraisal” or “Valuation”

“WAV”

Do NOT use:

“Valuation”, “Appraisal” or “Worth”-----------------------------------------------------------------------

You can ONLY Use:

“Probable Selling Price” (or) “Probable Leasing Price”

2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 estimate0

Total Licensed Per Year by Exam

* as of December 2012

avg=2358std.dev.=355

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