The year ahead: Residential real estate analyst Stacey Anfindsen
Biggest hope? That is a tough one to answer, given the number of people who move to the area on a daily basis. There are three observed headwinds in the residential market. My hope is each will be solved by market participants.
The first is observed in the supply of housing within or below the center ($300,000) of the price distribution demand curve. The residential development community is not able to produce product priced at these levels due to current land/lot prices, entitlement time frames/expenses and construction costs.
State corporate incentives to lure companies such as Microsoft and Fidelity produce jobs with six-figure salaries; new home products are and will be produced for these buyers.
Residents or transferees with service level salaries that qualify for houses priced below $300,000 look at listings that are predominantly resale. Inventory at these price points varies based upon time of year and seller motivations.
The second is observed pertaining to house price increases. While good for home owners, increasing house prices lower the number of alternatives for those with service-level salaries.
The third is observed pertaining to existing residences near urban or suburban cores. These residences are typically smaller in size with functionally obsolete elevations and floor plans. In their current state, they provide a lower priced option which can be afforded by those with service level salaries.
Numerous potential buyers in today’s residential market desire to be proximate to urban/suburban core amenities. This has produced an observed trend of razing obsolete residences and/or subdividing their lots followed by replacement with a modern residence. Price points for the modern residence are well above the demand curve.
Not only is this type of redevelopment removing an affordable housing option, it is not creating new ones.
Stacey Anfindsen has more than 23 years of residential experience in the Triangle as a real estate appraiser, educator and consultant.