Want to buy a house in Raleigh?
Here’s what you need to do:
1. Come to the table with a clean offer (meaning don’t ask for anything—no closing costs, no warranty and no price reduction).
2. And if you can offer all cash, that’d be great.
With 30 years in the real estate industry, Amy Butler says she’s never seen a market like this—with inventory and days on market so low.
“The competition is what makes it so hard,” says Butler, the vice president and sales manager of Fonville Morisey’s Glenwood office. “Ten percent of sales this year in our office were total cash; 70 percent of that 10 percent was under $300k; that’s a lot of investors.
“They’re coming from as close as Charlotte and as far away as Hawaii,” continues Butler, “and sometimes they’re younger people whose parents are helping get them in it.”
Raleigh is one of about 20 cities nationwide seeing a surge in cash sales from 2014 to 2015, while other markets, including South Florida and Los Angeles, are experiencing fewer cash sales, according RealtyTrac’s 2015 mid-year Home Sales Report.
Quite simply, cash offers are secure and require less red tape.
“Cash buyers, if it’s the same offer exactly, I’m always going to choose the cash offer,” says Gina Gilliam, realtor and owner of Gilliam & Associates Realty. “I don’t have to worry about an appraisal with a cash buyer in a competitive situation.”
Raleigh Realtor Molly Bonis says the all-cash trend often puts conventional buyers at a disadvantage; she’s working with one client now who’s buying with an FHA loan.
“Certain neighborhoods and markets are so competitive, they’ve had multiple offers and have said if you’re not offering cash, we don’t even want to talk to you.” says Bonis, who works with Fathom Realty.
Offering cash used to mean you could negotiate on price because cash offers weren’t that common. Not the case today; you could be one of several cash offers, which could mean you offer more but definitely not less.
The Silver Lining
If you’re looking to buy in Raleigh and feeling locked out, don’t worry; the tight inventory won’t last forever. Like most things, real estate is cyclical.
And if you’re willing to look in the ‘burbs, inventory in certain price ranges (400-600K) is more plentiful due to new construction.
“That creates an opportunity in our area for buyers,” says Gilliam, who sells in Cary, Apex, Morrisville, Holly Springs and Fuquay-Varina.
By the Numbers
The fourth quarter of 2015 showed it’s still a seller’s market, according to the Triangle MLS Market Update. Here’s what happened in 2015:
Inventory decrease from 2014: 12%
Increase in homes sold over list price: 10%
Increase in new home listings: 14%
Decrease in re-sale listings: 23%
Top Cash-Sale Market in the U.S.:
• New York
• Greenville, SC
• Knoxville, TN
• Raleigh, NC
• Providence, RI
• San Jose, CA
• Seattle, WA