Stable Raleigh could be bellwether for what happens to southern real estate markets

: Nov 14

    Real estate voyeur that I am, I was excited to see lists of top selling agents and teams for 2006 in an advertising section of today's Wall Street Journal (along with half-page pats on the back from their national agencies extolling their hard work and successes). As you might expect, the big cities with expensive real estate - like New York and Chicago - lead the lists in terms of dollar volume by teams and agents. For example, I. Dolly Lenz in New York generated almost $750 million. Sweet!
   I was more interested in activity per market since that implies some vibrancy. Even as inventory levels rise, still a large number of sales indicate people are interested in living (or investing) in a particular area.
   Some curiosities emerge from the lists. Two of the top five agents by "sides," which is the total of listings and sales, are in Coeur d'Alene, ID, site of the famous floating putting green at the Coeur d'Alene Resort. Coeur d'Alene isn't the easiest place to get to, but the scenery must be worth the effort to get there. The team that generated the most sides nationally is located in Rainbow City, AL, a town I was unfamiliar with. It is a suburb of Gadsden which itself is something of a suburb of Birmingham, which seemed like an odd place to generate the most business transactions in the nation. It turns out the agency, RealtyBids, runs an online auction site that deals primarily in foreclosure properties. They are simply headquartered in Rainbow City, and their 1,603 sides for 2006 came from all over the nation.
   "All I am doing is just cleaning up the mess," said the company's CEO with only a passing reference of self-consciousness about capitalizing on the bad luck and bad loans of folks losing their homes.
    The 5th highest selling agent nationally was responsible for $157 million in sales in Avon, CO, in the mountains west of Vail and north of Aspen, which says something about the strength

Two real estate teams in Raleigh totaled $266 million in volume.

of the second-home market there; there isn't much industry beyond skiing in the area. Jackson, WY, had the 11th largest volume producer and Aspen the 14th.
We were impressed with the action in Raleigh, NC, which is on our list for a visit soon. Re/Max teams in the area did well in 2006, with one racking up $137 million in sales and another $129 million. Between them they generated more than 1,000 transaction sides, with a team from local competitor Prudential adding another 414. With the famed Research Triangle Park complex near town, Raleigh is blessed with a consistent stream of business transfers into and out of the area. Such a large and stable business presence has helped Raleigh (so far) to skate past the housing downturn nationally and have kept prices stable; indeed, the average selling price of homes in the Raleigh area rose 6% in September, compared with September 2006, to $243,000.
However, trouble signs may be brewing. Sales of existing homes in the area dropped 24% in September year over year, or 750 fewer homes, and most of the homes sold during the month were at the lower end of the market, implying a growing number of foreclosures. When greed mongers like Countrywide Financial and other junk loan providers sneeze, even healthy places like Raleigh catch a cold.