Follow Up: Raleigh Condo Market

anonymous
09/12 12:43 PM

More homes were sold in 2005 than ever before in the history of recording home sales.  If you sold 1,000 homes in 2005, and this year you were projected to sell 850 - your sales are ‘down’ 15%...but the reality is, you’ve still sold 850 homes and you’re not hurting because of it.

For an interesting (and very balanced) power point on the housing situation in the country, check out the work of Lawrence Yun (Managing Director of Quantitative Research at the NAR, where he manages the Statistics and Forecasting Groups of the Research Division. He’s the guy who writes regular columns on real estate market trends, creates NAR’s forecasts, and participates in many economic forecasting panels, including Blue Chip and Harvard University Industrial Economist Council).  You can access that here- http://www.zanmonroe.com/docs/2007_Lawrence_YUN_Leadership_Summit.pdf

Smith
09/12 01:45 PM

The only reason that money homes have been sold, and the only reason the economy has been “strong” the last few years, is a direct result of the housing boom.  In other words, the housing industry has been driving the economy through more construction jobs, more mortgage lending jobs, more investment banking jobs for the real estate corporations, more sales at Home Depot & Lowes, more consumer spending because homeowners can borrow equity lines, the list goes on and on. 

Countrywide Financial (leading home mortgage company in the US) just announced they were eliminating 20,000 jobs this year.  How many other mortgage companies will eliminate jobs?  Home Depot and Lowe’s have announced over 10% drop in same store sales from last year.  Where are all the independant contractors going to find work?  Where will all the money that formerly-employed mortgage lenders and construction workers come from?  What about all the investment bankers on Wall Street that have been making over $300,000 per year in BONUSES ALONE?  They won’t be buying $150 steaks anymore, not as many $6,000 Rolex’s.  Let’s follow the money trail to extreme - even strippers, drug dealers, and casinos won’t be making as much money because there’s no longer happy, disposable, “free” easy money in the system. 

The housing boom has literally kept the ENTIRE ECONOMY afloat during what should have already been a recession, when the boom disappears, so does the money, so do the jobs, so does the disposable income.  If we won’t even see the bottom until 2008, how much worse will it get?  In other words, we’re heading into a recession.

In case anyone else was wondering, the NAR has a vested interest in saying the housing market is fine.  The National Association of Realtors wants people to buy houses so they can make more commissions.  How do you think this affects their perspective?  FYI, read the link in the original post, the NAR just lowered their forecast as well.

Barden
09/12 04:17 PM

I am really looking forward to this series, Mark.

David Williams
09/13 05:24 PM

Click on the link to read my thoughts and proposal to the problem of affordable housing, particularly in SE Raleigh:

http://www.williamsforraleigh.com/node/35

David Williams
At-Large Candidate for Raleigh City Council

JZ
09/14 12:37 PM

I read Mr. Williams notions of an “Opportunity Zone.”  I strongly disagree that Houston is a good example of a city of that prospered due to a lack of zoning.  Texas had oil which is what created Houston.  A lack of zoning allowed the largest oil refining port in the world to expand per the special interests of Big Oil and related industries.  It is what has allowed chemical plants to be located within blocks of residential neighborhoods. While economically the city prospers, the overall city is physically fractured.  Downtown Houston is neither walkable nor mixed in use nor the definition of a vibrant livable core. 

While zoning can be too restrictive, it can be utilized to provide positive growth patterning.  Being that Raleigh was never and will most likely never be a manufacturing center, my fears of what a zoning-free district would generate are not extreme.  However, development patterns do follow the lowest common denominator and therefor developers require particular guidance in what is appropriate and inappropriate for downtown development. Call that zoning or guidelines or architectural standards, I’m not sure.  But a standard of expectation must be set because the private sector is simply not egalitarian enough to be granted the right of self-policing.

In an era in which we will begin to see a fundamental shift in energy resources, it is important that planning and zoning ordinances reflect projected trends and needs.  Within the beltline is where the highest-and-best use of a parcel should be a REQUIREMENT.  Let’s go back to that issue of impact fees outside of the Downtown Core.  You want to offset downtown development costs in a city where land and real estate is over-valued?  Then make it more costly to build at the periphery where it takes more tax-payer dollars to distribute water, sewer and other infrastructure that it does downtown.  With zoning intact, you could change what the perceived value of SE Raleigh overnight. I believe that only through this process will affordable housing integrated with the urban fabric be possible because it adjusts land values based on the long-term cost burden rather than the hollow Real Estate market appraisal (numbers of bedrooms, baths, etc.).

I acknowledge that I am not 100% up to speed on Mr. Williams platform, but if he is truly “captive to no constituency or special interest” he should have no issues with asking the suburban developers to share an equal burden in making Raleigh a better city.

Chad
09/14 01:31 PM

Hear hear.

I’m not convinced that non-zoning would be beneficial. A lot of faith and trust would be placed on developers, entrepreneurs and small-business owners to create a flourishing mixed-use area as the plan intends. I just haven’t seen any precedent that would give me that faith. I can see it leading to the demise of southeast Raleigh, or worse a new urbanist community.

Mark
09/14 03:46 PM

I think this idea of Opportunity Zone is very intriguing.  However, I am skeptical of simply allowing an anything-goes use zone in such an undeveloped area.  Free zoning works better in established, more urban neighborhoods, but what SE Raleigh needs is careful planning and smart growth/development.

I generally believe that our zoning should be more malleable and less absolute.  There are so many facets of our existing zoning ordinances that need attention before we can simply write new ones and ignore what we know doesn’t work well.  Perhaps a reassessment of setback, street, and parking requirements is more in order.  How about implementing requirements for a sort of layering of transportation (pedestrian, bicycle, automobile, bus, etc.)  Let’s work hard with what we already have to make it better.

As JZ pointed out, Houston is probably more an example of what you don’t want your city to be like.

Georgia
09/17 02:44 AM

Good discussion.

JZs post: “While zoning can be too restrictive, it can be utilized to provide positive growth patterning.” Then Chad’s post: “There are so many facets of our existing zoning ordinances that need attention before we can simply write new ones and ignore what we know doesn?t work well.”

Puts us squarely in the middle of the problem—when things are looked at as rules to live by, they do not allow for reason and common sense to rise up voluntarily by those pushing the envelope. So we end up having to dictate specifics.

But it is true: ” ... development patterns do follow the lowest common denominator and therefor developers require particular guidance in what is appropriate and inappropriate for downtown development. Call that zoning or guidelines or architectural standards, I?m not sure.  But a standard of expectation must be set because the private sector is simply not egalitarian enough to be granted the right of self-policing.”

Leads us back to zoning.

Atlanta’s work out on the new zoning regulations matter included a task force with, and this is from the AIA statement, everyone at the table:
<<The organizations partnering to address this issue include the Atlanta Chapter of the American Institute of Architects, the Atlanta Planning Advisory Board, the Greater Atlanta Home Builders Association, the Georgia Chapter of the American Planning Association, the Atlanta Chapter of the National Association of the Remodeling Industry, the Georgia State University Heritage Preservation Program, the Georgia Trust for Historic Preservation, the Atlanta Preservation Center and realtors from various sections of the City.  Use the “Atlanta Infill Web Links” web page to visit the web sites of these organizations. architects, planners and public policy types and residents. >>

They came to the table after the matter was forced on them by a moratorium, but the professionals took the task seriously. The AIA-Atlanta documents are found here:
http://www.aiaatlanta.org/Independent/index.cfm?Fuseaction=atlantainfill