IS DURHAM BECOMING A HOT BED FOR FIRST-TIME HOMEBUYERS?
Over the past few years, Durham has seen a definite upswing in basic homeownership. Courtney James of Urban Durham Realty explains that this upward trend is due to the city’s exciting employment opportunities and affordable housing, qualities that make it particularly attractive for first-time homebuyers.
WHAT TRENDS ARE YOU SEEING IN DURHAM HOMES?
Courtney and Gail Crabtree of G. Crabtree Home Building agree that there is a trend in first-time homebuyers purchasing older homes at a lower price point and then investing in renovating them rather than tearing down and building completely new properties. Durhamites seem to be conscious that older homes play an important role in preserving the city’s history, inspiring local investors to finance the remodeling of run-down structures. Gail adds that buyers are leaning toward purchasing older houses either in foreclosure sales or estate sales, and then completely redoing them in the style and design of the area. This is especially true in downtown areas such as Cleveland-Holloway and Walltown.
“In a lot of cases, the houses that have already been re-done get snapped up so quickly that buyers are having to buy something that maybe doesn’t look as good but is in a great location,” Gail says. “If the value is there for the neighborhood, it’s a great time to be remodeling.”
ON AVERAGE, HOW QUICKLY ARE HOUSES SELLING? WHAT IS THE AVERAGE NUMBER OF DAYS ON THE MARKET? HOW MUCH INVENTORY IS THERE?
There’s no time to waste if you’re thinking of buying a Durham home! Inventory is lower than demand, so houses coming on the market, especially in popular neighborhoods in and around downtown, receive multiple offers and sell rapidly.
According to Courtney, there are 1,100 active listings in Durham [as of press time]. This number will increase somewhat as the spring season goes on, but you should still act quickly if you’re interested in a property. Courtney says that the average number of days on the market over the past year has been 48, while Gail adds that new homes are typically on the market for less than 30 days. Many properties even go under contract before they are fully completed.
WHERE SHOULD A FIRST-TIME HOMEBUYER BEGIN?
Jim Sills, president and CEO of Mechanics and Farmers Bank, advises that the first step for every homebuyer should be to obtain a copy of your credit report and figure out your credit score. If there are any issues with your credit, you should resolve those problems before journeying any further down the homebuying road.
After ensuring that your credit is in good shape, our experts all agree that the next step should be to either reach out to an experienced real estate agent or get in contact with a mortgage lender. A real estate agent who knows the local market can discuss the ins and outs of the process with you and advise you on the best course of action for your specific situation.
“The market is competitive, and it’s critical to have someone who can guide you through the many steps of buying a home,” Courtney says. “Buying and selling houses is something we, as agents, do every day; our expertise is built on our consistent and varied exposure, so let us use that experience to benefit and educate you.”
If you have an existing relationship with a mortgage lender, talk to them to figure out your price range and how much you can expect to spend on a purchase. Don’t already have a preferred lender? A real estate agent can put you in contact with one.
WHAT ARE INTEREST RATES FOR MORTGAGES RIGHT NOW?
Low interest rates make this a great time to purchase a home, Jim explains. Current rates for first-time homebuyers are in the 3% range for 30-year, and even 15-year, fixed-rate homes. This means that your interest rate will remain at 3% from day one of your mortgage.
However, interest rates are expected to gradually increase toward the end of the year, so now is a great time to take advantage of this low point.
WHAT IS THE BEST TYPE OF LOAN FOR A FIRST-TIME HOMEBUYER TO APPLY FOR?
The North Carolina Housing Finance Agency offers an excellent mortgage program for first-time homebuyers, according to Jim. The program, the N.C. Home Advantage Mortgage, offers competitive interest rates and is considered very safe and affordable.
Jim also adds that this program is particularly useful for first-time homebuyers because it allows for a credit score of 640 and above. Most other major mortgage lenders require a score of 680 to 720.
The program is available through lenders at nearly 700 branch offices across North Carolina, including the Mechanics and Farmers Bank in Durham.
WHAT PERCENTAGE OF MONEY DOES A FIRST-TIME HOMEBUYER NEED FOR A DOWN PAYMENT?
Jim explains that a typical first-time homebuyer’s mortgage loan program allows you to put down as low as 0% and as high as 3% of the purchase price of a home. In other words, most programs will finance 97% to 100% of the purchase price.
WHAT ARE THE PROS OF BUYING A HOME RATHER THAN RENTING ONE?
Whether you buy or rent is highly dependent on how long you’re planning on staying in a community. Jim recommends that if you’re going to be living in Durham for five years or longer, it is better to buy. Courtney points out that the money you pay in rent is money that you will not see again, while mortgage payments allow you to build equity.
Both Jim and Courtney agree that with the current low interest rates, it’s a great time to invest in real estate. A low interest rate can make a truly noticeable difference in your monthly mortgage payments, so the value of obtaining a secure low-interest rate over a 15- or 30-year loan period will be tangible.
MEET OUR REAL ESTATE EXPERTS
Courtney James is the founder of Urban Durham Realty, a full-service real estate company devoted to the vibrant and diverse neighborhoods in and around Durham. Since launching the company in 2009, her vision has been to run an innovative business that’s as invested in the Durham community as it is in its clients. The company has grown to include 20 phenomenal agents who have led Urban Durham Realty to repeatedly win Durham Magazine’s “Best of ” Award for best local real estate company.
G. Crabtree Home Building – consisting of Gail Crabtree and Rama Mills – has built more than 400 houses in the Triangle area. Their signature homes feature exquisite craftsmanship, stylish design, open floor plans, highly functional kitchens, lots of windows and specialty tile work in the baths and fireplaces.
Jim Sills is president and CEO of Mechanics and Farmers Bank, headquartered in Durham. M&F Bank is a full-service community bank with total assets of $300 million and seven branch locations in five major markets within North Carolina. His background includes a unique combination of executive experience within large-scale banking operations, community banks and government organizations. He has more than 30 years of banking and technology management experience.