Leonard H. Craver

Leonard H. Craver
Leonard H. "Tony" Craver

Friday, March 3, 2017


     I hope stuff I find to be interesting reasonably resembles stuff you find interesting as well. This is a collection of true facts I have dug up about the area, in no particular order.
· According to “Nerd Wallet”, whoever that is, the top two months for getting a bargain when buying a home are January and February. I should have sent this Newsletter  out sooner. Homes average being sold  at a price that is 8.45% lower than the norm.
· In related news, Realty Trac says that the worst day to buy a house is January 19th when the average buyer pays 9.6% above the market value. They claim the best day to buy is October 8th. I detect some conflict in this January concept. I am glad it is almost February. You know what they say about statistics anyway.
· Home sales in 2016 were at 5.45 million units. That is the most since 2006 when  6.48 million units were sold.  Remember all of the warnings I have given you about being too excited about home sale growth rates in recent years. It is easy to make a number look good when comparing it to a lower number. Whereas I applaud the steady recovery rate of the past few years, please note that we are approximately one million home sales below 2006. We still have a lot of catching up to do.
· Many times when  I  go to make a listing presentation, one of the first things I hear from the seller is a list of things they have done to the house. They tend  to add the full cost of these improvements to their purchase price in hopes of recovering every penny. According to Remodeling Magazine, here is a list of the six most  popular renovation projects and their ROI (Return on Investment}. Hint: 100% means you can get all of your money back.  1) attic insulation… ROI 107%  2) Steel entry doors...ROI  90%   3) manufactured stone veneer...ROI  89%  4) minor kitchen redo...ROI  80%  5) new garage door...ROI  76%   6) window replacements...ROI  73 %.  I found this list amazing. What the average homeowners do not understand about spending money to keep their home nice is that some of it has to be written off to enjoyment.  This is why  I am amazed that a lot of folks wait until they are ready to sell to fix up their home.  Do that work gradually and enjoy the rewards it gives.
· Here is another interesting list from Daily Real Estate News. They have listed the top 10 design trends popular today.   1) open layouts (I can see Chip and Joanna knocking down walls)  2) neutral colors ( a little spice can be good for living but bland and blah may be good for selling )  3) multigenerational floor plans (sounds like something to confuse grandpa)  4) first floor masters    5) no dining rooms  (where do we put  grandma’s furniture)  6)  white kitchens  7) extra large garages  (finally a cracker jack idea)  8) big closets  9) finished basements with 9 foot ceilings (obviously they do not live in the Triangle)  10) barn-style sliding doors ( visions of Chip and Joanna again).
· Forbes says the top cities for investors are #1 Dallas, #2 Jacksonville #3 Orlando.  Charlotte came in at # 12 and Raleigh at #13. I am always a little suspect about list that include Raleigh or Durham. Out side of North Carolina a lot of survey-type folks tend not to  know the difference. Sometimes the two cities are lumped together, along with the whole Triangle and sometimes not. At least Durham folks were glad they included Raleigh in the bedbug list.
· The Triangle Business Journal had an interesting article on the scope of real estate investments by the three major universities in the Triangle.  The value of real estate owned by N C State is $2.16 billion dollars. They also own 2,955 acres of land in Wake County.  UNC has real estate valued at  $2.94 billion and maintains 20 million square feet of floor space. Duke’s real estate is valued at  $2.95 billion which just proves that stone cost more than brick. They maintain 15 million square feet of floor space but that does not include the hundreds of thousands of square feet they lease throughout Durham. Duke also owns over 9,000 acres of land, most of which is known as the Duke Forest. One side note: Duke just completed a new hotel as part of the Thomas Conference Center.  The 198 room, 7 story hotel cost $62 million. Oh yes, it is fully booked for the February 9th basketball game with UNC.


          As an amateur economist, I am going to share with you one of my secret ways to determine which way the economy is headed.  From the mid eighties until 2008 I would gauge the health of the economy by driving to Myrtle Beach and counting the number of cranes you could spot up and down the beach. Some years they were as far as the eye could see while in other years they were hard to find.
     Over the last year or more Durham has become the City of Cranes. Duke has done an extraordinary amount of building, over $2 billion  worth in the last ten years. It seems like it all happened in the past year or two. They have built research buildings, medical buildings, parking garages, hotels and athletic facilities including the fabulous new press tower with luxury boxes at Wallace Wade Stadium.
      Every where you have looked over the past year or two there have been cranes building five and six story apartment complexes housing thousands of units. Then there is the big crane downtown that is set up to carry building materials to the top of the 27 story Durham Center. Thanks to all of these cranes, Durham’s skyline is changing dramatically. Using my expert economic theory, Durham’s present and future is literally looking up.


           Not all news is good news. So in an effort to bring you the mostly good news and the occasional bad news, I must report that Orkin Pest Control publishes the Orkin Bed Bug List. Sadly, I report that Raleigh/Durham  is ranked # 12 nationally. Aren’t we proud. If you want to know where else you need to travel with a spray can, avoid Baltimore, Washington DC, Chicago and New York.


         I try not to brag about my grandchildren in this newsletter (except once in a while). I can honestly say that I love all ten of them equally so when I brag about one, I am not slighting another. A few of them have done noteworthy things recently so I am going to brag. My grandson Alex Nagy who lives in Clemmons, NC  recently earned his Eagle Scout a couple of weeks before his 16th birthday. This is quite an achievement. Did you know that between 10 and 12 percent of students at West Point, The Naval Academy and the Air Force Academy are Eagle Scouts. Four of the current cabinet nominees in Washington are also Eagle Scouts. Then there is my grandson Noah Mofield here in Durham who is quite a musician. He has been named to the National High School Honors Chorus which performs later this spring in Minneapolis—-pretty good for just a freshman in high school. Then, bringing up the rear (only because she is the youngest) is my granddaughter Effie Craver who lives in Columbia , MO. She recently brought home the gold medal in all four of her gymnastic events in her last meet. They must get all of this talent from their grandmother.

Saturday, March 5, 2016


Did you wonder why mortgage rates fell again slightly right after the
Fed raised the discount rate? Weren’t they suppose to rise? There are
several factors here for you to remember. The Fed rate is what the Fed
charges banks to borrow money. When the rate rises it directly effects
the amount of interest you pay on credit cards and non-mortgage related
bank loans. Mortgage rates are far more independent of the Fed rate
even though historically they follow the same trend. The big factor currently,
according to economists, is the lack of inventory in the real estate
market. There is a lot of competition for good properties making certain
markets look robust when the overall real estate market is mediocre at
best. For the time being these factors are holding down mortgage rates.


I am fortunate enough to be writing this newsletter from my hotel
room in San Antonio, Texas where my wife is attending several days of
meetings. We came down a few days early so we could see the city and
what it has to offer. This is the only major city in the continental US that I
had never visited. After all, it is not “on the beaten path”. I am still not
convinced I would want to be here in the summer, but when you can dine
outside next to flowing water in a short sleeve shirt in February, there is
something special going on here.
Did you know that San Antonio is now the seventh largest city in the
US? It also is the oldest continuous municipality in the country. Sorry Saint
Augustine. San Antonio was a city long before it became a part of the US.
What this town has done with its Riverwalk is amazing and you must take
the full river tour to appreciate it. A lot of cities have a nice specialty feature
but none are as extensive as the Riverwalk. The San Antonio river is
not a large river, barely wider than two passing water taxis’. They have
made 10 plus miles of it a park running through the city with beautifully
landscaped paths on both sides. In the center city area there are several
miles of the Riverwalk lined with restaurants with indoor and outdoor
seating. If you have not been here in a few years you will not believe how
much it has changed. What makes it so cool is that the river is over ten
feet below the city street level. This means you are in another world when
you stroll or dine along Riverwalk. This other world is a combination of
fine European architecture and cuisine and Disney World.
Our Texas daughter and her family joined us for two days. When we
told the grandchildren we were going to tour The Alamo, one of them said
“what’s that?”. That is like saying, “who was John Wayne?”. The Alamo
was a great tour and I certainly learned a lot of history. If you have read
these newsletters for a long time you know I occasionally like to tell you
about interesting places to visit. I especially like memorable meals and
special tables. Last night we ate at Las Canarias on the Riverwalk and it
was truly an all time top five dining experience complete with a top five
table. I can only hope that you get a chance to visit San Antonio some
day, but if you don’t, “Remember the Alamo”.


Every four years is a special year. We have elections and Olympics.
The Olympics are far more fun to watch. The only fly in the ointment
this year is actually a mosquito invading Rio with the Zika virus. I think I
will watch the Olympics on TV. The elections will be far more important
and will perhaps, more than ever, determine the direction this country
takes going forward. I am at least smart enough not to offer any direct
political opinions in this newsletter, but we will explore some of the issues
that effect your desire to own real estate.
I am going to discuss what is going on with the economy by dividing
the discussion into national issues and local issues. Nationally our biggest
economic problem is the looming national debt. 8 years ago our
debt was 40 % of GDP (total goods and services we produce). Today the
debt is 75% of GDP. There have always been economists who have
equated equal GDP and debt as the mystical economic cliff, but they
really never thought we would get there. In the last quarter of 2015 our
GDP grew at a pathetic 0.7% when 3% is our goal. The US has the only
economy on the planet on the plus side, however, even if barely.
Did you know that only 37% of adults have enough savings to pay a
$500 car repair bill? Nationally we need millennials to get involved with
the economy and the housing market, but they are struggling. Rents
across the nation are averaging $1,180 a month, an all time record. Purchasing
a house is even tougher for these newcomers to the workplace.
In two of the best markets for millennials, Charlotte has an average
house cost of $180K which requires a salary of $49K a year and Raleigh’s
average house is $230K, which requires a salary of $63K per year.
In the Triangle we have been blessed with an above average economy.
Rapid population growth has overcome many negative effects of a
slow national economy. United Van Lines says North Carolina is the 5th
leading place where folks move. There is an endless lists of “best of’s”
where various Triangle towns appear. One of my recent favorites was
Forbes Magazine naming Durham as the #1 city in the US for working
women. The average income for a working adult in North Carolina is
$44,969. A survey of each of the 100 counties in the state shows that
Durham, Orange, Wake and Mecklenburg (Charlotte) counties’ average
income is more than 10% above the state average. Forsyth County
(Winston-Salem) was the only other county above the state average.
The nation may be walking a tightrope economically but the Triangle
is a solid investment. For the time being mortgage interest rates
seem to want to be slow to rise while home prices are increasing at a
solid pace. This of course means it is a good time to buy. And with inventories
at record lows it is a good time to sell. In the long run your home will
 continue to be your best investment.