NC Weathering Real Estate Storm

Reed Construction Data, Building Team Forecast:
Raleigh, Austin and Charlotte are Most Intense Housing Markets in U.S.
Jim Haughey -- August 31, 2007

The most intense housing development in the U.S., excepting resorts and small college towns, is currently taking place in three mid-size southern cities: Raleigh, Austin and Charlotte. Homebuilding is increasing in each of these cities and home prices are rising from modest levels.

Financing is coming largely from prime, conforming mortgages. Home demand is from both existing residents, not forced to postpone buying by falling home prices, and from households moving into the area for jobs. Businesses and families are attracted by low operating and housing costs. In a strong economy, these sources of housing demand are insulated from the home-price and mortgage-finance problems elsewhere in the country.

New York Times, Business:
Drop Foreseen in Median Price of U.S. Homes
David Leonhardt and Vikas Baja, August 26, 2007
Graphic: Home Prices Across the Nation
Charlotte growth rate slows slightly but outperforms national median even when adjusted for inflation - only Portland & Seattle fare better.

Raleigh News & Observer, Business:
Housing Prices Up More in Triangle
Dudley Price, August 31, 2007

Triangle home prices in the second quarter rose despite a national housing slump that slowed U.S. price appreciation to its slowest pace in a decade, according to a government report.

Prices of existing single-family homes in Raleigh-Cary rose at a rate of 7.1 percent compared with a year earlier, the Office of Federal Housing Enterprise Oversight reported Thursday. Durham resale prices rose at a rate of 5.4 percent compared with a year before.

By comparison, prices nationally rose 3.2 percent, the agency known as OFHEO said. That was the smallest gain since 1997 and came as lenders tightened mortgage requirements.

"To this point, you've bucked the trend," said Michael Helmar, an economist for Moody's Economy.com, who tracks the Triangle housing market.

Triangle Business Journal
Triangle housing prices rise faster than national average
According to figures released Thursday, August 30, 2007, by the U.S. Office of Federal Housing Enterprise Oversight:

Home prices grew at a 7.1 percent annualized rate in the Raleigh-Cary Metropolitan Statistical Area, which includes Wake, Franklin and Johnston counties. The Durham MSA, which includes Durham, Orange, Chatham and Person counties, saw prices grow by 5.4 percent.

Nationally, housing prices grew at a 3.2 percent annualized clip - the smallest gain, OFHEO said, in more than 10 years.

There are warning signs for people who are vulnerable to property tax increases:

Sales of existing homes in the Triangle have slipped in recent months as low- and moderate-income borrowers have defaulted on their home payments.

But the area has avoided the worst of the problem, seen in states such as California.

New County Authority Referenda FAQ

Frequently Asked Questions regarding new county authority referenda from the NCACC

The 2007 State Appropriations Act (H1473) provides counties with the authority to levy either a land transfer tax (up to 0.4 percent) or a local sales tax (0.25 percent), following approval in a non-binding advisory referendum. H1473 creates two new articles under G.S. 105 — Article 60 for the local option land transfer tax (H1473 SECTION 31.17.(a)), and Article 46 for the local option ¼ cent sales tax (H1473 SECTION 31.17.(b)).

Question: Can a county hold an advisory referendum on the new revenue authority on the ballot of the municipal elections to be held this fall?

Answer: Yes, as long as the county is a “November” county in the upcoming municipal elections, and the county notifies the State Board of Elections of its intent to include the advisory referendum on the ballot no later than Sept. 4, 2007 (according to Director of the State Board of Elections). If the county is an “October” county (approximately 20 counties), it is too late to get the advisory referendum on the municipal election ballot. Please confer with the State Board of Elections and your local board of elections to determine whether you are an “October” or “November” county.

Question: What are the steps a county needs to consider when scheduling a referendum?

Answer: Any county that is subject to Section 5 of the Voting Rights Act of 1965 will need to submit its request for pre-clearance no later than Aug. 31, 2007. The State of North Carolina has already submitted its request for pre-clearance of the authorizing legislation to the U.S. Attorney General.

All counties must contact their local board of elections and the State Board of Elections in order to have the advisory referendum included on the ballot. See Question #1 for deadlines.

If a county is unable to get the advisory referendum on the ballot, it may call for and hold a special election. The special election may not be held within the period of time beginning 30 days before and ending 30 days after the date of any other primary, election, special election or referendum.

Question: Can the ballot include advisory referendums for both the land transfer tax and the quarter-cent sales tax?

Answer: Yes – both are authorized under state law. If both referenda pass, then the Board of Commissioners would have to choose which one to authorize, if they so desired. They cannot enact both.

Question: Must the Board of County Commissioners levy a tax if the voters approve a referendum for either the local option transfer tax, sales tax or both?

Answer: A Board of County Commissioners is not obligated to levy a tax if the majority of those voting in a referendum on either the land transfer tax or sales tax vote in support of a levy.

Question: Can a county stipulate uses of the monies on the ballot as a part of the referendum?

Answer: A county may not stipulate the use of the money on the ballot.

Question: Is there a prescribed format for the question of the ballot?

Answer: Yes. Legislation specifies how the question must be presented on the ballot:

Land Transfer:

Ballot Question – The form of the question to be presented on a ballot for a special election concerning the levy of the tax authorized by this Article shall be: '[ ] FOR [ ] AGAINST

Real property transfer tax at the rate of up to [X] percent [X%] of value or consideration.'

Note: The land transfer tax amount can be set at a rate up to .4%, in increments of .1%.

Sales Tax:

Ballot Question. – The form of the question to be presented on a ballot for a special election concerning the levy of the tax authorized by this Article shall be: '[ ] FOR [ ] AGAINST

Local sales and use tax at the rate of one-quarter percent (0.25%) in addition to all other State and local sales and use taxes.'

Note: The sale tax amount is set at a rate of .25%.

Question: When is the earliest the sales tax will become effective if the Board of County Commissioners levies the sales tax via resolution (following a referendum) during November 2007?

Answer: April 1, 2008, so long as the resolution levying the tax is adopted in November 2007. The sales tax may become effective on the first day of any calendar quarter so long as the county gives the Secretary of Revenue at least 60 days' advance notice.

Question: When is the earliest the land transfer tax will become effective if the Board of County Commissioners levies the land transfer tax via resolution (following a referendum) during November 2007?

Answer: Jan. 1, 2008, so long as the resolution levying the tax is adopted in November 2007. The tax may become effective only on the first day of a calendar month set in the resolution levying the tax, which may not be earlier than the first day of the second succeeding calendar month after the resolution is adopted.

Question: Are there restrictions on the use of either of the new local option tax revenues?

Answer: Land transfer tax revenues are expressly authorized to be used for any lawful purpose. The sales tax is not restricted or earmarked.

Question: If the referendum fails, can a county hold a subsequent referendum on the same question, and if so, must a county wait a certain period of time prior to holding another referendum?

Answer: Per Gerry Cohen (N.C. General Assembly Bill Drafting), there are no restrictions on resubmitting a land transfer tax or the new quarter-cent sales tax to the voters again if it has failed.

As with any local legal matter, we ask that you consult with your county attorney and county board of elections as you consider these local referendum options.

Public Problems and Campaign Corrections

$818,773.81 - that's the new running total spent by the NC Association of Realtors in trying to defeat local options for local governments. Lobbying reports released today showed that NCAR spent $148,835.51 in the month of July. About half that was spent on media time. Payments were also made to shills Sinclair and Crone through consulting firms Public Solutions and Campaign Connections. The pair recently announced a new poll that has serious credibility problems. Under the Dome tracked numerous errors in the poll, very publicly. Maybe they need new names: Public Problems and, Campaign Corrections.
[Update: I've had my fun with this one but I've since learned that a combination of haste and personal circumstance led to incomplete editing of the original poll data.]

Basnight on Transfer Tax

Senator Marc Basnight recently issued this statement in response to inquiries regarding the passage of the transfer tax local funding option.

Thank you for contacting my office regarding your opposition to the so-called “Home Tax” or transfer tax. I appreciate hearing from you about this important matter.

As you may know, the North Carolina General Assembly recently provided counties with the authority to put a transfer tax on the ballot for consideration by voters. It is important to understand that this action does not impose a transfer tax in any community in North Carolina – it simply gives voters the opportunity to decide this issue for themselves.

I supported this policy because North Carolina is a fast-growing state with many diverse communities – some of which may decide that a transfer tax is the best way for them to build badly needed schools, roads and other critical infrastructure. Others may decide this kind of tax is not appropriate for their community.

I also supported giving this authority to local governments because my colleagues in the House of Representatives insisted that it be part of an agreement to provide relief for counties from the cost of providing Medicaid health coverage to their citizens. For many rural communities, the cost of the local share of Medicaid has grown so large that it prevented them from investing in schools and other essential services. Relieving counties of this burden was a major goal of the Senate; however, the House demanded that communities be provided the opportunity to consider a transfer tax as a condition of the approving a plan for Medicaid relief.

While the Senate held out for months on this issue, an agreement was finally reached: counties would be provided relief from Medicaid costs as required by the Senate and the transfer tax authority would be given to local communities at the insistence of the House of Representatives.

I hope this information is help in understanding this complicated and important issue. Please let me know if I can provide you with any additional information or assistance.

Sincerely,

Marc Basnight

Please Don't Play Red River Valley

Stormwater run-off is not an abstract concept. Stormwater run-off is not a municipal election. It's what happens when someone upstream doesn't keep the dirt on their own property. Environmental protections may seem like an abstract concept but they are real private property protections that realtors and homebuilders would like to roll back in the name of housing affordability. How affordable is a house when you are knee deep in red mud?

Stormwater Runoff - Asheville NC 7-27-2007
July 27th runoff event below the Grove Park Cove development in Asheville. Follow a picture diary of this problem over the last year and check out the Mountain Voices Alliance to see how North Carolina's mountains are being eroded by development. Updated 11/17/12 with current video links.

Infrastructure Collapse: No Comment

Click image or here for BBC News Photogallery and read this report:  AAA: N.C. bridges need work