2 min read June 2022 — President of The Jim Allen Group, Jim Allen covered a lot of ground with Invest:. During his interview, Jim discussed the precedent of home appreciation in the past year, the future of home ownership in the Triangle and the benefits of the Coming Soon status. “People are buying community,” he said.
What trends do you see in new home construction?
New home construction is in a slowdown because there are no lots available, and it’s taking longer to get permits to develop subdivisions. Builders are not pricing their homes until they’re almost 100% completed. It’s not that less homes are being built. More permits are being pulled now than ever. The reality is they’re not hitting the market as quickly and some never hit the market at all. I have over 3000 inventory listings that only my team knows about right now, which is unique. Normally we try to expose a listing to the market as soon as we can, but because of the supply chain interruptions my builders are struggling with pricing homes. Then the homes sell in one day, so they’re never added to the inventory list. Another reason the builders are doing this is the 24.8% appreciation from last year, and they’re afraid of giving the price too soon and losing 2% of that investment per month by doing that. By the end of this year we’ll be at 25.8% appreciation for our market. When your numbers are going up that high, you want to wait to take advantage of that appreciation for as long as you can.
How are Coming Soon statuses affecting your market?
Coming Soon is a completely new selling method that both buyers and sellers are embracing, but our MLS is fighting it. It takes courage for a buyer to be willing to buy something based on pictures or write-ups. They’re aware that if they don’t strike they may not get that opportunity, and in utilizing this method it’s less likely to have as many competitors. It’s our job as the agent to fully understand the tools we have. Instead of fearing new things, I see Coming Soon as this exciting new way of selling. As a seller, I don’t have to have people tracking through my house during COVID and potentially exposing my family when they can buy from looking at the provided video or photographs and still have the confidence that it’s the best fit. Coming Soon has added a wrinkle to this market, which I’m super excited about. Unfortunately, we have people who are afraid of it because they think it’s impacting the market negatively. They believe we’re not truly tracking the days on market as well through this method; my argument back would be that a property is not fully displayed to the market during Coming Soon, so those days should not count against you. Right now, you can only do Coming Soon for 30 days.
What is the future of residential real estate in the Triangle?
We have created true urban sprawl, where areas that used to be located far out where no one wanted to live are now of interest to buyers. With remote work, we can live where it’s more affordable and less congested. With Apple and Meta coming to the Triangle, a lot of their folks will still be allowed to work out of their residences, which will in turn be a wider net of where they’ll be looking to purchase. Location has become less important. My borders are expanding in every direction. Five years ago I could have driven from one end of my market to the other in 45 minutes. Today it’s about a two hour bandwidth. We’re representing people in all of those markets, new and resale. My numbers won’t be down because I expanded the market I’m willing to be in. As we merge MLS’s this will happen more often.
What is your organization’s contribution to the Raleigh-Durham market?
We’re one of the few companies that produces their own listings, and it would be more difficult to buy a house here if we weren’t in this market. I started back in 2009 with tear downs because I can tear something down and rebuild quicker than I can develop lots, saving two years in getting lots to the market. However, just like everything else, that teardown process is becoming more difficult. The more I infiltrate markets, the more resistance the marketplace puts in front of us. Now we have more red tape, which is a mistake. Every city is either growing or dying.
The market is moving further out. Those who already live here are moving, putting money away and acquiring something a little further out. That’s because the spot they live in right now is changing, and as it changes they may fit into a new spot in the Triangle better. The people moving in want to be in the hotbed and are willing to pay enough to be in it. There’s a place for everybody in this market. Our job as agents is to educate ourselves on those outlying markets well enough so that we can present this alternative to the purchasers who are coming, instead of simply saying we don’t have anything to offer.
What significant developments do you have in the pipeline?
In 2021 we had over a billion dollars in sales volume, and we hope to see even more continued growth. Right now we’re seeing smaller lots and higher density. The average single-family homesite is not a 90- to 100-foot-wide single-family lot anymore – it’s a 30 ft. homesite with a rear alley garage. The new first or starter home is a townhouse or cluster home. It’s just changing. The millennial buyer is adaptable. They’re really excited about purchasing something different, and they like the fact that what they’re buying is not what their parents bought. Instead of being afraid of that, we should embrace it.
We try to create these alternative types of housing. We’re putting 611 houses in the ground featuring seven different types of houses that don’t exist in the market right now. I know consumers will buy them because they’re buying price, not the specific home plan. If your price limit is $300,000, it doesn’t matter what you buy, that’s what you have to spend. Now we’re creating the most unique, attractive solution we can. That means larger neighborhoods with between 600 and 1,100 homes within them. As long as you’re offering varying types of living, the market accepts it. We squeeze in the first home buyer to the last home buyer in one neighborhood where walkability is a main concept.
What is the future of home ownership in the Triangle?
People are buying community. My challenge going forward is figuring out what the next generation of housing looks like, because it’s a completely different product. The consumer can’t wait to get to it. I’m building these houses that are 22 feet wide and the coolest houses we’ve ever built. They’re fully wide open on the first floor so the living space, kitchen and family room are all together – perfect for entertaining.
The challenge is to create enough exterior uniqueness with the openness and livability in the interiors. There will be more two and one bedroom home plans. If they appreciate like everything else is right now, homeowners can upgrade and grow up with their houses. Homeownership and the dream of it is the most alive it’s ever been. Everybody wants to buy their own space and be a part of the community.
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