Jan Wynns has almost 30 years of real estate experience, and is a long-time Triangle resident. She has been a landlord and “rehabber” and understands real estate investing and investors. Wynns has also been invited as a featured speaker at several out-of-state seminars designed for those interested in real estate investing outside their home area. Wynns is a member of Triangle Area Real Estate Investing Association (TREIA), the TREIA Rehabbing subgroup and regularly attends both local and national real estate investment seminars to keep up to date with the real estate investment world.
Jan Wynns, Raleigh REALTOR®
Jan Wynns' first association with Fonville Morisey Realty began in 1978. She remained in real estate until 1988 when she took a leave of absence to recruit computer personnel for high tech clients in Research Triangle Park at the height of the ‘90s technology boom. Wynns maintained her status as a Real Estate Broker, knowing she would eventually return to the real estate industry. And, in 2002 she rejoined the Fonville Morisey real estate family.
NuWire: What about the Raleigh market should be exciting for investors?
Wynns: We are undergoing an extraordinary revitalization in downtown Raleigh. You can see five or six cranes in the air, hard at work in downtown Raleigh. Our skyline is adding a 400-room Marriott Hotel; RBC’s new headquarters building and plaza will have 33 floors; a new convention center [is] opening in 2008 with a half a million square feet; a 31-story office building called “The Raleigh”; a boutique hotel with 120 rooms and another hotel with 150 rooms; along with 2,500 condos currently under construction.
By the end of the decade, it is expected we will have 10,000 people living downtown.
That is one of the exciting things for investors to know—that our downtown is coming alive. Because of our high tech job base, we added 37,000 new jobs to our employment base last year, and it's looking like this year will top that. And, too, as far as relocating buyers, we have 39 families a day who move to our area. So what we have going on here is pretty exciting, and two of the main reasons they come here [are] because of our jobs and because of our wonderful education system in Wake County.
NuWire: From what you've seen, how has the Raleigh market changed over the last few years?
Wynns: The Raleigh real estate market has always been a slow and steady and pretty predictable market. It just kind of lopes along, adding jobs, and showing the steady growth we have seen over the years. Actually, we prefer it that way—slow and steady—because when appreciation is going through the roof, you can always expect a downside and that's when a market becomes vulnerable and [can] go off the deep end, so we like to see the slow and steady growth.
Now, I do have some statistics for you about the appreciation rates in our area. This comes from the Federal Housing Enterprise Oversight site. In 2004, our appreciation rate was 2.85 [percent]. In 2005, it was 4.78 [percent]. In 2006, it was 6.9 [percent]. In the first quarter of this year, it was 7.07 [percent], which is the highest it's been in 10 years.
So you can see, we are not soaring, but we are riding a nice little wave here....These figures take into consideration resales and new construction. Some neighborhoods will have double digit appreciation, some will have 2 and 3 percent, just depends on the area. So we see little change, but it's good solid change and growth.
NuWire: Which areas of the city in your opinion are currently experiencing the greatest amount of growth, and why?
Wynns: The North Raleigh area where a lot of our more affluent population live will always be popular, as well as Cary, North Carolina.
The southeast Raleigh area is experiencing a great deal of growth. That is going to be our more speculative area for investing....The southeast Raleigh area has not been stellar as far as past appreciation...maybe between 1 and 3 percent, nothing real exciting. The southeast is where a lot of our modest income families live.
But what has happened in the southeast Raleigh area, right smack in the middle of it, someone has purchased 600 acres, where they are going to build 2,400 homes around a golf course. And with these new homes will come the shopping and the big box stores and offices. This is going to be a wonderful, wonderful boost for the southeast Raleigh area. I am anxious to see how this new development will impact this area.
Although this is a bit more speculative than some of the other areas...here's an area that has this surge of energy going toward it, so you might think the neighborhoods around there would experience growth too, and that's what I'm thinking will happen.
I have been selling investment homes in some of the adjoining neighborhoods...because I think that it will prove to be a very good investment for the future.
Now, another area that might be considered more predictable is the Holly Springs and Apex areas. There are new roads coming in that will make this area more accessible to the employment centers. Some of those will have the modest to moderate income housing available, and that's where investors tend to look because it provides a good rental market especially due to fewer people being able to qualify for a home loan of their own. Holly Springs and Apex over the last couple of years have shown good appreciation—5 to 6 percent—and not the modest appreciation like in the southeast.
If you're more of a speculative investor, the southeast Raleigh area would probably interest you. But if you like something a little bit more predictable, the southwest Raleigh with Holly Springs and Apex might be a good choice.
NuWire: Which [areas] do you think would offer the best opportunity for investors who are interested specifically in maximizing their cash flow?
Wynns: Raleigh is a long-term buy-and-hold market. This is not a short-term buy-and-flip market. And you're going to make your money on your appreciation. Cash flow is very difficult to get in our area. You can get better cash flow in southeast Raleigh. Of course you can always get cash flow—it just depends on how much you want to put down.
NuWire: In your opinion, which areas would represent the best opportunity for people interested in capitalizing on their long-term appreciation?
Wynns: The southeast Raleigh area I think is, although it could be considered a little bit more speculative, I think that that would certainly be something for someone to consider because of the new development that's coming in.
I was showing property the other day and drove by and the graders are still out there pushing dirt around. They haven't even built anything yet, but they're moving a lot of earth. This is the early stage, and the time most investors like to get in.
Cary is always a wonderful market to invest in. They also benefit from our wonderful Wake County schools. We have a county-wide school system. And our Wake County schools are nationally ranked; it's just absolutely a wonderful education system, and that's what draws many families to the Raleigh area.
So...the southeast Raleigh area because of the new development going on, and the southwest Raleigh area and Holly Springs, Apex, Morrisville, Cary.
NuWire: Which...areas would be best for investors interested in doing rehabs and flips?
Wynns: Let's go back to downtown. We've got so much going on downtown. A lot of our downtown neighborhoods were built around the early 1900s. A lot of the housing is in deplorable condition, with spongy floors, and people are still living in these sub-standard houses—it's really an embarrassment.
In selected blocks downtown, you can see neighborhoods undergoing a lot of rehabs. It's wonderful to go through town and see an almost new looking home that looks charming because they've used the basic structure of the house and kept the porch and the nice architectural details that maintain the integrity of the homes in the downtown area.
It's wonderful to go down there and see what is happening. I do rehabs myself and I'm always looking for properties in the downtown area because it is quite easy to see where the trend is going.
NuWire: Are there any other trends, whether economic, demographic trends, housing trends...within the Raleigh area that you think investors should be aware of?
Wynns: At one time, condos and townhomes were the stepchild of real estate in the Raleigh area, but we've seen a comeback. And condos downtown—that's a separate issue. The condos downtown are appealing to the professionals who work downtown and/or who like to play downtown. And they may work at the Research Triangle Park, which is where a lot of our jobs are...and like to play downtown because we've attracted an interesting nightlife with nice restaurants and music and new clubs and theater...[in] the downtown area due to the revitalization. So the downtown condo market is one of the ones for investors to consider; however, they are high end and more speculative.
Recently, townhomes have captured a higher percentage of our residential sales market. So we're paying more attention to townhomes than we used to. As a rule, I usually don't recommend townhomes to investors except when they're in certain geographic areas: for instance, North Raleigh, or Cary or an area that has shown strong appreciation.
As a note—if you do consider investing in a townhome, you must get one that has at least a one-car garage. It sets it apart from all the other townhomes for rent or sale.
NuWire: What other areas do you see having future opportunity for investors within the market in Raleigh?
Wynns: We have a beltline system; an inner beltline (Interstate 440) that has encircled the city for many years and provides great access to everywhere in Wake County, and our outer beltline, Interstate 540, will provide an additional access point. This road is about 40 percent complete and also links to 40. When this opens, it will really expand access to all areas of Wake County.
I-540 is opening up a lot of our smaller outlying towns like Knightdale, Wendell and Zebulon. I look at the Triangle area residential realty statistics every month, and I see the extraordinary growth that they have experienced. This is all due to the outer loop opening up their area and cutting their access time in half in some instances.