I will spare you the agent-style market commentary that tells you everything is wonderful regardless of conditions. Here is what the Triangle actually looks like in November 2017 from where I sit.

Inventory is tight. Days on market for clean retail homes in good neighborhoods is running under 30 days, often under 15 in the better Raleigh and Cary submarkets. Mortgage rates are still around 4.0% per the FRED 30-year fixed rate series, which is keeping buyer demand strong. Cash investors, including me, are competing harder for distressed inventory than I have seen since I started doing this. And the spread between as-is and renovated has narrowed in some neighborhoods to the point where it is genuinely worth running the numbers carefully before listing.

This is a city-by-city look at where Triangle cash buyers are most active right now and what sellers in those areas should know.

Where are cash buyers most active in the Triangle right now?

Cash buyer activity in Q4 2017 is heaviest in inner-Raleigh teardown corridors, central Durham neighborhoods like Trinity Park and Old North Durham, dated Cary inherited stock around MacGregor Downs and Lochmere, and the older pre-1970 pockets near Carrboro in Chapel Hill. Apex, Holly Springs, and Fuquay-Varina remain retail-heavy because newer housing trades efficiently through the listing process.

Raleigh: Tightest Market in the Triangle

Raleigh inventory is the tightest I have seen in years. The 27604, 27607, and 27609 ZIP codes especially. Five Points, Mordecai, Cameron Village, anything inside the Beltline that is not actively crumbling is moving at or above ask within two weeks of listing.

Cash buyer activity is concentrated in two pockets. First, the older inner-Raleigh neighborhoods where teardowns and significant renovation projects are common. Investors are paying $180,000 to $250,000 for 1,200 square foot mid-century homes that need everything, then putting in $150,000 of work and listing at $480,000+. Second, the working-class east Raleigh and southeast Raleigh ZIPs where rental investors are picking up properties for buy-and-hold portfolios.

If you have a tired Raleigh property in either of those zones, you have leverage. Multiple cash buyers will look at it, the offers will be competitive, and the gap to retail is real but not enormous on properties needing major work.

What I am seeing close inside Raleigh in Q4 2017:

  • 1,400 sq ft 1955 ranch off Glenwood needing kitchen, bath, HVAC: cash sales around $215,000 to $235,000 depending on lot.
  • 1,800 sq ft 1980s home in North Raleigh needing cosmetic updates: cash around $260,000 to $285,000.
  • 2,200 sq ft 1990s home in Brier Creek in average condition: cash around $310,000 to $335,000.

If your home is in better shape than those examples, list it. The retail market is rewarding clean inventory hard right now.

Durham: Bull’s Eye for Investor Activity

Durham is the Triangle’s most interesting market in late 2017. Trinity Park, Old North Durham, Watts-Hillandale. These neighborhoods have moved from “transitional” to “established” in a hurry, and investor activity follows. American Tobacco and downtown Durham are pulling in tech tenants and restaurant workers and Duke faculty, and the inner-city neighborhoods are filling in fast.

Cash investor competition in central Durham is the most aggressive I see anywhere in the Triangle. We are not the only buyer at most properties. Sellers benefit from that.

Hope Valley, Forest Hills, and the more established southern Durham neighborhoods are quieter on the cash side because the housing stock there is generally in better condition and most of those owners are listing traditionally. The action is in the older, smaller, less-renovated stock north of I-85 and east of downtown.

A specific transaction from October: 1,100 square foot 1930s bungalow on a tight lot in Old North Durham, original everything, foundation issues. We paid $148,000 and closed in 11 days. Owner was the daughter of the original buyer. Three competing offers, all cash, all within $10,000 of each other. That kind of competition is normal in Durham right now and a good thing for sellers.

Cary: Quieter, More Specific Cash Buyer Profile

Cary is a different market. Most of the housing stock is newer (1990s and 2000s), most owners are first or second owners, and most homes need little to no work. The Triangle median home price story does not apply to Cary the way it does elsewhere. Cary’s median is over $400,000 and a lot of the inventory is family homes in good condition.

Cash buyer activity in Cary is concentrated on two specific seller profiles. First, downsizing empty-nesters in MacGregor Downs and Lochmere who do not want to deal with showings or stage a home that has 25 years of family memorabilia in it. Second, inherited homes from original Cary owners in their 80s and 90s who bought in the late 1970s and never updated. Those homes are typically dated but structurally sound, and they sell well to investors planning a cosmetic flip.

If you have a Cary home in either of those buckets, you should be getting offers from multiple cash buyers if you reach out. The tighter the inventory gets in Cary, the more aggressive cash bids become for the limited supply of older homes.

Chapel Hill: Specific Properties, Specific Buyers

Chapel Hill is its own animal. UNC professors, retiring physicians from UNC Health, and long-tenured Chapel Hill families. Inventory below $400,000 is almost nonexistent. Cash buyer activity is mostly happening at the low end of the market — older homes off Estes Drive, in Westwood, in Briarcliff, and in pockets where homes were built in the 1950s and 1960s and have not been substantially updated.

The Carrboro side, between Estes and the Carrboro line, has the most action. Smaller homes, older stock, more first-time investor activity. Southern Village and Meadowmont are quieter, since those neighborhoods are mostly newer, mostly well-maintained, and mostly sell traditionally.

Chapel Hill’s specific quirk: a higher-than-average number of properties owned by trusts, often set up by faculty for tax reasons. Selling out of a trust adds a step or two to the process but is straightforward if the trustee is responsive. We close those routinely.

Apex and the Western Wake Edge

Apex moves fast on retail and slow on cash. The housing stock is mostly newer, mostly in good condition, and most sellers are doing fine with the listing route. The cash deals I see in Apex are concentrated in the older central Apex pockets, like the historic downtown and the older 1980s and 1990s subdivisions off Salem Street.

Holly Springs and Fuquay-Varina are similar. Newer towns, newer housing, retail-heavy. Older outliers occasionally come up but they are not common.

What Cash Buyers Are Actually Paying

Sellers ask me all the time: “What percentage of retail does a cash buyer pay?” There is no single number. It depends on condition, neighborhood, and how much work the property needs.

For Triangle properties needing $30,000 to $80,000 of work, I am typically paying 65% to 80% of after-repair value, minus the actual rehab cost. The math is:

(After-repair value) x (0.70 to 0.85) - (rehab cost) = cash offer

So a 1950s Raleigh ranch worth $325,000 fully renovated, needing $65,000 of work, lands somewhere between $195,000 and $211,000 in cash. The seller’s question becomes: is that better or worse than netting around $240,000 after listing, less commission, less repairs, less carrying costs over four months?

Often, once you do the full math, the cash number comes within $15,000 to $25,000 of the listing net — and you save four months and 50 hours of headache.

What Sellers Should Do With This Information

If you have a Triangle home that needs work, you have leverage in Q4 2017. Cash buyer demand is strong, competition between investors is real, and the offers reflect that.

Three things to do:

First, understand what your home actually needs. Walk it with someone honest about the work. Not your agent friend, not your contractor brother who undershoots. Get a real number on a real renovation.

Second, run the listing math through to net, including commission, prep costs, carrying costs over the actual market timeline, and inspection concessions. The headline list price is not the number that hits your account.

Third, if a cash sale looks competitive, get more than one offer. We are not the only Triangle cash buyer. Other reputable buyers exist. A competitive process gets you the right number, not the lowest one any single buyer thought they could get away with.

Where I Expect 2018 to Go

If rates stay near 4%, inventory stays tight, and population growth holds, the Triangle will keep tightening through 2018. Cash buyer activity will continue concentrating on the older, condition-challenged, and inherited inventory. The spreads between retail and as-is on those properties will probably narrow further as competition increases.

If rates climb (and the NAR research consensus is they will, gradually), buyer demand cools, days on market lengthens, and the spread widens again. So a seller sitting on a tired property who has been on the fence for two years has, frankly, a window in front of them right now that may not be there in 18 months.

That is not me trying to push anyone. It is what the rate environment and inventory data suggest.

If You Want a Number on Your Home

If you have a Triangle property and you want to see what a cash sale would actually look like in this market, call us at (845) 316-1119 or reach out through our contact page. I or one of my team will walk it within a few days, give you a written number with the math, and you can compare that to whatever your agent is telling you about a listing. We work with tired landlords across the Triangle constantly. The conversation is free and the offer is real.