Deaton Investment Real Estate & The Wake County Apartment Association

Wednesday, March 16, 2011

Oil Prices and Real Estate

Depending on how closely you follow this issue you might be surprised at the magnitude of results from an internet search with the words "oil prices and real estate."
First, you will quickly learn that oil prices are going up. There is almost no debate about this fact, the only thing experts don't agree on is how much. Global oil consumption continues to rise as our world's ability to produce oil as near the peak. As I write, the average costs of a gallon of gas in Raleigh is $3.51 and estimates for 2011 and 2012 don't suggest we will see relief from these prices. The unrest in Iraq and Saudi Arabia (the two largest producers of oil) only adds to fears that oil supplies could be further restrained causing additional price pressures.

So, what do rising oil and energy prices mean for our economy as we continue with our "muddle through" recovery (borrowing a term from John Mauldin). Most folks quickly point to inflation and the overall rise in costs for all goods. As an owner of real estate, and more specifically apartments, you might think this is all good news and in general I would agree. Inflation typically means higher rents and an increase in values as interest rates rise and construction of new units slows.

However, you can't lump all housing into one category and assume the outcome will be uniform. After all, what is the first lesson you learn in real estate? Location makes a difference ... a BIG difference. I encourage you to consider the differences between housing in the suburbs and housing near urban and employment centers. Will the desire to commute 30+ minutes to work increase or decrease as gas prices rise? Will access to public transportation or walkable living environments become more desirable during an inflationary period?

I believe we could be on the verge of an interesting cycle in the real estate market. While inflation could push all housing prices up, you can make a case that homes and apartments close to employments hubs, retail or shopping centers and downtown areas will see a greater rise in rents and prices than homes in rural or even suburban areas. This is certainly something to consider when making your next investment decision.

Friday, March 4, 2011

Census shows Triangle is still growing....FAST

Census numbers show Triangle is 1.6 million strong
Source: News and Observer


Despite the bursting of the bubble in 2000 and the Great Recession 10 years later, the Triangle continued to attract tens of thousands of newcomers a year. The area is now home to about 1.6 million people, according to census numbers released Wednesday.

The numbers show that the six-county Triangle region added about 400,000 residents, roughly the equivalent population of Durham and Orange counties.

The growth was led by Raleigh, which added 127,799 residents, and Cary, which grew by 40,698. Wake's smaller towns also grew at a blistering pace; five of them - Fuquay-Varina, Holly Springs, Morrisville, Rolesville and Wake Forest - have more than doubled in population since 2000.

Click here to read the full article:

Tuesday, March 1, 2011

Next WCAA Meeting - TUESDAY, 3/8/11

This month we are going to try something different that will break the "first Thursday" routine. Our next meeting is going to be on Tuesday, March 8, 2011 from 6 PM to 8 PM. I apologize to those who have a schedule conflict, but for those who can attend this will be a wonderful opportunity to see first-hand a program that is making a difference in our community. Furthermore, as a landlord, you will learn about your opportunity to meet the housing needs of StepUP participants who are being taught to be accountable, self-sufficient and paying residents.

Location: StepUP Ministry office at 1701 Oberlin Road, Raleigh - proceeding across the street to White Memorial Presbyterian Church
When: Tuesday, 3/8/11 - 6PM to 8PM
Dinner at the church will be free. Please RSVP to me ( by Friday, 3/4 so I can provide a head count for a group.

More information about StepUP and what to expect...

StepUP Ministry ( is a non-profit, faith based organization devoted to teaching, counseling and mentoring low-wage and homeless individuals to change their lives and become self-sufficient. StepUP places participants in well-organized jobs and vocational training. Upon successful completion of these steps, participants reach the Life Skills Program which is the heart of the ministry. Every Tuesday night at White Memorial Presbyterian Church more than 50 adults meet with teachers, co-partners and personal case managers who are committed to promoting personal, spiritual and financial development within each participant.

Our group will meet Steve Swayne, the Executive Director who will answer questions and provide more details about his organization. After meeting with Steve we will head across the street for dinner and to observe their weekly meeting. An integral part of this Life Skills development is for participants to budget, secure housing and begin making dependable rent payments. Thus the opportunity for landlords. StepUP is a source for responsible tenants and an opportunity to assist someone in their journey to become self-sufficient.