Interview: Jim Allen, President Broker, The Jim Allen Group

Prolific market

A dire lack of inventory is driving prices higher as demand continues to surge

Jim Allen

President & Broker – The Jim Allen Group

How would you characterize the Triangle’s real estate market? There is almost no inventory in the market at all. I never believed that I would see a market this prolific in my time and I’ve been a top agent in Raleigh since 1993. In 2020, we closed $462 million and in 1Q21 alone we closed nearly $710 million. We went from a prepandemic market that had about 93 days on the market for the average listing to three days. In all of the Triangle — encompassing seven other major counties around us, sprinkling a bit down into Fayetteville and a bit at the coast — there are only 2,100 total active listings.

To be a healthy market, there needs to be somewhere between 12,000 and 14,000 active listings. In Wake County, which is the best county in the Triangle in terms of annual sales, there are only 1,040 total active listings, while it would require about 11,000 to be healthy, considering we sell on average 54,000 homes a year through MLS (Multiple Listing Service).

What can the average buyer do to make their offer stand out in such a competitive landscape? It’s tough. There’s a wide variety of things you can do from escalation clauses to compelling letters. If you grew up in a family home, you want that next person to enjoy it the same way you do. Sometimes that helps a bit but the biggest part when presenting an offer is due diligence money, which is nonrefundable from day one as a means to set yourself apart. We’re advising our clients to put down between 5 and 20%. If that’s the house for you to move forward with, show your interest the best way you can. It’s not always the highest offer that’s going to win. The truth is most homes are selling right now for more than they’re going to appraise for anyway.

What is Jim Allen Group’s outlook for the near term? We’re on pace to pass $1 billion in sales for 2021. Our 2020 numbers were a historic high for anybody in the state of North Carolina and in 2019, we did $400 million, the top sales in the state. We’re averaging $4 million in sales a day at present. If we stay on that pace, if the market continues that way, our $1 billion landmark will be easily attainable. The problem is getting those deals closed because we’re selling so many homes. Before I can tear the house down, we have already sold it to the end user and we just have to wait to collect the commission. We do not know if closings will get there because it’s taking between nine and 11 months to build a home of substance.

We wager that this market is going to continue. In 2020, we were right at 11.2% appreciation for the year. Housing wise, we will supersede that in 2021 in pockets. The shortage is going to continue.