Sitting unsold

Builder Dan Tingen found out firsthand about the national housing slowdown when it took three tries this summer to sell a house in Wake Forest.

The first miss came in July, when a couple moving to the area from Atlanta contracted to buy the $410,000 house, only to back out when their home in Georgia did not sell. Next, a couple moving from Northern Virginia put the house under contract. Same problem. "It was two bad experiences with three buyers to close one house," said Tingen, who finally found a buyer in late September.

Tingen, the president of the Home Builders Association of Raleigh-Wake County, said that in his 26 years in business, he has had only a handful of customers back out. Other builders and brokers have had the same experience.

Talk to anyone in the local housing industry and you'll hear how job growth and moderate interest rates have kept the Triangle housing market humming at a record pace since 2003. Last year, sales of new and existing homes totaled a whopping $9.3 billion.

But in recent months, builders and brokers have found that the region's reliance on transplants for home sales means that the area is not shielded from the nationwide housing slump.

"Raleigh-Durham is one of those [regions] that draws many new residents from other states for jobs and baby boomers who are retiring," said Lawrence Yun, an economist for the National Association of Realtors in Washington. In 2005, there was a net population gain of 25,600 in Raleigh and Cary and a gain of 2,600 in Durham, he said.

"They are coming from places where they are having housing market problems," Yun said.

In Northern Virginia, California and Florida, speculators drove prices sky-high and are now trying to dump their properties. That's causing a housing glut that's keeping homes on the market, Yun said.

In Florida and Northern Virginia, second-quarter sales were down more than 20 percent from a year ago and now are slowing even more. The National Association of Realtors expects third-quarter sales in both areas to fall 40 percent compared with last year, and it might be next spring before prices drop enough for sales to pick back up.

Locally, sales to people moving to the area are estimated to account for between 20 percent and 50 percent of home sales, according to builders and realty companies.

Many of those people are still able to sell their homes. Often, companies that are transferring workers to the area buy homes the owners can't sell. Still, much is at stake when people can't sell their homes elsewhere.

About 46,000 people work in the housing market -- building, selling and supplying materials -- in Wake County alone, according to the home builders association.

So far, nobody is laying off employees or slowing building, but that's a possibility. Potential effects extend beyond the housing industry.

Michael Helmar, an economist for Moody's Economy.com, predicts that retail spending will go down because people paying rent and mortgage or dual mortgages won't have as much disposable income. He expects some layoffs and slower construction but doubted that they would be widespread, although sales nationally are predicted to decline through 2007 and not pick back up until 2009.

"Raleigh-Durham isn't like much of the rest of the country," Helmar said, referring to job growth and moderate house prices. "It's just slowing from the really hot pace it was on for the last few years."

The slowdown is affecting all aspects of the market.

* McCar Homes, which averaged about 29 home sales per month in the Triangle most of this year, dropped nearly 50 percent in the past two months. Relocations are about 30 percent of sales, said Jennifer Greene, marketing manager for the Atlanta-based company.