The year in residential real estate began with the Triangle hitting a 10-year low in sales and ended with real estate professionals expressing cautious optimism that the bottom of the market has been established.
Thanks in part to a government tax credit for first-time buyers, sales have rebounded somewhat, and real estate agents are no longer going weeks without fielding a phone call. Home sales through the first 11 months of 2009 were down only 12 percent from the previous year largely because of improving conditions in the third and fourth quarters.
Although many real estate professionals are hoping 2010 will bring continued improvement, the last 18 months have taught them to expect the unexpected.
"There's no way to really know," said Ed Dunnavant, who tracks Triangle housing trends for Metrostudy, a research company. "There's a lack of trends out there. I think that would be the real statement."
Fair enough. Instead of highlighting trends to watch, here's an attempt to answer the most pressing questions facing the Triangle housing market as we head into 2010:
Will homeowners regain some of the equity they lostover the last year and a half?
Ross Rhudy, general manager of Ammons Pittman GMAC Real Estate in Raleigh, said he expects values to remain largely flat over the next year.
"I don't think we're going to be looking to see prices to appreciate," Rhudy said. "If anything they may ease just a little, but we're talking just 1 to 2 percent overall."
This may seem like bad news, but consider that the Triangle has fared better than many other housing markets. Prices here never reached astronomical heights, which meant they didn't have as far to fall when the bottom fell out of the housing market.
This market has also been spared the worst of the foreclosures crisis. Through the first 11 months of the year, the number of foreclosure filings in Durham, Johnston, Orange and Wake counties totaled 7,787, up 5.8 percent from the previous year, according to the N.C. Administrative Office of the Courts.
Stability, Rhudy notes, is an important step on the road to recovery.
Will the market for luxury homes begin to improve in 2010?
The softest part of the Triangle housing market continues to be homes priced at more than $400,000. There are many more houses than buyers, and many sellers have been reluctant to discount their homes to where they might sell.
Through the first nine months of 2009, sales of new homes priced at more than $500,000 were off 52 percent from the same period last year, according to Market Opportunity Research Enterprises, a Rocky Mount group that tracks Triangle housing trends.
Stacey Anfindsen, a Cary appraiser who analyzes MLS data for Triangle real estate agents, said it's hard to create buyers at the higher ends given the high level of employment and the overall erosion in wealth that has occurred in recent years.
Rhudy expects to see modest gains in the number of higher-priced homes being sold in 2010, but he said it will take time - "well beyond 2010" - and an improving economic picture to move that inventory.
Will federal tax credits continue to buoy the market?
The first-time tax credit allows buyers to reduce their federal income taxes by 10 percent of the price of a home, up to a maximum of $8,000. The credit was instrumental in helping to stabilize Triangle home sales in the second half of this year.
The credit has now been extended and expanded to include a tax credit of up to $6,500 for repeat buyers who have lived in their houses at least five years.
The new deadline for both tax credits is April 30 to put a home under contract and June 30 to close.
Closings, pending sales and showings all picked up as the original Dec. 1 deadline approached for the tax credit. If similar momentum builds as we approach the new deadline, it will boost sales through the first half of the year.
Still, many real estate professionals worry about what will happen to the market when the tax credits go away.
Anfindsen said he tends to think that the tax programs are not, essentially, dipping into future purchases.
"Buying a house isn't like buying a car," he notes.
But he said it's also true that the longer they are in place, the more the market becomes used to them - much as consumers got used to the zero percent financing offered by the auto industry.
"Which is a little bit dangerous," Anfindsen said.
