The Triangle housing market had its best February in four years as sales increased 35 percent compared to the same period a year ago.
While some increase was expected given the dismal market conditions early last year, the size of the jump offered renewed hope that a key component of the regions economy is on the mend.
We know theres a lot of pent up demand, said Phyllis Brookshire, a senior vice president with Allen Tate Real Estate. Theres a lot of inventory thats come off the market so the supply and demand gap has gotten smaller. When that happens market factors just take over.
The number of homes on the market has been falling for months, and was 26 percent lower in February than it was during the same period a year ago. The Triangles housing inventory increased just 3 percent from January to February a time in which traditionally many people put their homes up for sale.
Buyers are also being lured back by declining prices. The average price of the homes that sold in February was $216,600, down 3 percent from a year ago.
Sometimes its just a little bit that makes a difference, Brookshire said.
A better measure of the strength of the housing recovery will come later this year when the sales numbers are benchmarked against numbers that werent as heavily influenced by the federal tax credits, said Stacey Anfindsen, a Cary appraiser who analyzes Triangle Multiple Listing Services data for area real-estate agents.
The credits expired at the end of June 2010, but sales were depressed for an extended period afterward.
The percentage numbers look good because February (2011) was so bad but when we get to July well start to see 1 to 2 percent comparisons, Anfindsen predicted.
The next few months are traditionally the strongest ones for home sales. February data on pending sales, which were up 30 percent, and showings, which increased 9 percent, offered further evidence of growing momentum in the marketplace.
Still, the housing market has been presumed to be on the road to recovery multiple times in recent years. Previous recoveries have failed to gain traction even though declining prices and historically low interest rates have made owning a home much more affordable.
Its hard to know
Jane Smith, 30, has been sporadically house hunting in Raleigh for the past few years but only recently got more serious about her search. She believes shes been renting longer than she should, but gauging where the market is headed has been difficult.
Its hard to know, she said. Ive been keeping my eyes open in the real estate market for a couple years now and things havent changed much.
Smith, a financial adviser with Oxford Investment Group, has seen firsthand how recent gains in the stock market and positive economic news has made many people, including her, more willing to consider purchasing a home.
Smith has yet to make offers on any houses, but shes under no pressure to buy. Shed like to take advantage of interest rates before they rise.
I think some are a little overpriced right now, Smith said of the homes shes looked at. Well see, I think theres still some room. Because its a buyers market theres some negotiating room.
The health of the housing market is intrinsically connected to the job market, which only recently has begun to post the kind of gains necessary to make a dent in the unemployment rate. Brookshire said its likely the cumulative effect of a gradual drumbeat of better economic news is drawing buyers off the sidelines.
I think consumer confidence is improving and I think everybody feels like the economy is improving, she said. It was a lot of little things from different places that kind of added up.