As the Triangle’s housing market has shown signs of improvement in recent months, it has once again raised a question that is crucial to this region’s economic recovery.

When is demand for housing going to increase enough to translate into a substantial boost in new home construction?

The Triangle had 4,051 new homes either under construction or completed but vacant in the first quarter of this year, according to Metrostudy, a research firm that tracks Triangle housing trends. That was the second-lowest level of inventory Metrostudy has recorded in its 13 years of surveying the region.

The lowest was recorded the prior quarter.

The number of finished but vacant new homes on the market is now at an all-time low of 1,797, which is 60 percent less than what was for sale at the market peak four years ago.

“Most everyone is being pretty judicious or prudent with their starts so that you don’t see large (speculative) inventories anymore, anywhere,” said Craig Briner, president of GreenHawk, a local development firm that builds new homes under the Live Oak Homes brand. “People just can’t afford that risk. We all got scared, man. We all hunkered down for a while.”

The steep fall-off in new construction was necessary for the market to heal. But it has dragged on much longer than anyone expected, and that has created a dynamic that is allowing builders with competitively priced product in good locations to thrive.

“The pipeline got so low that any uptick in demand kind of flows right through – so a house has to start,” Briner said.

In West Raleigh, Lennar has sold more than 100 homes at Inside Wade, its new 307-lot community, since May, said Trish Hanchette, the builder’s Raleigh division president.

“We’re thrilled with the pace. I would tell you we’re probably surprised by the pace because it’s just been so quick,” she said. “Now I’ve got to scramble to find more land.”

Indeed, given the lack of residential land development in recent years, builders have largely picked clean the existing inventory of lots. All of the so-called “A” location lots have been spoken for, and most of the “B” lots have either been built on or in the hands of companies that plan to begin construction soon.

While there remains a fair amount of lots in tertiary markets far from the Triangle’s job centers, demand remains too weak to justify building in such locations.

That some homebuilders are now doing well in good locations is in part a reflection of how the housing bust has played out in the Triangle. The region has had fewer foreclosures than many other markets, and many of those distressed properties are far from where builders are now putting up new homes.

Still, new homes have always competed somewhat with existing inventory in the Triangle, and that has become even more the case in the current environment. As existing home prices have fallen, it has compressed homebuilders’ margins and forced them to offer features that buyers can’t find elsewhere.

Those margins are likely to get even slimmer as the cost of acquiring new land rises, unless builders are able to charge buyers more of a premium for what they’re offering. And the scarcity of lots in good locations is likely to further shift the balance of power to the large national builders, which are in a much better position to finance the development of new sites.

Given the decline in both new and existing home inventory and the recent uptick in demand, the Triangle market would seem to be poised for a rebound in new construction. The number of existing homes on the market in Durham, Johnston, Orange and Wake counties in February was 7,720, down 26 percent from a year ago, according to Triangle Multiple Listing Services.

But given the depths of the recent downturn and the misery it has inflicted on so many homebuilders, few are willing to call it a comeback yet.

“I don’t think any of us want to talk about it because we’re superstitious,” Briner said. “We don’t want to put a hex on it or a jinx.”

Bracken: 919-829-4548