Over the past year the Triangle housing market has been characterized by two trends that, when occurring simultaneously, would seem to be a recipe for a recovery.
While the number of homes listed for sale in the region has plummeted, the number of sales occurring has been steadily rising. That trend continued in April, as home sales increased 9 percent compared to the same period a year ago, while the total number of homes on the market was down 25 percent, Triangle Multiple Listing Services data show.
Pending sales increased 18 percent, and showings were up 9 percent.
For sellers who have been at the mercy of bargain-hunting buyers in recent years, this is undoubtedly good news.
“What we’re seeing now is a lot of houses with multiple offers on them and coming under contract in the first month on the market,” said Stacey Anfindsen, a Cary appraiser who analyzes MLS data for area real estate agents.
The improving market conditions have also exposed a new dynamic in the Triangle market that can be best described as a tale of two listings.
“You’ve got homes that are listed for sale, and you’ve got homes that are selling,” said Jason Graves, a broker and listing partner with Linda Craft & Team Realtors in Raleigh. “And the good inventory that’s priced where it needs to be that’s offering what the public wants is flying off the shelves because everything is so picked over.”
Homes that are in need of work, or that don’t feature some of the amenities buyers have come to expect, are much more likely to languish on the market.
“The market is still demanding move-in ready housing, and I’m not sure that’s going to go away anytime soon,” Anfindsen said.
Prices still a concern
Gauging the strength of the housing recovery has been difficult this spring because the monthly numbers are being compared to a period early last year when sales were particularly dismal. Most real estate experts predicted that the monthly year-over-year gains would shrink over time, something that has been happening.
What hasn’t happened is price stabilization. While the average sales price of the homes that sold in April increased 2 percent to $236,000 compared to April 2011, that represents just a snapshot of the homes that sold during the month and can be skewed by a handful of sales.
Graves said the various home pricing indexes he tracks tell a different story.
“The indexes show us that they’re still falling,” he said.
Graves said his office is doing between three and four times more business than it did last year at this time. But he said there remain a lot of “lookie loos,” people who are waiting for a sign that the market is on the upswing again before they get serious about buying.
One positive indicator from the April data is that, overall, homes do appear to be selling quicker. The average days on the market of the homes that sold in April was 120 days, down from 127 days during the same period last year. That breaks a string of four consecutive months where the average days on the market had increased.
The big wild card in the housing market’s ongoing recovery remains inventory levels. Keeping supply low is crucial because the current economic recovery has been characterized by anemic job and wage growth, making it unlikely that housing demand is going to pick up considerably anytime soon.
The Triangle has yet to see a significant uptick in inventory this spring, despite concerns that the recent mortgage settlement would lead to a wave of foreclosures coming on the market. The number of homes on the market increased 2 percent from March to April and is up 10 percent from the end of last year – a typical increase that occurs every year in advance of the spring selling season.
But many are still bracing for the banks to finally rid themselves of all the properties they’ve taken back in recent years.
“The problem we have now is this shadow inventory,” Graves said.