The Triangle housing market, which has struggled in recent years because of a lack of willing and able buyers, appears to be on the road to recovery because of the pent-up demand those fallow years created.
Home sales in the region increased 26 percent in August compared to the same period a year ago, extending a string of double-digit gains dating to the beginning of the spring selling season. Pending sales were up 22 percent while the average days on the market for the homes that sold last month decreased 12 days to 110.
There is pent-up demand in the sense that folks over the past few years have not really pulled the trigger on things, said Frank DeRonja, owner of Frank DeRonja Real Estate in Raleigh.
Everybody still wants their pound of flesh in these negotiations but theres confidence to put pen to paper, he added. That had been missing for a while.
The uptick in demand comes as the inventory of homes on the market continues to fall. There were 9,023 homes listed for sale in Durham, Johnston, Orange and Wake counties at the end of August, down 22 percent from the same period a year ago, Triangle Multiple Listing Services data show.
At the current pace of sales, the Triangle has a five-month supply of homes on the market, down from seven months a year ago.
The reduction in inventory has been most profound in areas of the Triangle that traditionally have been the most desirable, such as Cary, North Raleigh and inside the Beltline. Many buyers were priced out of those areas during the boom years and sought cheaper real estate on the Triangles edges but have since returned as values slumped.
We had this kind of rapid reverse migration, said Stacey Anfindsen, a Cary appraiser who analyzes MLS data for area real estate agents.
Marti Hampton, owner of Re/Max One Realty in Raleigh, notes that there is pent-up demand among sellers as well as buyers.
Theres a lot of people who didnt sell the last five years because they couldnt get what they needed to out of their house, she said.
Hampton cautioned that the impressive year-over-year monthly gains shouldnt be interpreted as a sign that the market has turned a corner.
It really is better in certain areas of town, she said. But real estate is not one size fits all. You cant say its better for every single home for sale because in some areas and some price ranges its pretty darn dismal.
She said homes priced under $400,000 in historically strong neighborhoods are among the most in demand. The sectors that continue to struggle are some higher-end homes and those properties located farther from job centers.
The lack of homes for sale in many popular neighborhoods is creating scenarios that would have been unheard of a few years ago. DeRonja said he knows of cases where more than one prospective buyer was interested in buying a home at a certain price, and then the property didnt appraise for that amount.
The comparables from three to six months back create an appraisal issue, he said. That shows me that prices are trying to push back up.
Hampton said while houses in great neighborhoods have probably been drawing multiple offers for several months, it will take more than that for overall prices to rise.
Sales have to go up for a sustained amount of time before pricing is going to go up, she said. And frankly there has to be some stabilization in the economy and in employment before people are going to feel confident.