Triangle home sales surged 41 percent in April as buyers continued to snatch up properties from an ever-shrinking inventory of homes on the market.
Increasing demand and dwindling supply is creating plenty of frustrated buyers, as the most sought-after homes sell quickly – typically after receiving multiple offers.
“The inventory being so low is really making it tougher,” said Mark Parker, vice president of sales for Fonville Morisey’s Stonehenge office in North Raleigh. “I think sales would probably be even higher if we had more inventory out there.”
There were just 7,667 new and existing homes listed for sale at the end of April, down 23 percent from a year ago and down 42 percent from two years ago, Triangle Multiple Listing Services data show. The Triangle now has a 3-month supply of homes on the market at the current pace of sales.
The historically low inventory levels are directly tied to home prices, which haven’t yet risen enough in the Triangle to entice a large number of owners to sell.
“I think that’s what is holding people back more than anything,” Parker said.
Many owners who bought during the peak of the boom may still be underwater, meaning their house is worth less than the amount they owe on their mortgage. Others just haven’t experienced enough appreciation to warrant moving up to a larger and more expensive house.
Demand spurs prices
Still, the intense competition for the homes that are selling is helping to boost prices.
Home prices, including distressed sales, increased 3.5 percent in the Raleigh-Cary market in March compared with the same period a year ago, according to CoreLogic. Prices in the Durham-Chapel Hill market increased 4.5 percent over that same period.
And 70 percent of the homes that sold in April were at or above their list price, up from 58 percent in January, according to MLS.
Stacey Anfindsen, a Cary appraiser who analyzes MLS data for area real estate agents, said he expects the current market dynamic to remain in place at least through the third quarter.
“I don’t see inventory doing anything, just kind of flat-lining,” he said.
‘It’s like Pac-Man’
Demand, particularly in Cary and other areas of western Wake County, is likely to rise later this year when the insurance giant MetLife begins moving employees into the area. MetLife announced earlier this year that it would add about 1,300 jobs in Cary, which will be a hub for the insurer’s global technology and operations unit. Some of those positions are expected to be filled by MetLife employees relocating from elsewhere in the country.
“That could be really chaotic in terms of what’s available for inventory,” Anfindsen said.
The low inventory levels have already greatly reduced the time it now takes to sell a home in the Triangle. The average days on the market of the homes that sold in April was 89 days, down 31 days from the same period last year.
“It’s like Pac-Man,” Anfindsen said. “They’re out there just eating up inventory as fast as it can come on (the market).”