Real Deals

Real Deals: Lack of inventory plagues Triangle housing market

dbracken@newsobserver.comMarch 12, 2014 

With most measurements showing Triangle home prices rising and inventory levels already at historic lows, one might assume that there would be an uptick in owners putting their homes up for sale ahead of the upcoming spring selling season.

Not so far.

The number of people who listed their homes in February was actually 8 percent lower than during the same month last year, Triangle Multiple Listing Services data show. The region had just 6,589 homes for sale at the end of February, down 7 percent from a year ago and off 30 percent from two years ago.

Persistently low inventory levels has been one of the defining characteristics of this housing recovery, and trying to figure out why has become something of a parlor game.

“There’s not really one thing you can put your finger on about why inventory isn’t growing,” said Stacey Anfindsen, a Cary appraiser who analyzes MLS data.

The weather may have played a factor in the drop in listings in February.

“I think we can all say this is the roughest weather we’ve seen in North Carolina in quite a while,” said Kelly Cobb, a real estate agent with Fonville Morisey in Cary, who expects this selling season to start later as a result.

Home sales were also down 1 percent in February compared with the same period last year – the first such year-over-year decline in 31 months. Flat year-over-year sales increases are expected in 2014, as the market’s 24 percent sales increase last year is unsustainable when the region’s annual job growth is hovering around 2 percent.

“There can be one year where those two get disconnected,” Anfindsen said. “But I think if there’s a trend over time where they are, it’s problematic. Sales and purchases are a reflection of job growth.”

As for the inventory question, the simplest answer is that many homeowners here remain underwater – meaning they owe more on their mortgages than their homes are worth. Anfindsen said it could be that last year those sellers who could sell, did.

“This year, sellers look at the market, and they’re upside-down,” he said. “They can’t sell.”

That wouldn’t fully explain why so many people are sitting on the sidelines. The Triangle did not experience nearly the wild swings in valuations as some other areas of the country. While some people are surely trapped in their homes, many others are simply choosing not to sell.

Cobb said she met with a family Wednesday morning who expressed an attitude that has become common in the post-bubble market: “ ‘We’d like to sell. We don’t have to sell, and unless we can get a number close to our number, we’re just going to stay put.’ 

Rising home prices will eventually lead more owners to sell. The average sales price of the Triangle homes that sold in February was $241,000, up 10 percent compared with the same period last year. Most other price measurements put the region’s rate of appreciation at between 3 and 6 percent.

“We’ve gained ground in the last year and a half but there’s still more to gain,” Cobb said.

The lack of supply is making it easier for many sellers. The average days on the market of the homes that sold in February was 88, down from 117 days in February 2013.

“We’re back to you list a home on Friday, and it sells after six showings on Saturday, and you have people waiting in the wings for it,” Cobb said. “… Our demand is strong, and our supply is still weak.”

Bracken: 919-829-4548 or dbracken@newsobserver.com; Twitter: @brackendavid

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