Local home sales fall again

Slow October signals bleak winter, but prices remain steady

Triangle home sales plummeted in October as a dwindling pool of buyers balked at sellers' still-ambitious prices.

There were 1,339 homes sold in Durham, Johnston, Orange and Wake counties during the month -- a 37 percent decline compared to the same month a year ago, data from the Triangle Multiple Listing Service show.

October is typically a busy month for real estate, a last hurrah before the winter doldrums, filled with house hunters who resume summer's unfinished business after sending the kids back to school in September.

This October, however, was the slowest in seven years. The number of sales was the fewest in any month since 2004, reflecting a month of stock market swings and economic uncertainty, while foreshadowing a brutal winter.

"The psychology of buyers is extremely fragile," said Stacey P. Anfindsen of Cary-based Birch Appraisal Group, who analyzes MLS data for area brokers. "The thing that helps is that people need shelter."

Thing is, they want it at the right price.

Values are still holding up relative to the most bubble-busted parts of the country, such as Florida and California. Median home prices for this region were essentially flat at $190,000, and average prices climbed 4 percent, compared to October 2007. That's good news for homeowners.

The bad news is that prices are expected to fall further. Analysts expect sellers to relent on prices as they face mounting competition and fewer buyers.

The supply of homes in the broader Triangle area grew to eight months, up from 5 months a year ago. The number of homes listed for sale in the four counties grew 4 percent to 13,838 -- the most in that month since 2004. Meanwhile, bargain-priced foreclosures continue to pile on.

At the same time, prospective buyers are retreating, or being pushed, to the sidelines.

Lenders are tightening requirements, making it more difficult for people to qualify for mortgages. Last month, the average fixed rate on a 30-year mortgage in North Carolina was 6.42 percent, according to Bankrate.com. That's the highest average since 2002. Rates have since dropped to about 6.1 percent.

Many would-be buyers are newcomers who need to unload homes in harder-hit regions of the country before they buy here.

Consumers 'frozen'

As Triangle unemployment continues to climb, some prospective buyers are concerned about job security and their ability to cover a mortgage.

Others are simply searching for bargains, fearful of jumping in before prices hit bottom, said Ross Rhudy, general manager of Ammons Pittman GMAC Real Estate.

"We really do have a crisis of confidence with the consumer," Rhudy said. "There are a good number of potential buyers out there -- people who could qualify, could buy -- but are absolutely scared to do it."

Pending sales, one of the strongest indicators of market momentum, fell 38 percent to a five-year low of 1,266. Home showings dropped 16 percent compared to a year ago.

The homes that did sell were on the market for an average of 87 days -- half a month more than a year ago. The number of listings that expired without a sale more than doubled from the year-ago period, to 871.

"People are frozen," Rhudy said. "It's a shame because it's such a great time to buy. There's a lot of selection and a lot of builders are slashing prices."

Sellers of existing homes are showing flexibility, too. Fifty-eight percent of homes listed in October featured reduced prices -- the most in any month in at six years.

But to close a deal these days, Anfindsen said, "they need to get a lot more flexible."