Triangle home sales rose 10 percent in July, as the market continued to show strong activity despite extremely low inventory levels.
There were 2,924 homes sold in Durham, Johnston, Orange and Wake counties last month, Triangle Multiple Listing Services data show. Pending sales were up 13 percent.
Through the first seven months of the year, home sales are up 11 percent in the Triangle compared with the same period last year. The 10 percent sales increase in July followed a 22 percent year-over-year jump in June.
One of the factors helping drive the recent double-digit increases is low interest rates – and the threat that they could soon rise – said Ed Willer, an agent with Berkshire Hathaway HomeServices York Simpson Underwood Realty.
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“They’re talking about [raising rates] a lot, and that has historically always been a good market,” Willer said. The Federal Reserve is expected to raise the short-term interest rate it controls later this year.
Falling inventory levels have also increased the urgency among some buyers.
The number of homes for sale fell 14 percent in July compared with the same period a year ago. New home listings were down 1 percent while existing home listings dropped 18 percent. There are now just 6,892 homes for sale in the four-county region, a 43 percent decline from four years ago.
The lack of inventory means many real estate agents are having trouble finding potential properties for some of their buyers.
“It’s not like we’re even losing out, I just don’t have anything to show them,” said Van Fletcher, a real estate agent with Allen Tate in Raleigh. “It’s forcing me to really think outside the box, or to get them to reevaluate their timing or their criteria.”
Fletcher said it is particularly hard to find homes with three bedrooms and two bathrooms inside the Beltline and in North Raleigh.
Homes that are in good condition, well located and properly priced continue to sell quickly. The average days on the market for the homes that sold in July was 43 days, down from 64 days. Sixty-three percent of the homes that sold in July did so within 30 days.
Despite intense competition for some listings, the majority of buyers are still obtaining financial concessions from sellers. Financial concessions were paid on 68 percent of the transactions in July, which is up from the 65 percent that were paid on closings during the second quarter.
Fletcher said concessions aren’t going away because the financial picture for many buyers hasn’t changed dramatically during the current economic recovery.
“I definitely think it’s easier to get financing but it doesn’t mean that people have more money to put down or more disposable income to use,” he said. “They still do want concessions.”
Limited supply is helping to nudge prices higher. The average sales price of the homes that sold in July was $274,400, up 5 percent from the same period a year ago. Fletcher said buyers appear particularly willing to pay higher prices for new homes.
But there continue to be sellers who are unable to sell because they are underwater – meaning they owe more on their mortgage than their home is worth – or they are simply unsatisfied with what buyers are currently willing to pay. The number of expired listings increased 27 percent in July, and the number of listings withdrawn rose 12 percent.
“Certainly a seller’s market means higher prices but they sometimes think a seller’s market means ‘I can get what I want.’ I don’t think that’s case always.” Fletcher said. “ ... Until peoples’ incomes really go up substantially I don’t think you’re going to see a marked rise in prices.”