Triangle home sales increased 26 percent in the third quarter compared with the same period a year ago, as the market continued to be driven by the same dynamics that have been in place for the past year.
The double-digit jump in sales corresponded with the slide in the number of homes on the market. There were 7,972 homes for sale in Durham, Johnston, Orange and Wake counties at the end of September, down 10 percent from the same period a year ago, Triangle Multiple Listing Services data show. The region now has a three-month supply of homes on the market at the current pace of sales.
“We continue to be, obviously, very pleased with the numbers,” said John Wood, a Re/Max United agent in Cary. “I think we’re seeing a little bit less multiple offers, but we’re still seeing homes that are priced right and in the right condition are selling pretty quickly.”
Home sales in September were up 15 percent compared with the same month last year. Showings were up 10 percent, and pending sales increased 20 percent in the month.
Stacey Anfindsen, a Cary appraiser who analyzes MLS data for area real estate agents, said he doesn’t see the Triangle’s inventory levels changing very much over the next six months. He said homebuilders are doing as much new construction as possible given the manpower available to them.
And many homeowners who bought in recent years continue to be underwater, meaning they owe more than their homes are worth.
“You still have a lot of people who are underwater from 2008, 2009 and 2010 – they can’t put their house on the market,” he said. “I don’t see any of that changing. We haven’t had home price increase of 20 to 30 percent to get more of those people back in.”
The average price of the homes that sold during the quarter was $249,000, up 4 percent from the same period last year.
There are concerns that the government shutdown that has now lasted more than a week could slow or derail the housing recovery if it drags on long enough. Government agencies such as the Federal Housing Administration and Fannie Mae back most of the mortgages issued today, and lenders need access to IRS documents to determine whether buyers are qualified.
“I think we’re a little nervous about whether the government shutdown will have any lasting effects on ... the market,” Wood said. He said so far lenders have been able to find work-arounds for most of their mortgage products, “so it’s not really affecting closings yet.”
The other wild card is interest rates, which could spike if the country defaults on its debt. Wood said that independent of the showdown in Washington, he expects interest rates to rise next year and that his office already has seen more buyers looking to make a purchase before they do.
While higher interest rates would reduce the affordability of homeownership, Wood notes that rock-bottom rates have a downside too.
“Let’s face it: If rates continue to stay low, our economy is not recovering,” he said. “It’s a Catch 22.”