Triangle home sales rose more than 8 percent in February compared with the same period a year ago, but the market continued to suffer from a lack of homes for sale.
There were just 6,138 homes on the market in Durham, Johnston, Orange and Wake counties at the end of February, down 13 percent from the same period a year ago, Triangle Multiple Listing Services data show. The number of existing homes for sale fell 17 percent while the number of new homes decreased 1 percent.
“We need inventory desperately,” said Mark Parker, vice president of sales for Fonville Morisey’s Stonehenge office in North Raleigh. “There’s just not enough homes out there, and it’s over fairly broad price points. The upper price points maybe not as much, but anything under $400,000-$450,000 there’s a tremendous shortfall.”
February marked the seventh consecutive month that inventory levels fell on a year-over-year basis. In just four years, the number of homes for sale in the region has been cut in half.
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The dearth of homes for sale just ahead of the busy spring selling season will likely only increase the intense competition for homes that are in good condition and located in the Triangle’s more desirable neighborhoods.
Parker said his agents are seeing four or more offers on some listings within hours of being placed on the market. In one recent case a buyer offered $280,000 for a house priced at $250,000. The buyer, who had lost out on several other properties that drew multiple bids, made an extremely aggressive offer hoping to secure the property knowing that the house was unlikely to appraise for that value.
“It’s a little bit of a strategy, a risky strategy if you ask me,” Parker said.
Real estate professionals point to a number of reasons that may explain the lack of homes for sale. While prices have been steadily rising in the Triangle, they have not recovered sufficiently for many owners who bought when the market was at or near its peak.
“It’s amazing how many houses I look at that people bought in 2004 and 2005 and they sold it for what they had into it,” said Stacey Anfindsen, a Cary appraiser who analyzes MLS data for area real estate agents. “I think it’s just one of those things it’s going to take a long time to get better unless we have a crazy run-up in prices. ... I don’t see it changing anytime soon.”
Parker said the housing bubble burst changed the mentality of many homeowners. Before 2008, many would have gladly used their savings to purchase more house than they needed. Now those same owners are more inclined to be content with what they have. “So we many not see as many people putting their houses on the market because they’re satisfied with what they’ve got,” he said.
Younger generations also view the housing market with more skepticism after witnessing the market crash, and may be inclined to rent for a longer period than previous generations.
“They’re looking for functionality, convenience,” Parker said. “They’ll be satisfied with a smaller home if they can have a quality of life that allows them to enjoy life as opposed to being a slave to the mortgage, if you will.”
Anfindsen said historically people owned their homes in the Triangle for four to six years before selling. Now there is a growing number of people who have decided, or been forced, to stay put for much longer. The current market dynamic, he said, has remained in place for much longer than anyone imagined.
“It’s driving the agents crazy because on one hand they have got some houses they can’t sell, and on the other hand, they put a house on the market and they get like three or four offers on the first day, and they wind up selling for above the list price,” he said. “Then they’re screaming at the appraisers for not coming in and meeting that. All the practitioners are challenged in this market.”