To Market! To Market! By Phyllis Brookshire
“How is the market doing?” If I had a dime for every time someone asked me that … Over the past 24 months that seems to be the question on everyone’s mind. I am happy to report that the market is recovering.
The health of any real estate market is based on the principle of supply and demand. Supply and demand is generally impacted by three factors: the availability of jobs in the market, consumer confidence, and the cost of home-ownership. Moving one step above that is that fact that all real estate markets impact one another, especially in an area like the Carolina’s where many people relocate from other parts of the country. If you can’t sell your house where you currently live, then you most likely can’t purchase in your new location. Or if you have to sell for less where you currently live, then you might have to purchase differently in your new location.
If you are a seller it is still all about price and condition. Pricing has to be compelling because buyers still have a lot of choices. For sellers that are pricing correctly from the start, the average days on the market (the time it takes to get the house under contract) is 1/3 of the time when compared to houses that aren’t priced right. And houses that are priced right sell for 97% of list price. Houses that aren’t priced right from the start sell for 88% of list price. So there is a big penalty for incorrectly pricing listings.
So, with that being said, what does the market look like in the Triangle region of North Carolina? First, the job market showed its first modest growth in a couple of years. Inventory increased slightly and average list prices decreased on average 10%. Activity levels have increased across the board. Closings have increased with average sales prices down around 10%. Wake County average price is $248,000, Durham County average price is $181,000 and Orange County average price is $304,000. Foreclosures and distressed sales make up less than 10% of the listing inventory.
There is currently a 12 month supply of inventory across the Triangle. A balanced market, where supply and demand are at equal levels, is a 6 month supply. So the Triangle still has more supply than it does demand. But again, demand has increased over 2009.
Affordability remains a big positive with lower average prices and interest rates that are still at all time lows (as of today under 5%). And consumer confidence is improving as other markets around the country are starting to recover and people are getting their houses sold.
The market is recovering.
Our thanks to Phyllis Brookshire, Senior Vice President for the Allen Tate Company, for writing this article and providing such insite into the market. We are all very encouraged. As always, we’re your Trusted Advisors for Raleigh real estate, Rick Freeman and Amy Davis, the Freeman/Davis Home Team. Search For Homes in the Triangle on our Raleigh MLS VOW (Virtual Office Website), the most advanced home search tool online.