Triangle Housing Market Report -- Issue 04-08

Al's Market Index

Buyer's Power

Seller's Power

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Al’s Market Index for Buyers remains at a 7, however the Seller's power has been lowered to a 3. Buyers clearly have the negotiating leverage in price segments above $300,000.

The global financial system issues at Quarter’s end impacted our market activity and we will see that softness in both the 3rd and 4th quarter numbers. The housing rebound we were forecasting for 2009 is now likely to occur later and be less robust.  While slowed new home building activity will help, we will likely be dealing with excess inventory in some, if not many, segments for all of 2009.

Four positive factors are in our favor: 1.) The Triangle’s downturns are less severe than the rest of the country, 2.) Both corporations and individuals remain committed to relocating here, 3.) Mortgage money is readily available at historically low interest rates, and 4.) The September national existing homes sales growth of 5.5% suggests that our existing buyers awaiting the sale of their homes in other areas of the country may finally be able to sell them over the coming quarters.

Sellers: Setting the correct list price is crucial to selling quickly at the highest price. Sellers that started too high and had to lower the list price did not do as well. Here’s the data:
- Sellers that did not lower the list price went under contract in 53 days and sold for 97.5% of the list price
-
Sellers that lowered their list prices went under contract in 108 days and sold for 91% of the original list price
- The number of expired listings has doubled in 12 months indicating that many homes are not selling at all

Buyers: Pricing due diligence is very important. Consider the implications of commuting costs, because it does affect home values. Location. Location. Location

Questions, Suggestions, and Help

Have questions or suggestions?   Click to E-mail those to us

Need a Realtor� to help you with a specific property or transaction.  E-mail Al or Call Al at (919) 349-3900

 

Total Triangle Home Sales Based  on the Triangle MLS

Triangle MLS Data

3rd Quarter 2007

3rd Quarter 2008 

Trend vs. Q3 2007

Comments

Total Sales Dollars $2.278 Billion $1.674 Billion arrow - DOWN  Down 27% We continue to see transactions running at 2003/2004 levels. The recent economic turmoil has slowed sales rates. Mortgage money is available and not a significant factor in our market softness. Prospective buyer's perception of a lack of mortgage money is a factor.
Total Number of Homes Sold 9,296 6,362 arrow - DOWN  Down 32%

 

Total Number of Active Listings in the Triangle MLS

3rd Quarter 2007 Ending

3rd Quarter 2008 Ending

Trend vs. Q3 2007

Comments

18,354 19,044 arrow UP   Up 4% Compared to 2007, the inventory is up 4%. In 2008 the number of active listings has remained relatively constant at approximately 19,000. The slowing of new home construction has enabled this leveling.

 

Triangle Total Months Inventory on Hand

3rd Quarter 2007 Ending

3rd Quarter 2008 Ending

Trend vs. Q3 2007

Comments

8.4 11.2 arrow UP  Up 33% August and September closings slowed, thus driving the months on hand higher. In general, prices segments above $400,000 have excess inventory. Under $150,000 there is not enough inventory.
6 Months of Inventory is considered a balanced market.

 

Days on Market for "Under Contract" and "Current Actives"

Segment

3rd Quarter 2007

3rd Quarter 2008

Trend vs. Q3 2007

Comments

Listings Under Contract

79 Days

92 Days

arrow UP  Up 16% Homes that went under contract did so in an average of 92 days, while those still awaiting a buyer are at 120 days and counting.
All Other Active Listings

105 Days

120 Days

arrow UP  Up 14%

 

Average Sale Price

County / Region

3rd Quarter 2007

3rd Quarter 2008

Trend vs. Q3 2007

Comments

Wake County

$271,312

$275,692

arrow UP  Up 1.6% Average prices for Wake County grew slightly. The Triangle area overall saw no change.
Total Triangle

$245,744

$245,744

arrow RIGHT Flat

 

Showings

3rd Quarter 2007 Ending

3rd Quarter 2008 Ending

Trend vs. Q3 2007

Comments

210,666

172,934

arrow - DOWN  Down 18% We believe there are a significant number of buyers sitting on the sidelines, many of them renting.  A sustained positive growth trend in the number of showings will be an early indication of a turn around.

 

Interesting Charts and Info

The 2 charts available in the links below offer an encouraging perspective on our Triangle Real Estate market. The "Competing Markets Months on Hand" chart compares the Triangle's months of inventory to the national average and select other US markets. We are in better shape than each of the others. 

The "Triangle Real Estate vs. S&P500" chart compares the annual returns of Triangle Real Estate and the S&P 500 since 1998, including an estimate for 2008. Our Triangle Real Estate returns have been steadier and stronger than the volatile equity markets. This comparison makes a compelling argument for having a significant percentage of your assets in Triangle real estate.  And now is a great time to buy.

Competing Markets MOH                                               Triangle Real Estate vs. S&P500

 

Source data from Triangle MLS, Inc., Stacy P. Anfindsen of S.M.A. Publications, Inc., and the National Association of Realtors   � Schnaidt Real Estate, Inc. 2008