BY DAVID BRACKEN – Staff Writer
The Triangle, no stranger to being ranked at or near the top of various
“Best of” lists, has a new accolade: healthiest housing market.
Builder Magazine has named the Raleigh-Cary area the healthiest of the
100 largest U.S. housing markets. Durham-Chapel Hill ranked third,
behind No. 2 Austin, Texas.
While any positive housing news is welcome these days, the rankings are
likely to elicit skepticism from those struggling to sell their homes.
The Triangle has a 10-month supply of houses on the market measured by
the pace of sales during the final three months of last year.
The rankings are based on a range of factors, including home price
appreciation or depreciation, job growth, household and income growth,
unemployment rates and building permit activity.
Raleigh-Cary got the top spot even though the magazine said home prices
are expected to fall 10 percent this year “due to a spreading
foreclosure problem.”
The rankings reflect both the Triangle’s resilience during the downturn
and its outlook for growth, said Tim Minton, executive vice president of
the Home Builders Association of Raleigh-Wake County.
“Clearly our market has been able to weather the storm better than
most,” he said. “Part of it is our prices never accelerated like other
markets did so we’ve not had to recover from that part of it.”
The question now is whether the Triangle’s relative health compared to
other markets will translate into a quicker recovery.
From a builder standpoint, the healthiest markets are ones where the
issuing of new building permits is on the rise.
After falling dramatically in 2009, the Triangle saw permit activity
recover somewhat last year.
New single-family building permits increased 16 percent in Raleigh-Cary
and 14 percent in Durham-Chapel Hill markets, according to Market
Opportunity Research Enterprises, a Rocky Mount company that analyzes
residential real estate trends.
But much of that activity occurred in the first quarter as builders
moved to meet demand created by the federal homebuyer tax credits, which
expired last summer.
“The fourth quarter numbers were dismal in terms of permitting,” said
Bernard Helm, president of Market Opportunity Research. “The third
quarter was bad.”
Helm said demand for new homes is likely to remain flat until the market
deals with the excess of existing homes now on the market, including
foreclosures and other distressed properties.
“Until all this is settled out in the resale market, the new homes
market is not going to grow any substantial amount,” he said. “We’re
just going to bounce along at about this level.”
Homebuilders today are being extremely selective about where they build,
focusing on areas near job centers where there’s more proven demand.
Suddenly affordable Cary
The decline in lot prices means builders are now able to offer more
affordable homes in places such as southwestern Wake County, which
includes Morrisville, Cary and Apex.
“Before, if you wanted to buy a house that was under $250,000, you
weren’t going to look at Cary as an option,” Minton said. “Now Cary is
an option.”
Pulte Homes, for example, is building at two of its Cary developments:
Carolina Preserve, its community for people 55 and older, and the
Estates at Davis Village.
“There are signs that people are coming out to buy,” said Lawrence Lane,
Pulte’s division president for the Triangle. “If you’re in the right
location, with the right product and it’s priced appropriately there are
buyers out there.”
While the Carolina Preserve has homes over $300,000, Lane said the best
market was for homes in the $175,000 to $250,000 range.
If there’s one thing that’s likely to put a drag on any housing
recovery, it’s the labor market. The Triangle’s unemployment rate
remains above 8 percent, and many fear all the accolades it is receiving
will only make things worse.
“The great thing is we made the Top 10 list,” Minton said. “The bad
thing is every body else sees it and comes here looking for jobs.”
Best Regards,
Corey Bauer
Retail Sales Manager
Wells Fargo Home Mortgage
M5609-011
7721 Six Forks Road, Suite 116
Raleigh, NC 27615
(Office: 919-841-5305
4 Fax: 866-709-6842
Avg. Sales Price: $260,000
Avg. Days on Market: 98
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