21 Dec So, how is the real estate market?
By: Courtney James
It’s that time of year when you feel as though you are bouncing from one holiday event to another. Almost without fail, at each event, I am confronted with the question, “So, how is the real estate market?” Fortunately, I enjoy talking about real estate so I never tire of the question. I am well aware that real estate is something that translates well – almost everyone has some experience in buying and selling homes. I feel fortunate that I happen to work in a field that is of interest to many. Not everyone receives the same level of curiosity. My husband, for example, is hardly ever asked, “What’s new with cerebral hemorrhage mouse models?”
In any case, this year, people have seemed a bit surprised when I answer that the market is great. Truthfully, I think we are very fortunate to be living in Durham because we have been relatively protected from the housing slump. Sure we are not quite at the level we were in 2007, but we have not slid as far back as some of our neighboring communities. In Durham, we are at 65% of 2007 sales, while Raleigh is at 59% and Cary is at 42%.
From my personal experience, there are several things that I have noticed are different in this market. These are largely intuitive observations and are probably of no great surprise.
First, new construction homes are not nearly as “in-demand” as they were a few years ago. I remember accompanying several clients to new-home neighborhoods pre-2008. If the buyer was interested in a home, they typically paid exactly what the builder asked. Now it seems that builders all over the Triangle (and across the country) are offering very attractive incentives worth thousands of dollars to lure buyers.
Second, fewer people seem interested in “fixer-uppers”. This is probably due to two factors: increased challenges in obtaining construction financing and the sharp decline in people attempting to “flip” houses (not just because of financing challenges but also because of a decrease in market appreciation). If the house needs updating, chances are it will sit on the market longer than in years past.
Third, there are fewer luxury homes selling and those that are selling have done so after a longer stretch on the market. In 2007 there were 114 homes over $500k that sold in Durham as opposed to 76 in 2009 (as of December 20th). The average days on the market for this price range was 212 days in 2007 and 226 days in 2009.
In reviewing the statistics for some of Durham’s more common zip codes (27701, 27705, 27707, and 27713), one surprising statistic is that although there were fewer homes sold in 2009 than in 2007 (1717 in 2009 and 2557 in 2007), there were more showings. In 2009, there were 24 showings for each home sold, compared to 11 showings for each home sold in 2007. This may reflect the possibility that buyers feel they need to do their due diligence by seeing more homes before they decide on one.
So I stand by my answer to the predictable question, I think the real estate market here is great. Against the advice of many, it turns out to have been a really good year to open up a real estate company. I feel positive about the outlook for 2010 and am thrilled that the tax credit was extended and expanded (see past blog post for more details). So Happy Holidays from all of us here at Urban Durham, and here’s to an excellent New Year in 2010!
Should old acquaintance be forgot and ne’er brought to mind, should old acquaintance be forgot in days of auld lang syne….