Single Family Homes in Short Supply

If you're coming from another part of the country that still has a depressed market, get ready to be surprised. Except for the highest price points, we are in a seller's market in many parts of the Triangle. The real estate market is heating up in general, and the western part of Wake County is just plain hot. We don't have many distressed sales, we do have people who buy homes for cash, and in Western Wake County we have a shortage of properties for sale.

The Cary, Apex, Morrisville area averaged a two-month supply of homes in inventory  for all of 2013, and the South Cary, Holly Springs, Southwest Wake averaged a three month supply. The market is even hotter than it sounds for most properties, because that includes the high priced/luxury  homes that sell more slowly. (The term "supply" means how long it would take to sell everything listed if nothing else were put on the market- also called the absorption rate. )

The break even point is between a Buyer's and Seller's markets is six months.  So a five month supply would be just into a seller's market,and seven months would be just into a buyer's market.

The under $300,000 price point is very important. The 2013 average closed sales price in the Triangle MLS system was $246,700 for new and resale homes combined  and $231,000 for resale homes only.  Homes in this price range are in short supply.

Cary, Apex, Morrisville (CAM) averaged only a one-month supply of homes under $300,000 for all of 2013, and South Cary, Holly Springs, Southwest Wake (SCHSSW) averaged a one-month supply for homes under $150,000 and a two-month supply for homes $150,000-$300,000. The Average Days on Market for all price points for these two sub-markets were 78 and 86 days respectively.

This shortage eases slightly as prices increase. CAM had a 2-3 month supply and SCHSSW a 3-4 month supply in the $300,000-$600,000 range.  The numbers climb to 4 months for CAM at 600,000-$800,000.

The first Buyer's market numbers don't appear until above $600,000-$800,000 in SCHSSW - with a seven month supply. Both sub-markets are back into Buyer's territory at prices above $800,000 with seven and nine month supplies respectively.

Foreclosure Sales Down, Cash Sales Up

There are a couple of more interesting notes about our market that might surprise you. A lot of transactions are all CASH. People are not taking mortgages to buy these homes. In fact, 20% of all TMLS closings 4th quarter were cash deals. Be very aware if you are advised that you can pick up a property for cheap if you can pay cash, because that will impress someone.  One in five of our transactions already are cash.

Who are they advising you to impress? Foreclosures and other kinds of distressed properties top the list.  Again, if you are coming from another part of the country that has a lot of distressed property,  our market is different. Listings designated as distressed in our MLS dropped from 10% in 2012 to 7% in 2013. Think about that a minute. There are almost three times as many people already paying cash outright for property in the Triangle as there are distressed sales combined.

My last point is how critical it is to price your property correctly from Day One. You will get a higher sales price statistically if you hit the sweet spot of the market. Properties priced correctly initially sold for an average of 98% of original list price in 61 days average. Properties which had to reduce their price sold for an average of 90% in 161 days average. In addition to the difference in sales price is the added cost of over three months of extra mortgage and other expenses.

Data was compiled from Triangle MLS by Stacey Anfindsen of Birch Appraisal Group, Cary. While deemed accurate, they are not guaranteed.