I've been waiting for these numbers about the Chapel Hill, Orange, and Chatham Counties real estate market and I'm not surprised with the findings. I'm not sure why but things seemed to have picked up since the first of the year maybe because of the low rates. There is mortgage money available for those with good credit and a little money. FHA loans require 3.5% down now but that can be a gift and that's often how first time buyers buy. A buyer with good credit and 20% down can pretty much write their own ticket and close in 30 days. There are some deals out there. I'll pass on the market conditions as they change hopefully for the better. ORANGE COUNTY CHATHAM COUNTY
Greater Chapel Hill Association of REALTORS MARKET STATISTIC REPORTS Fourth Quarter 2008
| Fourth Quarter 2008 Market Summary |
The turmoil in the national financial markets during the third quarter of 2008 produced a bunch of scared consumers which in turn produced a bunch of scared employers. The employed workforce failed to grow in four of the last five months of 2008. The last time this happened was during the 2000 v. 2001 time period. The annual average of the employed workforce was flat compared to 2007 and there are almost 200k more workers in our market compared to 1990. The combination of a lower amount of employed workers and the inability of inbound transferees to sell their existing residences continues to produce even lower levels of house buyers. This cycle, as reported during 3Q/08, continues to produce lower residential closings and increased residential inventory.
Fourth quarter showings were down 43% in Durham, 29% in Orange and 31% in Chatham compared to fourth quarter 2007. The three counties bucked the overall trend and had decreased inventory compared to fourth quarter 2007. Orange inventory decreased 1%, Chatham inventory was flat and Durham inventory decreased 8%. The majority of the Triangle inventory decrease can be attributed to the new home market. Area builders have marching orders to sell inventory and not to replace at previous levels. The three county market had a drop in resale inventory. During the fourth quarter, Durham resale inventory dropped 3%, Orange resale inventory dropped 5% and Chatham resale inventory increased 3%. Current sellers have been very reactive to market conditions. The number of sellers who have dropped price from original list has increased significantly in each county. Those sellers who have not found a price acceptable to current buyers have produced a dramatic increase in the number of expired and withdrawn listings.
Lower showings typically produce a lower amount of pending sales. Listings with a status change from active to pending decreased 23% in Chatham, 30% in Durham and 29% in Orange. The number of expired and withdrawn listings has increased dramatically in each market. These are sellers who have yet to adjust to current market conditions or do not have pricing flexibility.
The result of the above has been a decrease in the amount of closed sales. Durham annual closings are off 26%, Orange closings were off 29% and Chatham closings were off 25%. Fourth quarter closings were off a minimum of 30% in each county. The average days on market for closings increased to 113 in Chatham, increased to 111 in Durham and increased to 83 in Orange. The average for TMLS was 100 days.
The dramatically lower amount of closings has produced a higher current supply. The current supply of housing in TMLS is at 7 months. Per the National Association of Realtors, the national current supply of housing is 11 months. The current supply in Durham is 6 months, the current supply in Orange is 7 months and the current supply in Chatham is 12 months.
Data regarding house prices produces mixed signals. The average list price was flat in Orange and Durham and up 5% in Chatham compared to fourth quarter 2007. The average closed price during the fourth quarter was down 2% in Durham, down 8% in Orange and down 5% in Chatham. On average, sellers in each county continue to sell for more than they paid. The average seller has gained 3% per year of ownership in Durham, 5% in Orange and 4% in Chatham. I would expect that these numbers would decrease as each county struggles to move inventory.
All segments within the three counties have been affected. Annual closings in the Chapel Hill/Carrboro High School district were off 26%, the average sales price decreased 7% and the median sales price increased 1%.
As I stated in the last two quarters, many agents that I have spoken with have stated that they have buyers who are able, but not currently willing to purchase a residence in our market. Consumer confidence is at all time lows and the layoffs seen nationally have begun in the Triangle. When this "dam" will break is anyone's guess, but I would state that increasing employment, not decreasing employment is the main breaker. In the mean time, only serious sellers with pricing flexibility need to have their house listed for sale. There were segments of the Triangle market for which there were no buyers during 2008.
There is some good news in the national real estate market that could bode well for our sellers. The National Association of Realtors reported its pending sales index had increased for the first time in many months. Areas that had increased activity were ones that were able to cut list prices on houses by a significant amount to induce sellers. While significant price cuts may not occur in our market during this year, a freer flow of inbound transferees will certainly help. STACEY ANFINDSEN |
;)
;)
