Triangle home prices up in May, but demand might be leveling off

Single-family home sales in the Triangle were up 3 percent in May, with the average sale price up 8 percent year-to-date – but sales in Wake County have been lagging for two months.

According to Triangle Multiple Listing Service, sales in Wake County were down 2.2 percent in May compared to the year prior and averaged nearly $332,000. Sales in April had also been down by a rate of 1.2 percent.

The reports indicate that buyers who can’t afford – or don’t want to pay – the higher home prices in Wake County neighborhoods have started looking to neighboring counties where homes are cheaper.

Home sales in Durham County, where the average home price was $250,106 in May, increased 12.4 percent to a volume of 562 units sold. Durham’s average home price is up 6.9 percent year-to-date.

Johnston County sales were up 6.4 percent to 380 units, with an average price of $211,535. The county’s average home price is up 7.8 percent year-to-date.

Orange County home sales, where the average price is nearly $389,000, was flat with 224 units sold in May, the same number as the year prior. Orange County’s average home price is down 1.7 percent year-to-date.

All of the Triangle’s core counties have been working with an anemic level of inventory of homes for sale since 2014, and in May, the inventory level dropped to 2.5 months of supply. The average days on market dropped to 42 days in May compared to a 48-day average in May the year prior.

On one company’s website, it was stated that with a continuing high demand from buyers, sellers might be tempted to list their home at a higher price with the idea that they can reduce the price later.  That’s probably not a good strategy.

The National Association of Realtors has studied this and found that a home that is overpriced will often result in decreased buyer activity. If a home is priced correctly for the market, 60 percent of potential buyers will look at it. When a home is priced 10 percent above market value, the interested buyer pool drops to 30 percent.

“Your home will receive the most interest and foot traffic within the first few days of listing. If it’s priced too high, buyers won’t come back later for a second look,” Riley says.

by: Amanda Hoyle; Triangle Business Journal

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