The Triangle housing market did not show much of an improvement in second quarter 2010 from the first quarter, reports the Durham Herald Sun.
While there were increases in the number of units closed, as well as increases in the number of building permits issued and lots closed, those familiar with the local housing market say it’s still in recovery mode.
“What I see is confirmation that we’re bumping along the bottom,” said Nick Tennyson, executive vice president of the Home Builders Association of Durham, Orange and Chatham.
According to recent data released by Market Opportunity Research Enterprises, a real estate research firm in Rocky Mount, the number of homes sold increased by double-digit percentages in Durham, Wake and Orange counties, along with increases in median prices — save for in Durham, where prices dropped slightly by 2.7 percent to $180,000.
Like in the first quarter, building permits issued and lots closed increased significantly when compared with the same period in 2009.
In Durham, building permits issued increased by 24.7 percent to 237. The number of lots closed more than doubled to 239 in 2010, on top of a slight 3 percent increase in price as well, to $34,000.
Orange and Wake both saw decreases in building permits, by 26.9 percent and by 5.5 percent, respectively. In Wake, the number of lots closed more than tripled to 712. Orange saw a comparatively modest increase of 23.7 percent in lots closed.
“It’s so easy for a swing to look big against the background of this activity,” Tennyson said. “It’s amazing to me how many lots have closed this year. That’s clearly a statement on somebody’s part that we’re at the bottom and it was time to buy some lots.”
Bernard Helm, president of MORE, said the second round of homebuyers tax credits, which ended in June, took a lot of buyers out of the market for July.
“Forward visibility is extremely murky,” he said. “Normally, July sells about 1 percent fewer homes than June. But July sales this year are down about 35 percent from June [in the Triangle]. That reflects directly on the tax credit intervention.”
“I think the second quarter numbers are very misleadingly optimistic about the conditions of the market, and that July’s numbers are just the reverse,” he added.
Tennyson said that remodelers are getting more work this year, but custom builders are working with a shorter backlog, but doing better than in 2009. As far as bigger builders, Tennyson said, they have been consolidating.
“We’ve seen an increase in market share for the production builders, but it’s on such a low base,” he said. “There just aren’t a lot of folks who are able to get financing now to build that are the small volume guys.
“Until we can get more job growth in the area and get people confident about the employment picture, I think we’re going to be fighting along this bottom,” Tennyson said.
The National Assoication of Home Builders reported builder confidence in the market for newly built, single-family homes edged down for a third consecutive month in August, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released yesterday. The HMI declined one point to 13, its lowest level since March of 2009. Click Here to view the HMI report.
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