Local housing market on upswing

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Record-low interest rates coupled with a market glutted with homes for sale have created a buyers' market.

One factor playing into these unusual events is the poor sales year most real estate agents logged in last year.

"We got slammed," said David Huffine of Ammons Pittman GMAC Real Estate in Wake Forest. "It was not a great year."

While every major metropolitan area in the state reveled in an upswing in home sales during 2002, the Raleigh-Durham area, including Wake Forest, lagged behind.

Existing home sales last year were down 3 percent for the Triangle while Wilmington saw a 26 percent surge, according to the N.C. Association of Realtors. The Rocky Mount area posted a 9 percent increase in sales, and Wilson's existing home sales jumped by 14 percent.

New home sales

The saving grace for the Triangle was in new home sales, especially those under $125,000, and in sales north of the Triangle.

"We're as hot as a fire cracker," said Wallace Peiffer, who manages sales with Coldwell Banker Preferred Properties in Franklin and Granville counties as well as Wake Forest.

"Last year in Franklin County there were 151 new sales and 143 resales," he said. "A ton of houses sold in Franklin County."

Buyers are motivated to seek homes outside the Triangle because they generally can purchase a larger house and more land for less money. At more than $200,000, the average price of a Triangle home is exceeded only by the cost of a home in Pinehurst or the Outer Banks, both retirement destinations for the wealthy.

Construction of I-540 across northern Raleigh will most likely fuel even better sales northward, Peiffer predicted.

Home shortage?

The lowest interest rates in four decades was another driving force behind new starter home sales in the Wake Forest area in 2002.

In fact, Alice Ray of Re/Max United in Wake Forest predicts a shortage of new homes under $125,000 in the near future if sales continue at the current pace.

"It's a great time for people in apartments to be home buyers," she said. "With the payments they are making in rent per month, they realize they can make a house payment."

The unemployment factor

While unemployment in the area remains low, hovering below 5 percent -- more than a percentage point below the state average -- David Berry with 21st Century Vicki Berry Realty in Wake Forest said the particular kind of unemployment Wake Forest is experiencing has hurt it more than other areas.

"We have more people out of work, and a lot of those are high-tech jobs from the computer and telecommunications industries," he said. Those typically high-salaried workers have put expensive homes on the market as they move to new areas to take other jobs. Compounding the problem is that no new techies are moving in to buy homes; the market for high-tech jobs has flattened.

Interest rate/war gamble

"I don't anticipate (interest rates) will stay low too very much longer," Ray said. "This is an all-time low for us. The (rates) have been down on hold for too long."

Ray said she isn't too worried about a possible war.

"It won't last long," she said. "Once it's over, I think we'll see a pickup in the housing market and we'll see interest rates pick up."

Even if a war isn't inevitable, the fear of war could affect the real estate market, Huffine said.

Outlook for 2003

The first two months of 2003 have most area real estate agents more optimistic.

"January and February of this year, I've done almost better than the whole last six months of last year," Huffine said. "Things are looking up."

"We're isolated, so layoffs at the park hurt us, but we're pleased to be ahead of last year. "If consumer confidence comes back, we'll have a good year."