Lack of inventory ‘driving force’ in housing market

Buyers

hasn’t stopped because of the strong demand for housing, according to real estate agents interviewed earlier this week.

by CHRIS BURRITT

NW GUILFORD – Although slowing from its frenzied pace of a year ago, Realtors said northwest Guilford’s housing market remains robust as buyers continue to compete for a shortage of supply in homes for sale.

Despite rising interest rates over the past year, sellers of desirable properties are still often entertaining multiple offers, sometimes for more than the asking prices. That exuberance has slowed since last year, but it

“ e driving force is denitely the lack of inventory,” said Tim Atkins, an Allen Tate agent in Oak Ridge. “ ere is still a lot of buyer demand.”

Even so, northwest Guilford’s market slowed in the first quarter, according to Triad Multiple Listing Service statistics compiled by the Greensboro Regional Realtors Association (GRRA).

The average price of a house in Oak Ridge and Summerfield slipped 4.5% in the three months ended

March 31, from $558,201 a year earlier to $533,267, according to GRRA.

In Stokesdale, the average price edged up about 6.7%, from $432,150 a year earlier to $461,277.

In all three towns, houses remained on the market for more days during the first quarter than a year earlier, GRRA said. Buyers paid slightly less than asking prices January through March, whereas they paid slightly more in the first quarter of 2022.

Keller Williams agent Gil Vaughan said he believes the decline in sale prices has more to do with some sellers “overpricing their houses and then having to come down to what’s more reasonable.”

The slowdown also suggests that higher interest rates have had a dual impact, according to some Realtors. Not only have higher borrowing costs kept some buyers out of the market, but they also have motivated some homeowners to stay put because they’d pay higher rates to buy new homes.

Earlier this month, the Federal Reserve raised interest rates by another quarter percentage point, its 10th increase aimed at curbing inflation. As a result of the Fed’s actions, the average 30-year fixedrate mortgage rate climbed to 6.4% in the first quarter from 3.8% a year earlier, according to Fannie Mae, the government-sponsored mortgage loan company.

Last month, Fannie Mae forecast that rates will slip over the next three quarters and decline to 6% for all of 2003. That’s still higher than 5.3% in 2022.

“The higher rates had an initial impact of slowing down buyers who were used to much lower rates,” said DeDe Cunningham, a Keller Williams agent who focuses on Oak Ridge, Summerfield and Stokesdale.

“But for most buyers, it was a pause because they realized that home prices are not decreasing,” Cunningham said. “Home prices are actually continuing to increase, so if they wait to purchase based on the rates long term, they’re actually going to be paying more.” to create more than 2,400 jobs over the next decade, leaders in Oak Ridge discussed as recently as this month how they intend to handle growth pressures.

Along the same lines, Atkins said he’s seen an increase in the number of appraisals coming in for less than tentative asking prices, reflecting that sellers are seeking too much. Or, he said, the houses aren’t in tip-top shape.

“Most people want move-in ready,” Atkins said.

Nationally, the housing inventory is down 40% compared to 2019, according to Lawrence Yun, the National Association of Realtors’ chief economist and senior vice president of research. The shortage is weighing on the growth of the housing market, he said during a conference earlier this month.

The proximity of the new jobs to the airport “is going to make Oak Ridge a very attractive place to live,” Ben Walraven, an active town volunteer, told the council during its meeting earlier this month.

“I think we’re all acutely aware of the development that’s occurring, particularly at the airport, which is close by and which naturally is going to put pressure on Oak Ridge,” council member Spencer Sullivan said.

He added that the town’s planning for managed growth is “designed to maintain the character of our town and to preserve a quality of life while allowing for that growth.”

In Summerfield, the prospect of the Triad attracting thousands of new jobs is figuring into the debate over apartments.

Citing the new jobs, state Senate President Pro Tem Phil Berger said the region needs to create more housing opportunities. The Republican senator is weighing whether to support Summerfield landowner David Couch’s request that the state legislature approve de-annexation of 973 acres where he wants to build apartments.

Unlike a year ago, he said, “we may not see 15 offers in two days, but we may get four or five.”

Northwest Guilford’s housing shortage has longer-term repercussions as the creation of new aerospace jobs around Piedmont Triad International Airport draws people to the area who will be seeking housing, Realtors said.

Spurred by Boom Supersonic’s announcement last year that it plans

“When all of these jobs start hitting, we are going to need more lots” for new houses, said Jason Smith, who owns Smith Marketing Inc. with his mother, Betty, and brother Jeff.

Additional jobs “will put more pressure on the limited supply that we already have,” Cunningham said. “I’ve already had several clients with companies coming into the area looking for housing and our inventory is limited.”