Fayetteville area housing market sluggish while nation rebounds

The outlook for Fayetteville’s housing market remains uncertain going into 2013, despite strong signs of a rebound across the state and nation.

Local sales were down in November from the month before, and buyers continue to hold an advantage because of an oversupply in listings of existing homes.

There are hints that the sluggish market is picking up; the 405 total closings in November was well above the 333 closings a year ago. But the threat of the fiscal cliff has some real estate agents and builders cautious as they look ahead.

Nationally, the overall number of Americans who signed contracts to buy homes increased in November to its highest level in 2 1/2years, according to the National Association of Realtors. Excluding the months when the homebuying tax credit was available, it was the best reading since February 2007.

The Realtors group forecasts that U.S. sales may rise in 2013 to about 5.1 million. That’s still below the more than 5.5 million that is considered consistent with a healthy market.

Fayetteville Realtors, though, are hesitant to predict what might happen next year in a market where cuts in federal spending could have drastic consequences. “If you can tell me how are we going to cross the fiscal cliff,” Realtor Doug Nunnally said, “I’ll tell you the answer to that one. I don’t know. One of the things we have found interesting in the past: The housing market has normally brought the economy out.”

Zan Monroe, the executive vice president of the Fayetteville Regional Association of Realtors, will discuss the trends he sees for 2013 at the association’s third-annual State of the Real Estate Address on Jan. 17. Elliot Eisenberg, former senior economist for the National Association of Home Builders, will provide a new construction economic impact study for Cumberland, Hoke and Harnett counties.

The program, which is free and open to the public, is 10 a.m. to noon at at the Holiday Inn Bordeaux Convention Center.

Ralph Huff, a Fayetteville homebuilder and owner of Coldwell Banker Advantage, said he expects the market to be status quo in 2013.

“Our deployments and returns are going to slow down,” he said. “The 8,000 troops that came back in September gave us kind of a year-end shot in the arm that helped with 2012. I don’t think we’re going to have that in 2013. My game plan is to do about the same number of units in this market as we’ve done the last couple of years.”

Over that time, Huff’s HH Homes has closed on about 250 sales annually in the Fayetteville market, Huff said.

“We’ve been much healthier than any other market in North Carolina but Jacksonville,” Huff said. “We don’t have to go up. Other areas are trying to get to their 2002, 2004 levels. They’ve got further to go to get back to their market.”

For years, Fayetteville’s real estate market fended off volatility because of steady employment and payroll from Fort Bragg. The market was among the last in the nation to feel the effects of a weakened housing market.

Now, it appears it could be among the last to snap out of the housing slump.

“Raleigh, Charlotte are picking up. Their markets are picking up. Ours hasn’t,” Nunnally said. “I think in our market, it’s being driven a lot by Fort Bragg and what happens to the military and what happens to the contract base, because everybody is concerned about sequestration. Even though the defense budget passed, there’s a big unknown out there. I think it’s hurting our community.”

The Fayetteville market includes Cumberland and Hoke counties, about half of Harnett County and other surrounding areas.

David Evans of Manning Realty, a former president of the local Realtors association, said lumber prices are predicted “to go through the roof” over the next couple of years. If that happens, he expects the cost of new construction to go up.

Evans studies the inventory numbers for existing homes on the market. For more than two years, Fayetteville’s supply of homes for sale has been much higher than demand from buyers. But the oversupply of inventory appears to have peaked in July, according to Evans’ analysis.

“It is a factor of how many houses are coming off the market to how many are selling,” he said. “If the inventory level gets smaller, it affects supply and demand, and means we’re getting better. We’ve had incrementally more demand than supply over the last four months. That tells me we’re getting more toward a balanced market.”

Staff writer Michael Futch can be reached at futchm@fayobserver.com or 486-3529.

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