2009 Durham Luxury Market

A first pass looking at the Durham luxury home statistics for 2009 you might not guess that we’re in a recession. In the 4th quarter 3 homes  closed in Durham for prices over $700,000, the somewhat arbitrary cut off point I use for analyzing the luxury home market in Durham. However, the total for the year was 33 which is only a sale or two below the average for the last several years.

Durham also has less inventory than it has typically had with only 66 active listings, of which 11  are the as yet un-built Brownstone Townhomes at Watts and Lamond Streets. This means that Durham now has an absorption rate slightly worse than Orange but about the same as Wake and considerably better than Chatham. This is also better than past years when Durham typically had about two and a half years of inventory on the market at any one time.

But this is not really good news. Besides the fact that the market is not growing the primary marketing strategy in Durham seems to be to dump prices. Of the 33 homes sold only 4 did not have price reductions. At least two of those actually sold for more than list price but were new homes and were more likely charging for upgrades.

It took a little bit of digging but I was able to calculate the total price reductions in spite of the fact that many of the homes were on and off the market. What I did was find the highest price the home was first offered by the seller of record and subtract the sales price. The average price reduction for the homes that did have a reduction was over $175,000. The highest was $820,000 and the lowest was $10,000. The highest percentage reduction was 35.8% and there were 11 in double digits.

The Hope Valley neighborhoods continued to dominate sales with 11 of the 33. The Oaks had 4 but no other neighborhood had over 3 sales of more than $700,000 so it was spread around. The new subdivisions around and south of Southpoint did well enough to indicate a possible trend in that direction.

I first conceived of this site and the reports that I have produced about two years ago and it was launched with a long report on the Durham Luxury Market that is still available through this link or a link on the left sidebar. The first post was in March of 2008. The purpose of the report was to encourage sellers to demand more sophisticated marketing of their homes. The data does not show that that has occurred in any significant way. Huge price reductions are a blunt instrument and very expensive in the long run.

Because of that I had announced my intention to suspend my efforts to keep adding to the 80+ posts that I have already written. However, I have changed my mind. In spite of my rather crude webmaster skills, the site has built an audience. Instead, I’m going to reposition it some in the coming months and give it a more professional look with a theme called thesis and integrate it with my two other blogging efforts, SpringtreeTerritory and 4PsRE.  More on this in the coming weeks.