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Four years ago, in February 2007, the average price of houses sold in the Triad peaked at more than $205,000.
But trouble lay ahead.

Ten months later, the nation would plunge into a prolonged recession from which the local housing market — and the economy at large — has yet to recover.

Evidence can be seen in the latest housing figures, which show that the average sale price in February 2011 had dropped to just over $156,000.

That’s a decline of nearly $49,000, or 24 percent, and the lowest average in more than 13 years.

The number of sales in the Triad has plunged as well, dropping nearly 48 percent in the past 61/2 years.

Economists say the situation may get worse before it gets better.

“We’ve been through a bad downturn,” said Don Jud, a professor emeritus at UNCG’s Bryan School of Business and Economics who tracks local housing data. “We are not certain that we are at the bottom yet.”

Housing numbers for Guilford County are just as bleak as those in the Triad.

In September, housing prices in the county fell below $152,000, the lowest average since Jud began collecting data in 1997. That represents a decline of more than $45,000, or 23 percent, in the past four years.

In addition, since November 2004, the number of houses sold in the county has dropped nearly 45 percent.

At existing sales rates, Jud said, it will take nearly 15 months to sell all the houses on the market in the Triad and more than 10 months to sell those in Guilford County.

Among houses priced more than $500,000, the slump is particularly acute. Across the Triad, Jud said, there’s more than a 40-month supply sitting on the market.

Longtime real estate agents say they’ve never encountered such a housing slump locally.

“I have been in other markets where this took place, but not here,” said Kathleen Sullivan, president of the Greensboro Regional Realtors Association, who has been selling real estate in Guilford County for 16 years. “Greensboro was recovering from 9/11, and then this challenge hit our doorsteps.”

The same challenge hit almost every doorstep in the country.

Nationally, the housing boom began about 1997, brought on by a combination of factors, including low interest rates, generous credit and innovative mortgages.

Economists say the boom peaked about 2005 or 2006, when the average house in the nation appreciated in value by about 12 percent a year.

That’s when the Federal Reserve began to increase interest rates in an effort to deflate what it considered a housing bubble. In late 2006, housing prices began to appreciate at a slower and slower rate.

“When they got to historically low appreciation rates, they didn’t stop there,” said Michael Walden, an economics professor at N.C. State. “Then the unheard-of happened. House prices started to fall.”

Most economists blame the housing crash for making the recession so deep and long. It reduced employment in the construction industry, slashed household wealth, got banks in trouble because of risky loans, resulted in a surge of foreclosures, cut consumer confidence and spending, and curtailed municipal revenues.

“It’s affecting the whole economy,” Jud said.

Locally, the housing market experienced “a severe slump,” Jud said, rather than a crash.

Prices didn’t increase as much in the Triad as they did in places such as California, Nevada and Florida. Therefore, they haven’t fallen as dramatically as they did in Detroit (44 percent), Las Vegas (57 percent), Miami (49.4 percent), Phoenix (53.9 percent) or Tampa (43.8 percent.)

But they have fallen. Significantly.

Part of that decline can be attributed to the area’s weak labor market. Data show that as employment rates fell in the Triad, so did housing prices.

“Employment is always a driver,” Jud said. “We have had one of the weakest employment markets of any around the country.”

Supporting data, supplied by the state Employment Security Commission, show that the Greensboro-High Point metro area has about the same number of jobs today (315,895) as it had in 1996 (314,966).

For the local housing market to improve, the area needs more jobs.

“If the number of jobs is not growing, we don’t need a lot of new homes built,” Jud said. “Nor do we need to sell a lot of new homes. ... If we don’t start getting some more employment growth, we’re not going to have a turnaround in the housing market.”

Local real estate agents say they’re optimistic, in part because housing prices in Guilford County rose 1.1 percent in January.

“Prices are ticking up,” Sullivan said. “Are we stabilizing? Time will tell.”

Out of all the gloomy numbers, there’s another piece of good news.

“This is a great time to buy a house,” Jud said. “We have never had a period where there was so much choice, where there were so many bargains sitting on the market.”

Contact Donald W. Patterson at 373-7027 or don.patterson@news-record.com