Raleigh’s housing market avoids – so far – turmoil hitting other metros

RALEIGH- A new analysis of real estate data from 90 metro areas shows Raleigh’s housing market to be stable, although other areas are seeing indicators that their local real estate markets are slowing or falling precipitously.

The study, released earlier this month by national brokerage Redfin, notes that the 10 housing markets experiencing cooling are all Western metro areas, while many Midwest and Northern markets -is traditionally affordable remain among the slowest cooling markets.

But it’s also because those Midwestern and Northeastern markets may not have seen house price increases during a pandemic boom experienced in places like Boise, Idaho, or Austin, Texas.

Still, Redfin’s analysis notes that “no market is heating up.” Even in the Triangle, where median home sales prices in Wake County hit a new record high last month, there are indicators that the Triangle real estate market may be slowing.

Data shows Triangle’s housing markets may have cooled in June – except for renters

What causes the cooldown

Why? One factor: Raise mortgage rates for borrowers who rely on a mortgage to finance a home purchase.

The rapid rise in typical mortgage rates, which have almost doubled since the start of the year, is one of the main factors explaining why housing markets nationwide are experiencing a slowdown, according to the authors of the Redfin study. .

The latest data from Freddie Mac shows that typical mortgage rates on a 30-year fixed mortgage have increased from the previous week and are now 5.51%.

Nationally, the change in mortgage interest rates caused housing costs to soar on a monthly basis, to 45% year-on-year, according to analysis by Redfin. As mortgage interest rates rise, the cost of borrowing to finance a home purchase also rises, which could result in a loss of purchasing power for potential buyers. A Raleigh housing market study released by Redfin earlier this year found that Raleigh home buyers could lose $13,500 in buying power with a 0.4% rate increase, if prices housing was not increasing.

“Our national outlook for the housing market is that sales will continue to slow,” said Taylor Marr, deputy chief economist at Redfin, in an interview this week with WRAL TechWire, “but some of the early demand indicators are stabilizing. “.

Wake County median home sale price hits new high in June: $493,161

Raleigh: “Working Along”

The current consensus among Redfin economists, Marr said, is that housing has already largely undergone many adjustments due to the country’s macroeconomic environment with higher interest rates and inflation weighing on housing.

So, Marr said, the rest of the economy could actually follow the housing market if the country entered a period of economic decline or recession.

But while some metro areas have been very reactive to rising interest rates, causing a significant cooling in indicators tracked by Redfin, Raleigh is not one of them, Marr said.

“Raleigh is going straight ahead,” Marr said. “Raleigh is basically the typical US metro because the whole US market has adapted.”

Of the 90 eligible metropolitan areas analyzed in Redfin’s analysis of where markets are cooling the most, Raleigh ranked 42nd. On some metro area housing market metrics, the area outperformed the national average, and in other areas, the national average outperformed Raleigh.

But Raleigh’s housing market is showing signs that buyers may be in a better position than in recent months, with more homes available.

“We have more inventory, but not enough,” said Courtney Brown, a Hunter Rowe real estate agent based in the Triangle. “It’s a strange market because if you price and prepare your home correctly, it’s always a seller’s market, and if homes aren’t priced or prepared well, buyers can have an opening.”

And, as more homes become available, the number of homes where sellers have chosen to lower their asking price has also increased in recent weeks.

Prices are falling for many homes in the Raleigh area; the lists are also growing

How Raleigh Compares

“There are many similarities between Raleigh and Austin, such as profound economic and population growth,” Adrienne Cole, president and CEO of the Raleigh Chamber of Commerce, told WRAL TechWire earlier this year. “But Raleigh is a unique community that offers some advantages over Austin.”

“As a community, we benefit from a more diverse economy, provide for extensive transit options, and are very accessible to other major metros along the east coast,” Cole said.

WRAL TechWire and WRAL News analyzed Redfin housing market data in the metropolitan statistical areas of Raleigh, Durham and Charlotte, and compared the data to the same measures of housing markets in the metropolitan areas of Austin, Texas, San Francisco , California. , and Nashville, Tennessee.

Percentage of households under contract after two weeks in selected metropolitan areas. (Redfin data, image generated via Redfin.)

Of these markets, the Durham property market remains the market most likely to see a house for sale under contract within two weeks of it going up for sale, with 44.2% of houses under contract within that timeframe. Durham is also the market of those analyzed where there has been the least percentage of homes to see a price drop.

And in Charlotte, 42.2% of homes for sale are under contract after two weeks on the market, while in Raleigh, 41.4% of homes are under contract within 14 days of listing.

In Austin, comparatively, just 30.5% of homes listed were under contract in the first two weeks of availability, as of the most recent month of data in June 2022.

Percentage of homes with price drops, for selected metropolitan areas. (Redfin data, image generated via Redfin.)

Median selling price, measured by two indicators

While San Francisco and Austin are experiencing a decline in the percent change in median selling price per square foot, North Carolina metro areas are proving much more resilient, with price per square foot continuing to rise from low to high. mid twenties. . The Nashville market is similar, as this metric has fallen less in recent months compared to Raleigh, Durham or Charlotte.

Year-over-year change in median price per square foot, in percentage, for selected housing markets. (Redfin data, image generated via Redfin.)

Additionally, the median sale price of real estate in Raleigh continues to rise, with June 2022 marking another all-time high in Wake County, with the median sale price in the county approaching half a million dollars at 493,161 $.

And compared to other markets analyzed by WRAL TechWire and WRAL News for this report, Charlotte and Raleigh’s median selling price increased the most, year-over-year, in percentage gained, between June 2021 and June 2022. The Charlotte market saw a 20.6% year-over-year increase while the Raleigh market saw a 20% gain in the Metropolitan Statistical Area, which includes Wake Counties , Johnston and Franklin.

Year-over-year change in median selling price, in percentage, for selected housing markets. (Redfin data, image generated via Redfin.)

Comments are closed.