February and March Update:
We are at the 1 year mark now, and if anybody had asked me what I thought the market would have been like I would not have guessed it would be the most extreme seller's market the area has ever experienced. Without a major economic or other drastic change, home prices in the Raleigh/Durham area should go up around 15% this year. This would be a new record! It's all down to supply and demand: we have very few homes to sell and twenty buyers for every one seller. Hopefully with prices increasing it will encourage more homeowners to sell. Fingers crossed!
It's not uncommon for a $400,000 house to go for $475,000 in the current market, with the buyer covering the gap between the appraised value and the contract price. It's a great time for sellers, but a difficult time for buyers.
December and January update:
We are not getting the listings we need! There is so little supply that most listings that are well prepped for the market are going over asking price. The rule of thumb for a sellers market is anything under 4 months of inventory supply (meaning if no other homes came on the market then all supply would be exhausted in 4 months). We are now at 0.9 months in some parts of the Triangle. See below table for Durham:
October and November update:
I'm writing this section on December 2nd, and the market activity has finally started to slow down a bit. Usually the slowdown comes in early November, but the market remained strong for longer than usual into Thanksgiving.
Desirable homes are still selling at or above asking price, but the rate of sales has slowed. We have both less home buyers and less home sellers this time of year. I would say the market activity is about 1/3 of what it is in busiest time of year (Spring and early Summer).
We are wrapping up a crazy year, with the busiest summer and fall I've seen. The Triangle market has appreciated between 7-9% this year, depending on what metric you use (average sale price or median sales price). Those are pretty strong numbers, and hopefully we can extend those gains into 2021. With the expected population increase and housing demand in the area it looks promising.
Prices are still going up due to lower levels of inventory (less homes are being listed than normal). The market should start to "slow" a little bit as we get closer to the holidays. However, I think bidding wars will still be common this fall on a lot of homes due to low inventory.
July and August update:
The market is currently the busiest I have ever seen it for this time of year, and many homes are selling a good 2-4% over asking price with multiple offers. The low inventory plus high demand is causing these price increases.
With lots of time being spent inside people are focusing more on housing. I've noticed more people are looking for the larger house and/or larger yard so they have more space to enjoy. Upgrading from a smaller home or apartment to a larger home, or a townhome with a yard has become much more common.
The market is even more competitive right now than it was in May. The big wave of sales that was expected after the stay at home order was lifted has happened, and a large portion of homes are selling at or above asking price.
Another difference between May and June is we now have more inventory coming on the market, so the volume of home sales is increasing. In May people weren't listing their homes because they did not want people coming into their homes for showings or open houses. That has started to lighten up a bit, with more people comfortable with listing in June versus May.
The market has become a strong sellers market due to not enough homes being listed. Many people who occupy their home are not wanting to list during coronavirus, and so the supply of homes for sale is very low. Demand hasn't changed nearly as much as supply, and therefore prices are going up with multiple offers on many listings.
With the coronavirus affecting the Raleigh-Durham area just like the rest of the country, several changes to our market have taken place. Withdrawn listings are up 700% according to the MLS (multiple listing service), and people are staying at home due to the stay at home order. In-person showings are only allowed on vacant homes in Durham (but are allowed for all types of occupancy everywhere else - Raleigh, Chapel Hill, Cary, etc).
It's not all bad news however, as when I look through the recently listed homes a large portion are still selling quickly, especially in the sub 400k market. People are still needing to move and still purchasing homes. Even in Durham, where in person showings of occupied homes are not allowed, home buyers are using 3D virtual walk-through tours, or having their agent facetime them. They then place an offer on a house without actually seeing it in person using a sight-unseen addendum that was created.
The low days on market count ("homes selling quickly") that we are still experiencing is due to the low level of inventory in the market. Before coronavirus we had levels of inventory of around 2 months. Anything below 3 months can described as a strong sellers market, and with home sellers taking their homes off the market right now inventory levels have not increased. With supply so low, it would take almost zero demand to move us from a sellers market to a neutral market.
I have clients on both the buying and selling side who are waiting until the stay at home order is lifted to move forward. Once that happens, we should see a huge wave of activity and sales. Even though we are still in sellers market, the amount / pace of sales is slower than normal right now. That should change once the stay at home order is lifted and everyone who has been waiting starts to look at homes again.