October 2023 - An In-Depth Look at the Durham Housing Market
Durham is still booming even with the higher interest rates! We are seeing a 7% increase for median sales price in the past year and a 12.4% increase in average sales price. This just goes to show that a lack of supply of homes trumps everything else. Even if lower demand is present, an even lower supply will cause prices to keep rising. Higher interest rates are preventing sellers from selling, which paired with the demand for the Triangle is allowing prices to keep on their steady rise.
August and September 2023 - Raleigh-Durham Housing Market Update
The market has been pretty flat as we head into fall, with average sale price up 2.6% and median sales prices down 0.7% year/year. This is caused by a low supply (few sellers) and low demand (few buyers) market. If interest rates drop we'll likely see prices increase again, and if they keep going up will see more of this flat market or slight declines. Sellers have been reluctant to sell their 3.5% interest rate home and trade up for a higher interest rate, which really has kept prices from going down (we're still in a low inventory market). Sellers are also getting relatively close to their asking price, even with the higher interest rates. That being said, it's about ten times easier to buy in this market than say the 2021 or early 2022 markets.
June and July 2023 - Raleigh-Durham Housing Market Update
The spring market is now over, and we'll see if we have the same slow down that we had last year from August to December. Right now a good portion of homes are selling quickly: homes priced well that are in a good location still sell fast. However, there are also listings that are sitting on the market which evens things out.
Prices are pretty flat year over year - median sales price is currently down 2.8% year/year, but average sales price is up 2.5% year/year. One additional nice thing for buyers (on top of relatively flat prices) is that the due diligence fees have come down some as well.
April and May 2023 - Raleigh-Durham Housing Market Update
The market continues to improve for buyers, albeit slowly. Many of the desirable properties (especially those under 500k) are still selling very quickly with multiple offers, although compared to last year the bidding wars are much less intense. There's also a lot of properties that are sitting on the market if they need work or aren't in prime locations.
Last year from July through about January things slowed in the market and it was a good market to buy in, and I wonder if we'll have the same seasonality this year.
January through March 2023 - Raleigh-Durham Housing Market Update
At the time of this writing (Marcy 27, 2023) the market has changed seemingly overnight. We've had an uptick in demand with the spring market, and with the low inventory all of a sudden prices are moving up again. Almost all homes that my clients are bidding on are multiple offer situations.
Most of these multiple offer situations aren't as crazy as they were in 2021 or beginning of 2022, but we are still seeing a change in the market. Whereas we were transitioning to a neutral market, we are now heading back to a strong seller's market with increasing prices in our area.
In summary, prices in our area dropped ~5-10% from July 2022 - January 2023.
November and December 2022 - Raleigh-Durham Housing Market Update
Sales have been slower during the holidays, with fewer sellers coming to the market since nobody wants to give up their great interest rate unless they have to. Exchanging a 3% interest rate on your current home for a 6.5% interest rate on a new home is a tough thing to do. That has slowed the transition from a sellers market to a neutral market, as supply side has been low. This means that even with demand being less we haven't transitioned very quickly.
Home inventory levels are still at around 2 months (technically seller's market), although they are gradually increasing. A neutral market is 5 months of inventory. What will be interesting to see is whether our spring market next year brings enough demand to swing inventory the other direction. We have a strong seasonal market (slower in late fall and winter, and busy in the spring), and usually our big price gains are in the spring. If interest rates can stay around the 6% mark, things look pretty good for the spring in my opinion. An increase to say 8% interest rates would most likely dampen things.
Home prices are still up year over year in the Raleigh-Durham area (around 10%), however they have dropped around 5% off their spring/summer highs.
August and September 2022 - Raleigh-Durham Housing Market Update:
Our inventory of homes is still building! We are still in a seller's market with homes selling on average at asking price, however things are slower than they were in the spring. With affordability very low historically, many buyers are deciding or are forced to rent versus buying and building long term equity.
If our current home inventory trend continues at the current rate we will be in a neutral / balanced market in 6-12 months. After we hit a neutral market it will be another 6-9 months or so to hit a buyer's market. Sometimes with a shift things can change fast on the local level (both down and up) so we'll see if this slow trend towards a neutral market continues, or if things change more quickly in the coming months. So far, the population growth in our area has been putting a buffer on the speed of our slowdown versus the rest of the country. We were the #2 fastest market in the US last month according to realtor.com.
With inventory still low we are still seeing a lot of bidding wars on the hotter homes. This past weekend I put offers in on two homes for clients: one home had 16 offers on it and the other had 7 offers on it. It's a tale of two markets where some homes are sitting whereas the more desirable homes are getting bid up over asking price.
June 2022 - Raleigh-Durham Housing Market Update:
The June data is out and the trend of slowly building inventory continues! It's such a slow process with 0.7 months of inventory in April, then 0.9 months in May, and now 1.2 months of inventory in June. Anything below 4 months is generally considered a seller's market, so we still have a long way to go until we hit a neutral market at around 5 months of inventory. *Note: 5 months of inventory means if no new homes were listed then all homes would be sold within 5 months. 0-4 months of inventory = seller's market, 4-6 months of inventory = neutral market, 6+ months of inventory = buyer's market.
Although it's still a seller's market, at least it's not as insane as it was in the spring, which you can see from the data. In May the year over year price increases were around 21%, whereas with this June data it's 17%. Still higher than average, but heading to a more reasonable realm. Also, the average price paid for homes decreased from May to June from around 5% over the asking price to around 4% over the asking price. Again, not a huge jump but still a sizable difference.
To me June felt more like the Raleigh / Durham market in 2019, where some houses were still having crazy bidding wars but some were sitting on the market for a couple weeks.
May 2022 - Raleigh-Durham Housing Market Update:
It's finally happened! With interest rates rising we have seen a slight slowdown in the Raleigh / Durham housing market. I say slight because inventory levels are still low, so the 'days on market' and 'percent of list price received' metrics are still very much in a home seller's favor.
The key number to look at below is "months supply of inventory." This number has been going down for years, and it finally started going up with the data from May 2022. With more supply the market can finally cool off a bit and go back to a more normal market, which means less bidding wars and less competition for home buyers. Inventory is still very low at 0.9 months, but once that gets to around 4 or 5 months we will be in a more balanced market. With interest rates expected to go up we could get there - we'll see what the market does in the coming months!
April 2022 - Raleigh-Durham Housing Market Update:
There has been a lot in the news about the real estate market cooling. Though that may be true for some areas, we haven't seen it here yet. It's all based on supply and demand, so we need some build up in inventory (homes on the market) for that to happen. Right now inventory is too low for prices to go down, since it would take almost zero buyers for there to be a change towards a more neutral market versus a seller's market. Just a reduction in buyers won't do it with so few homes on the market.
As you can see in the table below the inventory levels have not gone up yet, and therefore prices are still going up. It would be nice to get back to a more balanced market with our 5% yearly price gains, so we'll see if that happens by the end of the year. As of right now it's looking like it will still be another 20% price gain year.