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.