4 evolutions of the real estate market Triangle
Editor’s Note: Every Friday, WRAL TechWire takes an in-depth look at the Triangle real estate markets, including the latest Triangle real estate market data and why the Triangle real estate boom may or may not be over the top. reports this week. Jason Parker, WRAL TechWire reporter, author of the report and licensed realtor in North Carolina, works with reporters from WRAL.com to track and present market data and report on how people are experiencing changing real estate markets in the region. These special reports will use the category tag “Triangle Real Estate” or “Triangle Real Estate Market”.
RALEIGH- The fundamentals of the Triangle real estate market have changed since the start of the year, which could mean that the Triangle real estate boom is over, at least for now.
Local realtor Tony Fink with Linda Craft Team REALTORS in Raleigh told WRAL TechWire on Thursday that there are four factors that together have changed the real estate market from a strong seller’s market earlier this year to a balanced where neither sellers nor buyers have the upper hand in negotiating deals, as we enter the fall markets.
But Jodi Bakst, owner and broker-in-charge of Real Estate Experts, told WRAL TechWire that overall the Triangle market isn’t really slowing down, at least compared to other markets.
“The Triangle tends to be hit last by what’s happening in the market,” Bakst said. “It remains to be seen whether we are bulletproof.”
And some indicators show that the housing boom may be over in the region, at least for now, in the short term. That’s not to say home sales prices will drop, Fink noted. Just that there are multiple indicators showing that changes in the market and macroeconomic climate have started to accumulate and could have an impact.
The triangular housing boom is over: now a buyer’s market, prices go down, days to sell go up
What is happening
First, price appreciation has slowed.
“House prices have risen quite significantly,” Fink said, whether you look at that as year-over-year gains or when you look at three-year gains since 2019.
For example, year-over-year price appreciation from August 2021 to August 2022 in counties Durham and Wake, as well as the region’s housing market as a whole, still shows increases. two digits, according to TMLS data.
In Wake County, prices were up 18.8% year over year, and in County Durham, prices were up 18.6%. Across the region, prices were up 15.4% year-over-year.
But the price appreciation is due to year-over-year gains recorded by TMLS in February 2022 compared to February 2021, when the Triangle region recorded a price increase of 23.9%.
Additionally, in Wake County, between February 2021 and February 2022, prices increased by 23.6%. And in County Durham, prices are up more than $100,000 year-over-year with gains of 35.4% between February 2021 and February 2022.
“Price growth has definitely stabilized,” Fink said, noting that the decline in median home sale prices since June 2022 now shows “the first downward trend in a little while.”
Triangle’s property market is slowing, but agents warn it could just be one season
Inventories – and mortgage rates – continue to rise
Two other market factors that have changed the Triangle’s local real estate markets, according to Fink, are an increase in the number of homes available for purchase and rising mortgage interest rates.
Again, compared to February, there are significantly more listings and interest rates have jumped.
Fink analyzes what he calls “point data” on the first of every month for stock levels.
As of Thursday morning, there were 5,102 homes available for sale in the area it tracks data from, he said. That’s a significant increase from the 1,680 homes available for sale in the same geographic region as of Feb. 1, Fink noted.
And then there’s skyrocketing mortgage rates, which for homebuyers means higher monthly cost of ownership and longer-term borrowing costs that come with financing a home through of a mortgage.
On Thursday, the typical mortgage rate for a 30-year fixed mortgage had risen to 5.66%, up 0.11% from the previous week and up 2.79% year-over-year, according to data from Freddie Mac.
In early February, data from Freddie Mac shows the typical mortgage rate for a 30-year fixed mortgage was 3.55%, so rates have risen more than 2% in the previous seven months.
That changed the cost equation for some homebuyers, Fink said. And it’s also changed what existing homeowners do to access their home equity, even as record numbers of people in North Carolina are now considered equity-rich.
The latest Wake County Deeds Registry data shows a 15% drop in refinance activity in July 2022 compared to June 2022. But that activity is down 31% from July 2021, while there was a growing gap in the real estate market.
Home affordability takes another dip in Raleigh – but buying demand remains strong, agents say
Still feeling of economic uncertainty
“These aren’t necessarily bad things,” Seth Gold, a licensed real estate agent with Bold Real Estate and Governors Club Realty, said in an interview with WRAL TechWire on Thursday. “Our region has always seemed to be below where it should have been in terms of price and growth, and I think we’ve just caught up with that.”
Yet the macroeconomic climate has changed quite dramatically since the start of the year, with continued inflation and lingering concerns about inflation prompting the Federal Reserve to raise interest rates, which has also led to an increase mortgage lender rates. And continued stock market volatility along with lingering forecasts of an economic recession spooked investors even as costs rose.
So, with home price appreciation slowing or plateauing, mortgage rates rising and more homes for sale on the market, as well as ongoing concerns about the macroeconomic climate, Fink said, “buyer sentiment has changed”.
But for those looking to buy this fall, the market may now be balanced. This means that neither buyers nor sellers would have the upper hand in negotiating the price or terms of a sale.