RALEIGH – According to an analysis from the office of the Wake County Register of Deeds, the median home sale price in Wake County as of the end of May 2021 was $374,000, up from $328,750 in January 2021, an increase of nearly 13.8% in four months.
Nationally, the median home sale price is $361,750, according to an analysis of more than 400 real estate markets across the United States by Redfin, and that’s a record high, according to the company. Meanwhile, the analysis of market data suggests that homebuyer demand has fallen in recent weeks, and now sits below 2020 levels for the first time in 2021.
“Some homebuyers are pausing or abandoning their plans to buy because homes in their area have gotten too expensive,” said Redfin Chief Economist Daryl Fairweather. “Even though there are no signs of prices coming down, homebuyers may face a bit less competition and have a bit more selection of homes this summer than they did earlier this year.”
The analysis of national market data by Redfin, which also includes data from June 1–20, found that the median home sale price increased 23% year-over-year.
The Triangle is likely to see a continued increase in home prices, Nancy Harner, the relocation director for Coldwell Banker HPW, a brokerage firm based in the Triangle, told WRAL TechWire in April. That’s in part due to the expansion of existing businesses and the announcement of high-wage jobs in the region from firms such as Apple and Google drive up wages, said Harner.
Further, more recent reports indicate that the trends in the Triangle’s real estate markets are not likely to shift any time soon.
A combination of tight supply, with a lack of existing homes entering the for-sale market and a recent lag in new construction and new lot starts due to high material and labor costs, paired with high demand for housing in the Triangle as more households from across the region or choose to move to the area for economic opportunity or to enjoy retirement, are contributing factors to increasing prices. As the Triangle–and Charlotte–are the hottest markets for iBuyers, which in aggregate are increasing acquisitions dramatically compared to a year ago, which could be increasing the competition for available, affordable homes at or near the median sale price.
Competing in the Triangle housing market also requires something else: speed.
A prior Redfin study found that the supply of homes available for purchase in the Triangle is among the lowest in the nation, with 0.4 months of supply available as of the end of May 2021. For comparison, many real estate agents consider a market at equilibrium, with regard to supply and demand, where there are six months of supply of inventory. Further, the same study found that the Triangle ranked third for the decrease in year-over-year change in the average number of days on market for a house listed on the open market through the multiple listing service, meaning that what homes are available to purchase are also going under contract quickly.
A licensed real estate agent shared an example with WRAL TechWire recently: a modest home in the Lakewood neighborhood of Durham, listed for sale just below $460,000, went under contract in three days and closed in 13 days, with a sale price of $759,500. That’s not a typo. The same agent told WRAL TechWire that a different Triangle property had more than five dozen offers, and yet another went under contract at $60,000 above the list price with $50,000 as a due diligence fee.
“All year we’ve heard stories about homeowners being reluctant to sell because they don’t want to face such a tough market as a buyer,” said Fairweather. “As the housing market cools slightly, we may see more homeowners finally decide to cash out and move. And as the economy continues to reopen and employers clarify their work-from-home policies, more homeowners may decide that a move is in order.”
Nationally, mortgage rates ticked up above 3%, to 3.02%, the first time in 10 weeks rates were above that mark, and the home purchase index from the Mortgage Bankers Association has declined by 11% since the week ending March 24, Redfin found. But any slowing of demand tracked nationally, may not show up in the Triangle, and prices for homes across the region may continue to increase throughout the summer.