RALEIGH – In the decade between 2011 and 2021, Raleigh homes gained an average of 8.5 percent in value annually, according to a new analysis by the National Association of REALTORS® (NAR).
That’s 16th in the nation, among more than 900 metropolitan statistical areas analyzed by the NAR.
According to the data set, a home bought in the fourth quarter of 2011 would have gained 126.1 percent of value in the decade, which ended in the fourth quarter of 2021.
Part of that gain was fueled by an incredibly competitive real estate market in the region, as the Raleigh area was found to have added some $50 billion in home value in 2021 alone in a recent Zillow analysis.
Homes that come available on the open market, across the region and at every price point, are now seeing bidding wars due to a housing shortage exacerbated by low inventory of homes for sale.
Nationally, the NAR report notes that throughout the prior 30 years, single-family existing-home sales prices have increased at an annual pace of 4.3 percent. But as of 2021 Q4, the national average saw home prices accelerate at a faster annual pace of 8.3% in the prior 10 years, the NAR found.
“Due to strong price growth, homeowners are reaping large wealth gains from homeownership,” the report reads. “As of 2021 Q4, at the national level, a homeowner who purchased a typical single-family existing-home 10 years ago at the median sales price of $162,600 is likely to have accumulated $229,400 in housing wealth, of which 86 percent came from price appreciation.”
Raleigh is adding middle-income households
And Raleigh also ranks among the top 20 metropolitan regions in the country for the increase in the number of middle-income homeowner households between 2010 and 2020, according to a National Association of REALTORS® analysis of data from the U.S. Census Bureau.
That analysis found that Raleigh added 22,611 middle-income homeowner households in the decade between 2010 and 2020, ranking 18th in the nation.
In total, the National Association of REALTORS® found that that correlated to a change in aggregate household wealth of $16.6 billion in the region, during the decade.
While median income rose by 6.1 percent during the decade, the typical price change of a median income household’s primary residence rose by 51.9 percent in that time period, according to the analysis.
Housing remains in high demand in the Triangle
More homeowners across North Carolina are now considered “equity-rich” than ever before, an ATTOM Data Solutions report found earlier this year.
And the pace, speed, and price of the Triangle’s housing market continues to astound would-be homeowners. One first-time homebuyer who spoke with WRAL TechWire about their experience navigating the Triangle’s housing market on the condition of anonymity described the current state of the market as “absolutely insane.”
The executive director of Triangle Multiple Listing Service (TMLS), Matt Fowler, told WRAL TechWire in February that an index that tracks housing affordability across the Triangle reached an all-time low in January 2022.
“With inventory at an all-time low, affordable housing units are simply not present in the marketplace,” said Fowler in that February 2022 interview.
A challenging environment
That prospective buyer also told WRAL TechWire that they’re anticipating they’ll have to move soon, even if they’re unable to find an affordable house to purchase. That’s because they’re anticipating an increase in their monthly rent that could price them out of being able to afford to remain in their existing residence.
And with mortgage rates on the rise again, after a temporary dip due to the geopolitical conflict in Ukraine, first-time homebuyers may be losing purchasing power, Redfin’s economists concluded in a February analysis of Raleigh’s housing market.
Data analyzed by WRAL TechWire this week found that more than half of all homes sold in 2022, through Tuesday, sold for more than the list price of the property.
“Unfortunately, as home prices have become less affordable, the distribution of housing wealth has worsened in the past decade, with low- and middle-income households sharing less of the housing wealth pie,” said the National Association of REALTORS® in their report. “Of the $8.2 trillion in housing wealth accumulated from 2010 through 2020, high-income homeowners accounted for $5.8 trillion, or 71 percent of the wealth accumulation.”