The Triangle housing market has never seen this kind of activity before. The closest resemblance was during the housing boom of 2003 – 2006. But the market has evolved and buyers are pouring in from unexpected places such as San Francisco, New York City, and yes, even Florida! The population growth is not the only staggering observation, the average sales price, average list price, and the real estate appreciation over one year, in Raleigh, NC., has also caught the attention of buyers, sellers, and all other on lookers around town. Here is a market snapshot of what’s going on in today’s housing market.
Average List Price
The Average List Price (ALP) in Wake County is currently $491,623. This is a 5.19% change over last year’s ALP. Due to high demand sellers have become more confident in the notion that they could get more for their home. In fact, unlike three years ago, appraisals don’t seem to be play much of a role in how buyers are deciding to purchase. In many cases, buyers are entering multiple offer situations making bids that they know will be over the appraised value. But that’s not stopping them. At the end of the day, cash is king and if a buyer has the money to cover the difference between the appraised value and purchase price that’s usually enough for them to secure the deal.
Average Sales Price
The Average Sales Price (ASP) in Wake County is currently $332,151. This is a 9.28% change over last year’s ASP. Because many homes are selling for over list price it has started to push the rest of the market up in price as well. Due to sites such as UrhousSearch.com homeowners are easily able to see what their neighbor down the street sold their home for and use it as a potential comparable to get an idea of the price of their home. Many have said that the Triangle market is creating an unsustainable bubble that will eventually burst. But the demographic of the buyers tell a different story. Back in the early 2000’s buyers of all economic status were, essentially, able to walk into a bank and get a loan, regardless of proof of income or credit worthiness. This irresponsible behavior eventually led to what we now call the Great Recession. Today, it is far more difficult to get approved for a loan and borrowers need to be able to prove that they have the credit and income before they are even pre-approved for a loan (Pre-approval is not the same as being pre-qualified. Be sure to ask your lender about the difference.)
We are only half way through the year and Wake County alone has already seen a housing appreciation of 4.8%. This will continue to rise through out the rest of the year as more newcomers enter the market from out of state and as more Millennials continue to buy.
Ultimately, there may be some characteristics of a bubble brewing in the Triangle market, but it appears more like an evolution of the market. Buyer demographics and job markets often times dictate where a market is headed and with the Triangle having such a diverse economic infrastructure and strong tech presence it appears that we’re actually heading for a new normal.