Six years ago America was coming out of the greatest recession it had ever known and homes were selling at record lows in cities across the country. While Raleigh’s home prices never dipped to rock bottom levels, like what was seen in Detroit, there was still plenty of inventory to be had where buyers could purchase a decent size home for just under $200,000. Since that time the market has changed in ways that no one could predict. The average list and sales price has jumped so drastically that many buyers have now found themselves on the outside looking in.
The TARR Report is a publication frequently used by agents, brokers, and appraisers to track residential data across markets around the Triangle. In the most recent Wake County Market Indicators section of the report it list the average list price ($485,987) and sales price ($327,101) in Wake County. The change in prices can be attributed to the low inventory in the market which forces multiple buyers to submit offers and subsequently causing the price of the home to rise in an attempt to be the winning bid.
Sellers are also more confident with going on the market to sell their home. Because they know that not many of their neighbors are either listing their home for sale or, for the ones that do, they’re off the market within days (sometimes hours) it places them in the position where they don’t have much competition. As a result, sellers are taking their chances at listing their home for more.
Currently, Wake County’s home appreciation is at 6.5% and is outperforming the national average of 6.1%. But Wake County’s neighbor to the west, Durham, has a home appreciation of 15% which is more in line with what cities on the west coast are experiencing.
What does this mean for first time home buyers who are just starting to enter the market? Well, the news isn’t great if they want to live inside the city limits. Most first time home buyers, with the exception of those who have the means to purchase in the price point of $300,000 or more, are finding themselves having to live outside the city in neighboring towns that are growing fast as a result of the spill over of buyers who can’t afford to live inside Raleigh.
However, the good news is those same towns are becoming new prime locations where people want to live simply because of housing affordability. But real estate is based on the basic rules of supply and demand. As more buyers continue to try and enter into towns like Garner, Knightdale, and Wendell list prices and sales prices will go up. So, the best way for buyers to win in this environment is to be pre-approved, be financially prepared, and be ready to make an offer. You may not get your dream home this first go round but if the market continues to go in the direction it’s headed you’ll certainly have the resources to afford the next.