The spring housing market is back in full swing across the entire Raleigh-Durham area. Despite the rise of interest rates early in the year, which led to a cooling of the real estate market, the Triangle area is proving that it’s a place people want to be. The TriangleMLS report for March 2023 shows that the market is headed in a good direction as normalcy returns. In fact, our CEO Jim Allen says, “We could not be in a better market in the Triangle than we’re in.”
The following 4 updates show where the market has already been for the year, and why that means things are good for the rest of 2023.
The median price of homes is stabilizing
Gone are the days of the massive spikes in home prices buyers experienced during the pandemic. Around spring of 2022, median sales prices rose, at their highest, by around 24 percent. In March of 2022, the median sales price was $394,900. Compare that to March of 2023, when the median sales price was $387,000.
While that price reduction may not bring a massive amount of relief to potential buyers, it does show that things are getting a bit more affordable across the Triangle. The good news is the spikes are gone, and that means prices will remain steady for the coming months. What’s more, state and national programs that provide down payment assistance are available for first time homebuyers, making homeownership more feasible for Triangle residents.
Mortgage rates are returning to normal
One of the things that quickly started cooling the housing market was interest rate hikes from the Federal Reserve. Mortgage rates were creeping up close to 7 percent, which made many buyers nervous about purchasing a new home. However, it’s important to note that the lower rates seen during the pandemic were unprecedented. Even today’s rates are still lower than the historic national average of 7.75 percent. In fact, Allen said, “We averaged over 8 percent for the 40 years I’ve sold real estate.” As rates of 5 to 7 percent are considered normal, national real estate experts are predicting that rates will remain at the lower end of this range at the end of year and into 2024.
Typically, as rates begin to lower, banks will notify buyers of this trend. It’s always possible to refinance and Forbes reports that refinance applications increased in April as mortgage rates reduced slightly. In other words, buyers will still have an opportunity to take advantage of these historically lower rates before the end of the year.
More homes are needed to meet demands
The inventory of homes has increased in 2023, due in large part to construction projects that are springing up around the Triangle. What’s more, the areas considered within the Triangle MLS system have expanded to include locations like Fayetteville, Southern Pines, and Burlington. Therefore, while it seems like a lot more homes that are available to buyers, it’s still going to take more inventory to get back to a healthy market.
In other words, while the market is stabilizing, there is still a gap that exists before there are enough homes for buyers across the entire Triangle region. While construction of new homes may help with some of those numbers, new listings are still down from where they need to be, and the market needs fresh options before it can fully begin to recoup from the COVID-19 pandemic.
Competition is less stiff, but only slightly
With more homes on the market, buyers are now able to spend more time looking at homes that are available on the market. In fact, TriangleMLS reports that homes are starting to sell below asking price. But don’t let that information get you too confident; it’s still going to take some work.
“We are in an extremely strong seller’s market still here in the Triangle,” Allen said. “Every resale listing is selling almost immediately and they’re still selling for over asking price if they’re in good condition.”
While more inventory, lower rates, more programs, and stabilized asking prices may get buyers back in the mood to purchase, there is still stiff competition from those who couldn’t get into the market during the pandemic. Be sure to get pre-approved from a trusted local lender like North State Bank or Towne Mortgage of the Carolinas to get your best chance of approval for the home you’ve been waiting for.
It’s still a great time to buy in the Triangle. As the market continues to find normalcy across Raleigh-Durham, this spring might just be the best time for you to find a home you love. Stay optimistic, get pre-approved, and be sure to find a real estate agent that knows the Triangle market well to increase your chances of finding the right home.
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