Of all the cities in NC, Raleigh has one of the most promising and popular real estate markets. It is the state's capital, with trendy areas such as Downtown Raleigh attracting all kinds of buyers and renters to the city.
The economy is strong- with excellent jobs, a large student population, and a robust and affordable housing market. There is an excellent balance of single-family homes, apartments and condos, and townhouse properties available- but how have buyers and sellers been getting on so far this year?
As a person looking to invest in property in Raleigh, there are things to consider about recent market shifts and predictions for the future- especially in the current climate where home sales have seen significant changes over the last few years.
Here is a detailed look at the trends and statistics in the city's recent real estate market activity- as well as a summary of the Raleigh housing market forecast and a few other frequently asked questions for prospective investors.
Current Trends in the Raleigh Housing Market
Supply and Demand
Between the great schools, booming business sector, and various affordable housing options, demand remains strong in Raleigh. People are actively looking to move to the city for the opportunities it provides- and they are doing it quickly.
Yes, things are moving slower than before, and houses tend to spend a longer average time on the market than they used to, but they are still selling.
Supply has been up and down- but the monthly inventory is quite far below what is considered ideal for a balanced market. Six months is optimal, and Raleigh currently sits around two and a half.
Median Home Price
The median listing home price for the most recent monthly report in Raleigh is $401,350- a 7.7% decrease year-over-year. It has remained fairly consistent throughout 2023 and has been close to the previous year's figures each month until the last one.
Sale-to-list prices are in a strong position- sitting currently at 99.9%. This is slightly less than the previous year for the same period (by around 7.5%), but it has improved throughout the first half of the year.
One of the biggest changes in Raleigh housing and real estate is the percentage of homes that sell above their list price. In the previous year, this figure was high- reaching almost 80% in May 2022. At its lowest, it dipped to just 16.2%- a 44.2% decrease YOY.
Although the figure has increased to 33.9% of homes selling above list price in April 2023, the year-over-year difference is even greater- sitting at 45.4% less than last year in the same month.
Time on the Market
In line with the rest of the country, Raleigh has seen a slowdown in moving property- with more homes spending more time on the market.
Here are some year-over-year comparisons for how long it has been taking homes to sell in Raleigh 2023 to Raleigh 2022.
- January 2023: 63 days (28 more than in 2022)
- February 2023: 44 days (11 more than in 2022)
- March 2023: 41 days (19 more than in 2022)
- April 2023: 39 days (18 more than in 2022)
In response to these longer waits, sellers have been dropping their prices more than in previous years.
- Price drops increased by 20.9% in January 2023 year-over-year.
- Price drops increased by 17.4% in February 2023 year-over-year.
- Price drops increased by 14.2% in March 2023 year-over-year.
- Price drops increased by 5.1% in April 2023 year-over-year.
As you can see by this trend, things are improving from the seller's perspective- possibly because the inventory has dropped and the average waiting times are slowly decreasing.
Sale to List Price Ratio
Houses in Raleigh, NC, sell (on average) for 99.2% of their list price. Despite being slightly lower than the national average, it still bodes well for sellers who are concerned about having to significantly reduce prices in order to secure a sale.
Number of Homes Sold
There have been roughly 1762 homes sold in Raleigh since the beginning of the year at the time of writing- compared to around 2281 for the same period last year. That shows a comparative decrease of 519 homes (roughly 22.75%).
Predictions: The Raleigh Housing Market Forecast
What do the experts have to say about what comes next for the real estate market in Raleigh, and how is it likely to impact someone looking to buy or invest in the city? Let's find out.
How Will Housing Affordability Progress?
It is no secret that interest rates on mortgages have stirred the pot of the US real estate market- and Raleigh is no exception. Although some parts of the city are very affordable, it is worth noting that it is also home to some of the most expensive neighborhoods in North Carolina.
The median home value has already fallen throughout the city to keep the market warm and competitive, but is it enough to offset the affordability worries for the average buyer?
As it stands, Raleigh (parts of it, at least) remains affordable and competitive even while mortgage rates are up, and the prediction is for this to continue. That said, some months have seen minor year-over-year median home price increases.
What Way Is the Market Balance Expected to Swing?
Raleigh is considered a seller's market because the demand outweighs the supply, but the balance is more neutral than in many major cities. At one point early this year, newly approved housing permits in the city were at a decade-long high- stirring beliefs that the buyers could soon take over.
However, these numbers have dropped significantly- slowing the build of inventory. It seems people are wary of buying land while mortgage investment rates are so high- but that could change if the numbers drop (which some experts predict will happen soon).
Overall, the Raleigh market forecast predicts a seller's market for the foreseeable future- but not one that is dangerously imbalanced.
What Are the Growth Expectations?
In general, the Raleigh market for housing and real estate is expected to stay in a similar position to the one it is in now moving through 2024. The overall belief is that the growth may decrease and increase from 1-2% down and up- which is unlikely to have a major impact on a small investor.
Is a Raleigh Housing Market Crash Likely?
Put simply, a housing market crash is not something experts believe Raleigh needs to worry about. The economy is strong, people continue moving to the city for job opportunities, and the inventory is not in as bad a position as other major cities.
Although it sways towards a seller's market, Raleigh is competitive on both sides- with most homes selling close to list price (which has reduced on average somewhat year-over-year) and moving fairly quickly (although slower than before).
There does not appear to be a housing bubble- or any likelihood that one is forming. Anything can happen, given the economic standing of the world today, but it is not something potential investors need to be overly concerned about right now.
Predictions for the US Housing Market in General
Across the US, the median home price is expected to drop in response to rising mortgage rates, but a lack of inventory at the national level could cause sellers to raise prices due to competition. In the areas where inventory is not such as issue, home prices are very likely to drop. It is believed that action may be taken to combat the lack of housing supply, so it will be interesting to see how that plays out.
More people are taking longer to explore for better deals, which is part of the reason why properties are spending much longer on the market. This is something else that experts predict to continue around the US as long as mortgage rates remain as high as they are now.
In short, Raleigh remains a stable and robust housing market with plenty of affordable options and several popular neighborhoods helping to keep things moving with multiple offers for buyer competition.
Similar trends have appeared in the city as in many other parts of the country- with higher mortgage rates holding buyers back and causing sellers to reduce their asking prices. Another clear result of changes in the national economy is the extended length of time homes in Raleigh are taking to sell- but the pace is still reasonable enough to have confidence in the market.
Frequently Asked Questions
Here are a few frequently asked questions regarding the housing market in Raleigh, North Carolina.
What factors impact the Raleigh housing market?
Raleigh's job market is one of the main drivers of housing trends. It has an impressively stable economy with a low unemployment rate and many job opportunities- making it a popular city for people looking to rent or invest in rental properties.
Like most of the US, higher mortgage rates have had an impact on the real estate market in Raleigh- knocking a few thousand dollars off of the average home price and extending market stays for most sellers. Luckily, Raleigh's market has remained fairly robust and stable throughout recent times.
Other impacting factors include the growth in the technology industry in the city, a drop in approved housing permits, and inventory levels sitting quite a bit below the optimal supply.
How does the Raleigh market compare to nearby cities in North Carolina?
The Raleigh real estate market is a little more competitive than nearby cities such as Durham and Cary. Property tends to move slightly faster- with an average of 39 days compared to 47 in Durham and 64 in Cary- although Cary has significantly higher home values and has seen a speed-up in the market recently.
There is not a major difference in how close to list price homes tend to sell between these three cities- all hovering around the 99% mark, with Durham sitting a little lower than the others.
What is the most affordable neighborhood in Raleigh?
Highland Creek is considered the most affordable area in Raleigh- with a median-priced home costing a little under $400,000 (according to the most recent averages). Very few homes in this area sell for above list price (only 10% on the last monthly report), and the prices have dropped by roughly 6% year-over-year.
On the other end of the scale, North Hills is the most expensive neighborhood- with the average home price exceeding $700,000- even after small decreases compared with the year before.
It is important for potential buyers and real estate investors to appreciate the range of property prices in Raleigh to get the best out of their investments. Although the trends are similar, the dollar figures can be very different.