Buying a home in Raleigh is getting tough!
Regardless if you’re a first time homebuyer looking for a cozy (realtor speak for small) 3 bedroom ranch styled home or a veteran move up buyer purchasing your dream home one thing that is consistent across that supply of housing in Raleigh-Cary and all over Wake County is that it’s tight!
In quite a few areas of the Triangle, houses are going under contract within 1-2 days..and most of them have multiple offers. The inventory crunch is shaping up to be the same or worse than last year..homeowners are hesitant to put their homes on the market. As a result, the builders are having a field day; they can’t build them fast enough! – Justin Burleson – Triangle Area Real Estate Broker
In the past week I’ve seen would-be homebuyers disappointed because their offer was rejected due to multiple offers. From prices ranging from $100,000 to $500,000, Wake County homebuyers need to bring their highest and best offer on the first stroke of the pen because supply is tight and sellers don’t need to accept the first offer.
Wake County North Carolina 2014 Real Estate Trends
Each month the Triangle MLS publishes the Wake County Local Market Update and although February data is still being compiled, the numbers from January tells a story of a local housing market that is tight and getting even tighter.
It’s important to note that these are the sales data for closed real estate sales for the month of January 2014 for ALL of Wake County which includes (in order of population) Raleigh, Cary, Apex, Wake Forest, Garner, Holly Springs, Morrisville, Fuquay-Varina, Knightdale, Wendell, Zebulon and Rolesville. It’s also important to note that closed sales represent the buyer’s sentiment and activity during the 45 to 90 days prior to the closing of the sale.
What stands out to me in this report is that both the median and mean sales prices have increased by 3.9 and 6.5 percent respectively to $218,000 and $266,622. While that is good news, it is also a dichotomy because the available inventory of homes has declined by more than 9 percent while the Months’ Supply of Inventory has tumbled by nearly 30 percent. In layman terms this means that if no additional houses were listed for sale in Wake County, at the current sales pace (or rather the Nov/Dec sales rate) the current supply of homes would be exhausted in just 3.6 months.
Although on the surface that sounds great and perhaps it is if you are selling a home, but given that most sellers remain in the market and eventually purchase another home it’s actually very bad. It’s bad because it causes prices to rise faster than wages can keep up with demand and is what spurs lenders to offer riskier mortgages such as interest only and exotic ARM products.
On the other hand, homebuilders love the shortage because they have been holding onto lots that they couldn’t build on because existing homes had been suppressing values.
5 Triangle-area towns named best places to own homes in North Carolina http://t.co/C9bKzwo71Q
— YourGarnerAgent (@ricardocobos) March 10, 2014
If the seller prices the home accordingly to similar sales and actual market value, what I’ve been experiencing is multiple offers which in turn increases the probability of getting higher than asking. Erika Hudson – Raleigh Area Realtor
One thing that can slow down this mini boom in Wake County home prices is a rapid rise in mortgage rates like we saw last Fall. However, with unrest across the globe from Venezuela, the Middle East and Ukraine, it isn’t likely that the Fed is likely to change course anytime soon so for now, Wake County homebuyers should bring their A-game.