Raleigh Housing Market Trends and Forecast for 2024
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Considering the current market dynamics, the Raleigh housing market appears to be in a transitional phase. The decrease in home prices and the increase in the number of homes with price drops suggest a potential shift towards a buyer’s market. However, the continued competitiveness and multiple offers on some homes indicate that sellers still hold a significant position in the market.
Raleigh Housing Market Trends in 2024
Raleigh, North Carolina is a southeastern city often overshadowed by the larger Charlotte market. Raleigh, the capital city of North Carolina, is a popular destination among homebuyers due to its booming economy, excellent educational institutions, and affordable housing market.
The city is home to a large number of technology companies, including IBM, Cisco Systems, and Lenovo, making it a hub for innovation and entrepreneurship. With this growth in technology comes the need for more housing, which has led to an increase in demand for homes in Raleigh.
How is the Raleigh Housing Market Doing Currently?
According to data by Redfin, in January 2024, the Raleigh housing market experienced a slight dip in home prices, down by 1.9% compared to the previous year. The median price for homes in Raleigh was $383K, showcasing a shift in the market dynamics. On average, homes in Raleigh are now selling faster, spending only 35 days on the market compared to 63 days the previous year. Despite the decrease in the number of homes sold, with 296 sales in January this year compared to 315 last year, the market remains active.
Raleigh Housing Market Competitiveness and Dynamics
Raleigh’s median sale price, currently at $383K, is 5% lower than the national average. The market is somewhat competitive, with homes selling in just 34 days on average. Some homes even receive multiple offers, indicating a heightened level of competition among buyers. The average homes sell for about 2% below the list price and go pending in around 34 days. Hot homes, on the other hand, can sell for around the list price and go pending in approximately 12 days.
Sale-to-List Price and Other Metrics
The sale-to-list price ratio is at 97.8%, showing a year-over-year increase of 0.9 percentage points. Additionally, 19.3% of homes are sold above the list price, reflecting a 2.7 percentage point increase from the previous year. However, it’s essential to note that there has been a significant rise in homes with price drops, reaching 67.8%, indicating a 38.2 percentage point increase year-over-year.
Are There Enough Homes for Sale in Raleigh to Meet Buyer Demand?
The Raleigh housing market presents a mixed scenario in terms of supply and demand. While the average time a home spends on the market has decreased, there is a notable increase in the percentage of homes with price drops. This suggests that while there might be buyer demand, the market is also experiencing challenges, leading to adjustments in pricing.
Between November ’23 and January ’24, 27% of Raleigh homebuyers expressed a desire to move out of the city, while the majority, 73%, looked to stay within the metropolitan area. Migration trends from across the nation show that 0.87% of homebuyers searched to move into Raleigh from outside metros. Washington homebuyers topped the list, followed by New York and San Francisco, indicating a diverse influx of new residents into the Raleigh housing market.
Read About North Carolina Housing Market Forecast
Raleigh Housing Market Forecast for 2024 and 2025
According to Zillow, the average home value in Raleigh stands at $427,565, reflecting a 2.3% increase over the past year. Notably, homes in Raleigh go pending in a mere 22 days, indicating a swift and competitive market. Let’s delve into the key housing metrics to gain a deeper understanding of Raleigh’s real estate dynamics.
For Sale Inventory (January 31, 2024):
The inventory of homes available for sale as of January 31, 2024, is 997. This figure provides insights into the overall supply of homes on the market, influencing pricing and buyer options.
New Listings (January 31, 2024):
In January 2024, Raleigh witnessed 344 new listings. New listings are crucial as they contribute to the available housing stock, impacting market activity and buyer choices.
Median Sale to List Ratio (December 31, 2023):
The median sale to list ratio as of December 31, 2023, stands at 0.993. This ratio signifies the relationship between the listed price and the actual sale price, offering insights into negotiation dynamics.
Median Sale Price (December 31, 2023):
As of December 31, 2023, the median sale price in Raleigh is $401,333. This metric represents the middle point of all home sale prices, providing a snapshot of the market’s pricing distribution.
Median List Price (January 31, 2024):
The median list price as of January 31, 2024, is $433,333. This figure represents the middle point of all homes currently listed for sale, serving as a reference for potential buyers and sellers.
Percent of Sales Over/Under List Price (December 31, 2023):
Examining sales dynamics, 28.1% of homes in Raleigh were sold over the list price, while 54.9% were sold under the list price as of December 31, 2023. These percentages highlight the competitive nature of the market and the prevalence of negotiation strategies.
Raleigh MSA Housing Market Forecast
Looking ahead, the Raleigh Metropolitan Statistical Area (MSA) housing market is forecasted to experience continued growth. According to the latest projections, as of January 31, 2025, the forecasted growth is 5.8%. This indicates a positive trajectory for the region’s real estate market, suggesting increased demand and value appreciation over time.
The Raleigh Metropolitan Statistical Area (MSA) encompasses various counties in North Carolina. The MSA, including Raleigh, is a statistical designation defined by the U.S. Census Bureau, capturing the economic and social interactions between Raleigh and its surrounding counties. In this context, Raleigh’s MSA includes multiple counties, contributing to the overall size and diversity of the housing market within the region.
Are Home Prices Dropping in Raleigh?
As of the latest data, there is no evidence to suggest a decline in home prices in Raleigh. The median sale price of $401,333 as of December 31, 2023, and the current median list price of $433,333 indicate a market that has maintained or even appreciated in value. However, it’s crucial to stay updated on market trends as they evolve.
Will the Raleigh Housing Market Crash?
As of now, there are no indications of an imminent housing market crash in Raleigh. The steady growth forecast, with a projected increase of 5.8% by January 31, 2025, suggests a resilient market. However, market conditions can change, and it’s advisable to monitor economic factors and real estate trends for a comprehensive understanding of potential risks.
Is Now a Good Time to Buy a House in Raleigh?
Considering Raleigh’s current real estate dynamics, the decision to buy a house depends on individual circumstances. While it is a seller’s market, opportunities exist for well-informed buyers. The forecasted growth and stable pricing indicate a market with potential appreciation. However, buyers should act swiftly, be prepared to compete, and carefully evaluate their financial readiness before making a purchase.
Ultimately, consulting with a local real estate professional can provide personalized insights based on current market conditions and individual goals, helping prospective buyers make informed decisions in this dynamic real estate landscape.
Is Raleigh a Good Place For Real Estate Investment?
Should you invest in Raleigh real estate? If you want to find out whether Raleigh real estate is a good investment or not, you need to drill deeper into local trends. The Raleigh real estate trends will tell what the market holds for the year 2024. We have already discussed the Raleigh housing market forecast for answers on why to put invest in this market. Purchasing an investment property in Raleigh real estate is a little different from shopping for your car or primary residence.
While you still want to get the most for your money, if you are looking to make a profit, you don’t want to buy the most expensive property on the Raleigh real estate market and expect to make a good profit on rents. Perhaps you are looking for a slightly different hold-over, a turnkey investment property in Raleigh that you might move into or sell at retirement in the future! Either way, knowing your profit potential and purpose is the first thing to consider.
According to Neighborhoodscout.com, a real estate data provider, three and four-bedroom single-family detached homes are the most common housing units in Raleigh. Other types of housing that are prevalent in Raleigh include large apartment complexes, duplexes, rowhouses, and homes converted to apartments.
About a third of Americans rent their homes. In the Raleigh NC real estate market, the rate is 43%. This is partially due to the large student market, but it is also fueled by young people moving here for work. That explains why downtown Raleigh rents grew 9% in 2018. It also explains why you can rent out a studio for $900 a month and one-bedroom apartments for a thousand dollars a month.
Kiplinger, a leading publisher of business forecasts and personal finance advice, uses ATTOM Data Services to compile data on home price changes and housing affordability in the country’s top 100 markets. The affordability index indicates a city’s relative affordability (1 is the most affordable, 10 is the least affordable). It is calculated as the percentage of annual income required to purchase a median-priced home in late 2020 in each metro area. Raleigh has an affordability index of six out of ten, making it one of the most expensive cities in the United States to own a home. New York City is the most expensive city, while Augusta, Georgia is the least expensive.
To consider the prospects of investing in the Raleigh NC real estate market, we’ll focus on factors that matter to investors instead of citing the many high quality of life metrics and awards the city receives that draw new residents to the area.
The Student Market
College towns can be a great place to buy investment real estate, but the rise and fall of the flagship campus affect demand for real estate. Any state capital will be home to at least one flagship university. North Carolina State University is located here. However, the Raleigh NC real estate market for those catering to students is diversified, so to speak. Meredith College, St. Augustine’s University, and Shaw University are also located here, as are several other private religious schools.
If you invest in the Raleigh suburbs, you could attract students from Duke University in Durham and the University of North Carolina in Chapel Hill. Young people from across the globe want to experience Raleigh. From attending school at one of the local, prestigious colleges to working in the infamous Research Triangle Park, Raleigh is the new destination for young people who are interested in a fresh start and a great home to live in.
The Growing Technological Employment Base
The Research Triangle Park area consists of Raleigh, Durham, and Chapel Hill. These research centers are generating many high-tech startups and jobs, bringing people to the area for high-paying jobs. Red Hat is one of the biggest employers in the area, despite the school system, and state & local governments being major employers. The high-tech sector helps explain why Raleigh’s income per capita is roughly $33,682 while the national average is $29,829 and far above the $26,779 state average. Raleigh was ranked number one in Glassdoor’s 25 Best Cities for Jobs report.
In April, Apple announced a new campus and engineering hub that will bring many high-paying jobs to the area. The site will be located off the Triangle Expressway between Louis Stephens Drive and Davis Drive. In addition, Apple will invest $100 million to support schools and community initiatives in the Triangle and will put more than $110 million toward infrastructure in 80 North Carolina counties. In total, Apple said it will invest more than $1 billion in the state.
Raleigh’s Diverse Economic Base
Unemployment tends to be lower in areas with diverse economies. Raleigh is home to several major hospitals. It hosts an international airport. The high-tech sector is so large we’ve already mentioned it as a point in favor of the Raleigh NC real estate market. This diverse economic base protects a community from the rise and fall of employment tied to a single market sector. This explains why Raleigh’s unemployment rate was one point lower than the state average in 2018 and was three points lower than the unemployment rate for the state during the Great Recession.
The BLS reported that the unemployment rate for Raleigh fell 0.1 percentage points in July 2021 to 3.7%. For the same month, the metro unemployment rate was 0.7 percentage points lower than the North Carolina rate. The unemployment rate in Raleigh peaked in May 2020 at 12.1% and is now 8.4 percentage points lower. The relative abundance of jobs brings many to the Raleigh area, while it will keep many students graduating from their schools in the area.
Low Overall Taxes
North Carolina’s overall tax burden is roughly 30th out of the 50 states according to WalletHub. Property taxes clock in at an average of 2.3%. That’s 11th in the country but far better than a number of eastern states. Georgia’s property tax rate, for example, is 2.75%, and neighboring South Carolina’s comes in at 2.91%.
It Is Landlord Friendly
North Carolina on the whole is landlord-friendly. There are payment grace period laws, but you can charge late fees. There are no pet laws or rekeying laws in North Carolina. And unlike other states, North Carolina has been becoming more landlord-friendly. For example, a law passed in 2018 allows landlords to recover legal fees and the cost to issue a court summons when they had to go to court to evict a tenant. This isn’t a blank check, though. Recovered legal fees can’t exceed 15% of the amount owed.
Raleigh Real Estate is Relatively Affordable
North Carolina homes cost an average of $180,000. You can buy several investment properties here for the cost of one middle-class home in California or a loft in New York City. The area is so affordable that housing costs score 92 on the cost of the living index while the national average is 100. The median home value of roughly $254,000 (Zillow). NerdWallet had ranked Raleigh one of the best places to own a home. Over 70% of Raleigh’s land is zoned for residential use, which contributes to the city’s affordability of housing relative to Austin, Atlanta, and Charlotte.
The Modest Military Market
Raleigh is almost ideal in this case. The community isn’t the home of Fort Bragg, but that means the community’s real estate market won’t rise and fall based on the fate of a large base. Instead, there are several moderately sized military employers in the area. Raleigh is home to one of 65 MEPS to induct people into the military. Raleigh is home to the North Carolina National Guard, Civil Air Patrol, a US Army Corp of Engineers, and an Army Research Office. An office of the Defense Criminal Investigative Service is located here, as well.
References
Market Trends And Forecast
https://www.zillow.com/raleigh-nc/home-values
https://www.trianglemls.com/tmls/market-trends/
https://www.realtor.com/local/Raleigh_NC
https://www.redfin.com/city/35711/NC/Raleigh/housing-market
http://www.homesinraleigh.org/raleigh-housing-report.html
http://www.metrodepth.com/raleigh-forecast-another-average-year
http://www.freddiemac.com/research/indices/house-price-index.page
Rental Market
www.zumper.com/rent-research/raleigh-nc
www.bestplaces.net/housing/city/north_carolina/raleigh
www.rentcafe.com/average-rent-market-trends/us/nc/raleigh
https://www.apartmentlist.com/renter-life/average-rent-in-raleigh
Universities and demographics
www.en.wikipedia.org/wiki/Raleigh,_North_Carolina
Higher average income
www.areavibes.com/raleigh-nc/employment
Tax rates
www.wallethub.com/edu/states-with-highest-lowest-tax-burden/20494/
Landlord friendly
www.portcitydaily.com/local-news/2018/06/30/heres-how-north-carolinas-new-eviction-fee-law-changes-things-for
Landlords-and-tenants
www.avail.co/education/laws/north-carolina-landlord-tenant-law
Military market
www.mepcom.army.mil/Units/Eastern-Sector/ 12th-Battalion/Raleigh
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