Buying a home in the Triangle was not the easiest task in 2017. Prices were up more than 8.2 percent through November, and because of low inventory, the amount of time a homebuyer had to close on a deal was miniscule. Across the region, the average time a house sat on the market through November was down to 44 days, a 10.2 percent decrease compared to 2016.
All of this was particularly true for people seeking lower-priced homes. Of the 26 fastest-selling subdivisions in the Triangle, all but two had average home prices below their respective countywide averages, according to an analysis by Bo Bromhal of Fonville Morisey Realty.
Some residential real estate agents don’t see this trend changing much in the New Year. New residential construction will continue to come on line, but it won’t come close to satiating the market. “The builders are still struggling to keep up with demand,” says Linda Craft, chief executive of Craft Residential in Raleigh.
Residential construction continues to trend upward, but is nowhere near pre-recession totals. In the third quarter of 2007, the number of new homes under construction was just below 16,000, according to Metrostudy data. By mid-2009, that number had plummeted to below 5,000. Through the third quarter of 2017, the Raleigh-Durham market was up to nearly 12,000, representing a significant recovery, but nowhere near previous highs.
At the same time, job and population growth continue to increase, and continued upward pressures on prices will likely push first-time and lower-end buyers to look farther afield for a place to call home. That will mean places such as Johnston, Franklin and Granville counties, and the outskirts of Wake County, could see more action.
All that said, the residential real estate market remains strong, observers say, in terms of overall economic growth and sustained demand. “The lead of everything is the economy and as we keep growing the economy and people keep moving here, those are all customers,” says Stacey Anfindsen, author of the Triangle Area Residential Realty, or TARR, report and appraiser at Birch Appraisal Group in Cary.
Construction activity and demand in post-hurricane areas will likely drive up the cost of materials and labor elsewhere, Anfindsen says. Coupled with the rising cost of land, the end result could be that prices of new homes in the Triangle will increase even more above the price of resale homes.
On a positive note, Anfindsen says that many of the new jobs being added in the Triangle, in industries such as tech and life sciences, have higher-than-average salaries.
Zooming out even further, the Triangle’s housing market remains in a relatively good place when compared to other growing metropolitans. According to one real estate consulting group, Raleigh’s market is still in healthy recovery mode.