North Carolina's real estate market has been growing in recent years due to its beautiful shorelines and mountains, making it a desirable place to live for many people. According to the reports from Redfin and Zillow, the state has seen a significant uptick in home prices. However, there are also signs of slowing, suggesting that the red-hot housing market brought on by COVID is now stabilizing. In this blog post, we will delve into the current state of North Carolina's housing market, what it means for buyers and sellers, and the housing market forecast for 2023.
North Carolina Housing Market Overview
The North Carolina housing market is experiencing what the rest of the country has seen housing-wise, with the red-hot market of the past couple of years experiencing some course-correcting adjustments. According to Redfin, the number of homes sold is down by 15.4 percent year-over-year, and about 23 percent of North Carolina homes sold above asking price in February, a significant decline of 24.6 points compared to this time last year.
Some cities in North Carolina are more competitive than others, though. For example, homes in Wilmington are selling in 29 days on average, while in Asheville, that number jumps to 58 days. Both cities made Bankrate's top five lists of Best Places to Live in North Carolina. According to Zillow, the average North Carolina home value is $300,640, up 10.5% over the past year, and the typical home goes to pending in around 19 days.
As of February, the median sale price for a home in North Carolina was $340,300, up 3.1 percent from the previous year. Despite this increase, it is still below the national median price of $363,000. The sale-to-list ratio is 98.1 percent, indicating that homes typically sell for around 2 percent less than their list price. In February, homes took an average of 52 days to sell, about 9 days longer than in February 2022. Additionally, according to data from ClosingCorp, the average closing costs are 1.1 percent of the home's sale price.
Inventory is another significant factor to consider in the North Carolina housing market. As of February, there was a 2-month supply of inventory, with 35,581 homes for sale. A balanced market typically requires a 5- to a 6-month supply of inventory, indicating that it is currently a seller's market.
North Carolina Housing Market Forecast for 2023
According to Zillow, the North Carolina housing market forecast for 2023 looks promising, but it may not be as favorable as the previous year. Based on the data provided, it appears that most of the regions in North Carolina are expected to experience moderate to strong growth in terms of housing prices from 2023 to 2024.
Some of the regions that are expected to experience the most significant growth in housing prices include Shelby, Henderson, and Rockingham, with projected growth rates ranging from 3.1% to 4.2% between March 2023 and February 2024. Other regions, such as Lumberton and Roanoke Rapids, are also expected to see strong growth during this time frame, with projected growth rates of 1.7% to 2.9% per month.
However, it is important to note that some regions may experience slower growth in housing prices during this period. For instance, Mount Airy is projected to see a slight decline in housing prices, with a growth rate of -0.2% per month, while Charlotte and Durham are expected to see only marginal growth during this time frame, with growth rates ranging from -0.1% to 0.2% per month.
Therefore, North Carolina's housing market is stabilizing after the red-hot housing market brought on by COVID. Although the housing frenzy is slowing down, some cities are still more competitive than others. Home values are predicted to increase in 2023, albeit at a slower pace than in previous years.
Overall, it appears that the North Carolina housing market is expected to remain robust in 2023 and 2024, with most regions experiencing moderate to strong growth in housing prices. However, there may be some regional variations in terms of growth rates. It is still a seller's market due to the low inventory, but the market is expected to remain steady. If you are a seller, it is a good time to sell, and if you are a buyer, it is essential to act quickly to secure your dream home.
Will The North Carolina Housing Market Crash?
We continue to hear rumors of a market crash, but local data does not corroborate this at this time. Even if minor, the monthly figures indicate that the market has begun to cool.
Based on the data provided, it doesn't appear that the North Carolina housing market is in danger of crashing in the near future. While some areas may experience slight declines in home values from 2023 to 2024, many areas are projected to see modest gains. The overall trend for the state is positive, with an average projected increase of 1.4% in home values over the next year.
North Carolina is home to Charlotte, the second-largest financial industry city in the United States after New York. Charlotte is showing no signs of slowing in its quest to be an even more influential financial hub. Charlotte has had substantial growth since the year 2000, despite reasonable delays in the expansion of financial services owing to the 2008 financial crisis. Since 2000, there has been a 47.7% rise in the number of financial industry positions in Charlotte, compared to just an 11.7% increase in the United States as a whole.
In 2023, North Carolina is predicted to remain a top-ranked state and relocation destination. The flood of new inhabitants will increase competition and limit housing availability, making North Carolina real estate even tighter. According to YouGov, the state is the fifth-best place to live. The state ranks second in terms of business climate, seventh in terms of education, and seventh in terms of fiscal stability.
It's important to note that the housing market can be affected by a variety of factors, including economic conditions, job growth, and interest rates. These factors can be difficult to predict, and unexpected events like natural disasters or pandemics can also have an impact. However, based on the current data, there doesn't appear to be any major cause for concern about a housing market crash in North Carolina.
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North Carolina Housing Supply Graph
Data Sources:
- https://www.zillow.com/research/data/
- https://www.zillow.com/nc/home-values/
- https://www.zillow.com/rental-manager/market-trends/nc/
- https://fred.stlouisfed.org/series/ACTLISCOUNC#
- https://www.redfin.com/state/North-Carolina/housing-market
- https://www.rent.com/research/average-rent-price-report/
- https://www.bankrate.com/real-estate/housing-market/north-carolina/
- https://www.propeterra.com/resource-center/charlotte-north-carolina-banking
- https://today.yougov.com/topics/travel/articles-reports/2021/04/13/us-states-ranked-best-worst-according-americans
