If you are keen to know about the latest trends in the Raleigh housing market, you must read till the end. 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. In this blog post, we will look at the current housing market trends in Raleigh, including house prices and forecasts.
Raleigh Housing Market: A Close Look at House Prices & Trends
The Raleigh housing market is characterized by competitiveness, steady price growth, and a balanced sale-to-list price ratio. Prospective buyers and sellers should keep a close eye on the trends and make informed decisions based on the dynamic nature of this market. Let's delve into the numbers and trends that define this vibrant market.
According to data by Redfin, the Raleigh housing market witnesses an average of 3 offers per home and an approximate selling time of 35 days. In the past year, the median sale price of homes increased by 2.6%, reaching $414K. The price per square foot has also seen an upsurge of 1.3% since last year, now standing at $231.
As of August 2023, home prices in Raleigh have risen by 2.6% compared to the previous year, boasting a median price of $414K. Homes tend to stay on the market for about 35 days, slightly more than the 33 days observed last year. In August, 518 homes were sold, a decrease from 649 during the same period last year.
Raleigh's median sale price is 3% lower than the national average, making it an attractive option for prospective buyers. Moreover, the overall cost of living in Raleigh is 2% lower than the national average. Let's explore how Raleigh's competitiveness stacks up against neighboring cities.
Raleigh is considered somewhat competitive in the real estate market, with an average selling time of 35 days. Some homes receive multiple offers, and hot properties can sell for about 3% above the list price, typically going pending in around 13 days.
When compared to nearby cities, Raleigh remains competitive, with homes selling for about 1% above list price and going pending in approximately 35 days. Hot homes in these areas can sell for about 5% above list price and usually go pending in around 17 days.
Sale-to-List Price Ratio
The sale-to-list price ratio for all home types in Raleigh stood at 99.8%. This indicates the homes are generally being sold very close to the listed price, showcasing stability and reliability in the market.
Raleigh Migration & Relocation Trends
Across the nation, 0.91% of homebuyers have been searching to move into Raleigh from outside metros. Fayetteville, Washington, and San Francisco are among the top metros from where homebuyers are eyeing a move to Raleigh. On the flip side, Raleigh residents are also exploring other destinations.
Raleigh Housing Market Forecast 2023-2024
Analyzing real estate data from multiple sources gives us a much broader perspective of the direction in which a market is moving. We shall now discuss some of the most recent housing trends in the Raleigh area from Zillow and compare them with the past year. Based on the available data and forecast, the Raleigh housing market is expected to continue its upward trend into 2023-2024, although perhaps at a slightly slower pace than in previous years.
The Raleigh housing market, according to Zillow, provides valuable insights for potential buyers and sellers. Understanding the current trends and forecasts is essential in making informed real estate decisions.
The average home value in Raleigh is currently estimated at $434,459. This reflects a 2.0% decrease over the past year. Homes in Raleigh typically go pending in a remarkably short time, approximately 7 days, emphasizing the market's brisk pace. These figures are based on data up to August 31, 2023.
Key Market Indicators
- Median Sale to List Ratio (July 31, 2023): 1.000
- Percent of Sales Over List Price (July 31, 2023): 48.2%
- Percent of Sales Under List Price (July 31, 2023): 37.9%
- Median Days to Pending (August 31, 2023): 7
Raleigh MSA Housing Market Forecast
For those keen on understanding the trajectory of the housing market in the Raleigh Metropolitan Statistical Area (MSA), reviewing the forecasted data is critical. The figures provide a glimpse into what the future might hold for potential buyers and sellers.
The data for the Raleigh MSA is as follows:
Base Date: August 31, 2023
- 30-09-2023: 0.3%
- 30-11-2023: 1.1%
- 31-08-2024: 5.8%
While these numbers offer some insights, it's important to note that the real estate market is dynamic and influenced by numerous factors. Future trends may vary from these predictions, and it's advisable to stay updated with the latest forecasts.
Will Home Prices Drop in Raleigh, NC?
Predicting precise changes in home prices is a complex task. The slight increase in the forecast for the upcoming months suggests that a significant drop in prices is not anticipated. However, market conditions can change, and it's prudent to monitor updates from reliable sources to make informed decisions.
Is Now a Good Time to Buy a House in Raleigh, NC?
Whether it's an opportune time to buy a house in Raleigh depends on individual circumstances, financial stability, and long-term goals. Analyzing the market forecast and consulting with real estate experts can provide valuable insights. Additionally, keeping an eye on interest rates and the overall economic situation is essential in making a well-informed decision.
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 2022. 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.
Maybe you have done a bit of real estate investing in Raleigh but want to take things further and make it into more than a hobby on the side. It’s only wise to think about how you can and should be investing your money. In any property investment, cash flow is gold. The strong US real estate market shows no signs of slowing and is slated to remain among the world’s top performers. Whether you are a Baby Boomer or a Millennial, you will find living in Raleigh is a unique experience. From being a leader in the job market to being a hub for entertainment, it’s pretty clear why many people love to call Raleigh home.
A good cash flow from Raleigh rental property means the investment is, needless to say, profitable. A bad cash flow, on the other hand, means you won’t have money on hand to repay your debt. Therefore, finding a good Raleigh real estate investment opportunity would be a key to your success. If you invest wisely in Raleigh real estate, you could secure your future. If you are a beginner in the business of cash flow real estate investing, it is very important to read good books on real estate.
The less expensive the Raleigh investment property is, the lower your ongoing expenses will be. Some of the most popular neighborhoods in Raleigh are Downtown Raleigh, Southwest Raleigh, Wake Forest, West Cary, Oakwood, Forestville, Stonehenge, North Hills, Northeast Raleigh, Lochmere, Fayetteville Street District, North Raleigh, Five Points East, Northwest Raleigh, and Brier Creek.
Apart from the Raleigh market, you can go to Tucson, AZ. The Tucson housing market has recovered and is poised for slow, steady, and certain long-term growth. The shifting demographics and known groups eager to sell at the right price provide an excellent opportunity to find bargains almost anywhere in the Tucson real estate market. Tucson consists of 583 neighborhoods. Many people move to Tucson and then commute to work in surrounding cities.
Tucson’s relatively slow and steady growth rate means that new construction is at a crawl. That is causing rents to rise faster than average, especially at the low end of the market. Another factor propping up home prices is the relatively small inventory on the market; snowbirds typically sell when they need to instead of based on market conditions.
Another market that we suggest is Dayton, Ohio. The Dayton Ohio real estate market is one of the best deals in the Midwest. It balances affordable properties with strong future growth, a large rental market and stable property values, low carrying costs, and decent ROI. The average home size is roughly 1,350 square feet. Downtown Dayton and its suburbs are doing a nice job of incentivizing new businesses to come into the area. Existing businesses are also benefiting from positive housing market trends in Dayton. While the overall Dayton housing market is booming, downtown Dayton has struggled with crime from time to time. The good news is that the city has steadily reduced crime.
Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. Choosing a real estate professional/counselor continues to be a vital part of this process. They are well-informed about critical factors that affect your specific market areas, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing, and interest rates.
NORADA REAL ESTATE INVESTMENTS strives to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in the U.S. growth markets. We can help you succeed by minimizing risk and maximizing profitability. Consult with one of the investment counselors who can help build you a custom portfolio of turnkey cash-flow rental properties in the various growth markets across the United States.
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Remember, caveat emptor still applies when buying a property anywhere. The information contained in this article was pulled from third-party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
Market Trends And Forecast
Universities and demographics
Higher average income