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 some reports, 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 starting to slow down in 2023, after a period of rapid growth in 2022. Home prices are still rising, but at a slower pace. The number of homes for sale is increasing, and homes are spending more time on the market.
According to NC Realtors' latest market report, the median sales price for a home in North Carolina was $302,549 in April 2023, an annual increase of 4.4%. However, the number of homes sold decreased by 16% year over year. The median days on the market increased by 10 days compared to the previous year, reaching a total of 36 days.
Experts predict that the North Carolina housing market will continue to slow down in 2023. Home prices are expected to rise by 2-3%, but the number of homes for sale will continue to increase. This will lead to more competitive bidding wars and longer days on the market.
Housing Market Trends in June
According to Redfin, the median sale price of homes is a significant indicator of the health and affordability of a housing market. In June 2023, the median home price in North Carolina was $377,100, marking a 3.2% increase compared to the previous year. This figure provides valuable insight into the direction and pace of the housing market's growth. The steady increase in median home prices indicates the market's strength and the evolving affordability landscape.
Fastest Growing Sales Price: Top 10 Metros
Certain metros within North Carolina have seen remarkable growth in their sales prices. The top 10 metros with the fastest-growing sales prices include Holly Ridge, Hope Mills, Wilson, and more. Holly Ridge leads the pack with an impressive 38.6% increase in sales price, highlighting the burgeoning demand for homes in these areas. This growth suggests a favorable market for sellers and potentially competitive conditions for buyers.
Housing Supply and Demand: Striking a Balance
The balance between housing supply and demand plays a crucial role in shaping market dynamics. In June 2023, North Carolina had 40,709 homes for sale, representing an 11.5% decrease compared to the previous year. The number of newly listed homes also declined by 27.4% year over year. These figures contribute to an average monthly of supply of 2 months, indicating that the market favors sellers. A low supply of homes can lead to increased competition and potentially higher prices, impacting the overall dynamics of the market.
Competitiveness in the Market
The competitiveness of the housing market can be assessed by analyzing various factors such as homes selling below list price, price drops, and sale-to-list price ratios. In June 2023, 35.1% of homes in North Carolina were sold below list price, down from the previous year. A higher percentage of homes with price drops was also observed. These changes in competitiveness provide valuable insights into the negotiation dynamics between buyers and sellers.
Migration Trends: Where Are People Moving?
Understanding migration trends is crucial for gauging the popularity of certain regions and metros. Nationwide data from May to July 2023 revealed that 26% of homebuyers were searching to move to a different metro area. Among the top states searched as destinations were Florida, Texas, South Carolina, North Carolina, and Tennessee. This suggests that North Carolina remains an attractive destination for those seeking a change of scenery.
Top 10 Areas People Are Moving To and From
In terms of inbound migration, Las Vegas, Sacramento, Orlando, and other metros were highly sought-after destinations. On the other hand, San Francisco, New York, Los Angeles, and others experienced a significant outbound migration. This data provides insights into the popularity of certain cities and areas, shedding light on the shifting preferences of homebuyers.
North Carolina Housing Market Forecast for 2023-2024
According to Zillow, as of July 31, 2023, the North Carolina housing market continues to show resilience and promise, with a consistent trend of growth and robust demand. The average home value in the state stands at $320,922, marking a solid 2.6% increase over the past year. With homes going pending in just around 8 days, North Carolina's real estate sector presents a compelling landscape for both buyers and sellers.
Economic and Lifestyle Factors
The North Carolina housing market's positive trajectory is a reflection of the state's vibrant economy, diverse job opportunities, and attractive lifestyle offerings. The combination of urban centers, scenic landscapes, and a favorable cost of living has drawn in both residents seeking long-term settlements and investors looking for lucrative opportunities.
Balanced Market Dynamics
The housing market in North Carolina showcases a balanced blend of supply and demand, as evident from the 41.8% percent of sales over list price and the 41.0% percent of sales under list price, both as of June 30, 2023. This equilibrium allows for a diverse range of properties catering to various budget constraints, providing opportunities for both first-time homebuyers and seasoned investors.
Swift Transactions and Seller's Advantage
The median sale-to-list ratio of 1.000, as of June 30, 2023, indicates that homes are being sold close to their list price, highlighting the benefit for sellers. The median time to pending at just 8 days as of July 31, 2023, underscores the strong demand and the efficiency of the real estate process in North Carolina.
MSA Growth Prospects
The North Carolina MSA (Metropolitan Statistical Area) housing market forecast suggests several promising regions where home prices are anticipated to rise significantly by 2024. Among these are Lumberton, Kinston, North Wilkesboro, Boone, Brevard, Albemarle, Forest City, Shelby, Cullowhee, and Sanford. These areas are expected to experience varying degrees of growth, ranging from 9.4% to 11.1% by July 2024, according to the forecast data.
Investment and Buyer Considerations
For real estate investors, North Carolina presents a landscape of opportunities. The projected growth in multiple MSAs indicates the potential for substantial returns on investment over the coming years. Buyers, on the other hand, can take advantage of the relatively diverse and affordable housing options available across the state.
Will The North Carolina Housing Market Crash?
The question of whether the North Carolina housing market will crash is a significant concern for both current homeowners and potential buyers. While predicting the future of any market, including real estate, is inherently challenging, it's important to examine the underlying factors that contribute to the market's stability and assess the likelihood of a crash. As of now, there is no conclusive evidence suggesting an imminent housing market crash in North Carolina.
Market Fundamentals
Several key factors contribute to the current stability of the North Carolina housing market:
- Economic Strength: North Carolina boasts a diverse and growing economy. Major industries such as technology, healthcare, finance, and manufacturing have a strong presence in the state. This economic diversity provides a solid foundation for sustained housing demand.
- Population Growth: The state continues to attract a steady stream of newcomers due to its job opportunities, quality of life, and relatively affordable cost of living compared to other desirable areas. This population growth supports housing demand.
- Supply and Demand Balance: While some areas may experience housing shortages, the overall supply and demand balance in North Carolina remains relatively stable. This equilibrium helps prevent dramatic price fluctuations that could trigger a crash.
Housing Market Trends
Current trends in the North Carolina housing market further suggest stability:
- Gradual Price Appreciation: The average home value increase of 2.6% over the past year (as of July 31, 2023) reflects a gradual and manageable appreciation rate. Rapid price surges are often indicative of a potential bubble, but the modest increase in North Carolina's home values aligns with healthy market growth.
- Quick Time to Pending: Homes going pending in around 8 days (as of July 31, 2023) indicates strong demand and a competitive market, which can help maintain stability.
- Balanced Metrics: The balance between homes sold over list price and those sold under list price (41.8% and 41.0% respectively, as of June 30, 2023) signifies a diverse range of properties that cater to various budget constraints.
As of the present data, the North Carolina housing market does not show imminent signs of crashing. The state's robust economy, population growth, and balanced supply-demand dynamics contribute to its stability. However, any market can experience changes over time, and vigilance is crucial. By staying informed and seeking advice from experts, homeowners and buyers can navigate the North Carolina housing market with confidence.
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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
