Raleigh's housing market currently tilts slightly towards sellers, given the high demand and limited inventory of homes. However, buyers can still find opportunities in the market, especially with the potential for price adjustments and negotiation. As the city continues to evolve and attract new residents, the balance between buyers and sellers may fluctuate, emphasizing the importance of market awareness and strategic decision-making for both parties.
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 Housing Market Doing Currently?
In February 2024, the Raleigh housing market experienced a slight dip in prices, with home prices decreasing by 2.4% compared to the previous year. According to data by Redfin, despite this, the median selling price stood at a respectable $380,000. Notably, homes are spending less time on the market, with the average days on market dropping from 47 days to 24 days, showcasing a swift turnaround in sales. Moreover, there was a slight increase in the number of homes sold, with 386 homes changing hands in February compared to 379 in the same period last year.
How Competitive is the Raleigh Housing Market?
Raleigh is renowned for its competitive housing market, where homes are in high demand. Properties in Raleigh typically sell within 22 days, a rate faster than the national average, reflecting the city's allure to prospective buyers. Furthermore, the market is characterized by multiple offers on many homes, often leading to bidding wars and some buyers even waiving contingencies to secure their desired property. The average sale price hovers around 1% below the listing price, emphasizing the competitiveness among buyers. Additionally, hot homes can command prices up to 1% above the list price and go pending in as little as 5 days, indicating the fervent pace of transactions in the city.
Are There Enough Homes for Sale to Meet Buyer Demand?
Despite the high demand, Raleigh faces challenges in meeting buyer demand due to a limited inventory of available homes. This scarcity is reflected in the sale-to-list price ratio, which remains high at 99.1%, indicating that homes are selling close to their asking prices. However, there has been a concerning increase in homes with price drops, rising to 29.0% year-over-year, suggesting that sellers may be adjusting prices to attract buyers amidst the competitive landscape.
What is the Future Market Outlook for Raleigh?
Looking ahead, Raleigh's housing market is poised for continued growth and resilience. Despite the slight decline in prices, the city's strong economic fundamentals and appealing quality of life are expected to buoy the market. Moreover, the influx of migration and relocation trends indicates sustained interest in Raleigh as a desirable destination for homebuyers. With 26% of homebuyers considering a move out of the city and 74% opting to stay within the metropolitan area, Raleigh continues to attract a diverse pool of prospective residents.
Read About North Carolina Housing Market Forecast
Raleigh Housing Market Forecast for 2024 and 2025
Raleigh's housing market continues to demonstrate resilience and growth, reflecting the broader trends seen across the real estate landscape. According to Zillow, the average home value in Raleigh stands at $434,407, marking a 3.0% increase over the past year, with properties going pending in approximately 19 days.
Understanding Housing Metrics
Breaking down the housing metrics provides insights into the market's current state and trends:
- For sale inventory (February 29, 2024): The number of properties available for purchase at a given time, indicating market supply.
- New listings (February 29, 2024): The count of recently added properties for sale, influencing market dynamics and inventory levels.
- Median sale to list ratio (January 31, 2024): Reflects the relationship between listed and sold prices, indicating negotiation trends.
- Median sale price (January 31, 2024): The midpoint value of homes sold in Raleigh, providing a benchmark for property values.
- Median list price (February 29, 2024): The midpoint value of properties listed for sale, guiding sellers in pricing strategies.
- Percent of sales over/under list price (January 31, 2024): Illustrates market competitiveness and buyer/seller dynamics.
Raleigh's MSA Housing Market Forecast
Looking ahead, the Raleigh Metropolitan Statistical Area (MSA) housing market forecast indicates a positive trajectory. The MSA encompasses Raleigh and surrounding counties, constituting a significant portion of North Carolina's real estate landscape.
MSA Forecast: The forecast for Raleigh's MSA suggests a steady rise in home values and market activity. From a projected 0.4% increase by March 31, 2024, to 1.2% by May 31, 2024, and further growth to 2.4% by February 28, 2025, the outlook signals sustained momentum and investment potential.
Defining Raleigh's MSA and Its Counties
The Raleigh MSA encompasses several counties in North Carolina, including Wake, Durham, and Johnston, among others. This expansive region reflects a diverse mix of urban and suburban landscapes, catering to varying housing preferences and lifestyles.
Market Size: Raleigh's MSA boasts a substantial housing market, characterized by robust demand, diverse inventory, and competitive pricing dynamics. With a growing population and economic opportunities, the region continues to attract homebuyers and investors seeking long-term growth potential.
Are Home Prices Dropping?
As of the latest data available, there is no indication of home prices dropping in Raleigh. On the contrary, the consistent increase in average home value over the past year suggests a stable or upward trajectory. However, real estate markets are subject to fluctuations influenced by various factors such as economic conditions, interest rates, and external events.
The current state of Raleigh's housing market leans towards sellers due to several factors. With low inventory levels and high demand, sellers have the upper hand in negotiations, often leading to multiple offers and bidding wars. Additionally, the short time properties spend on the market before going pending signifies a competitive landscape, further favoring sellers.
Will the Raleigh Housing Market Crash?
While predictions about market crashes are speculative and dependent on numerous variables, there are no immediate indicators suggesting an impending crash in Raleigh's housing market. The region's strong economy, growing population, and steady demand for housing contribute to its resilience against drastic downturns. However, it's essential to monitor market trends and economic indicators for any potential shifts in the future.
Is Now a Good Time to Buy a House in Raleigh?
For prospective buyers, determining the right time to purchase a house involves considering personal circumstances, financial readiness, and market conditions. While Raleigh's current market favors sellers, it doesn't necessarily mean it's a bad time to buy. Low interest rates as compared to last year, although subject to change, may offer favorable financing options. Additionally, working with a knowledgeable real estate agent can help buyers navigate the competitive landscape and identify opportunities that align with their needs and budget.
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