North Carolina's real estate market has experienced significant growth in recent years, driven by its stunning shorelines and mountains that make it an attractive place to live. While home prices have been on the rise, there are indications that the red-hot market fueled by COVID is now stabilizing. In this article, we will explore the current state of North Carolina's housing market, its implications for buyers and sellers, and the housing market forecast for 2023.
North Carolina Housing Market Overview
The North Carolina housing market is showing signs of slowing down in 2023, following a period of rapid growth in 2022. Although home prices continue to rise, the pace of increase has slowed down. The number of homes available for sale is increasing, and homes are staying on the market for longer periods.
According to the latest market report from NC Realtors, the median sales price for a home in North Carolina was $302,549 in April 2023, representing a 4.4% annual increase. However, the number of homes sold decreased by 16% compared to the previous year. The median days on the market increased by 10 days, reaching a total of 36 days.
Experts predict that the North Carolina housing market will continue to slow down in 2023. While home prices are expected to rise by 2-3%, the number of homes available 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 serves as 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 experienced 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 high 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 available 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 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 the list price, price drops, and sale-to-list price ratios. In June 2023, 35.1% of homes in North Carolina were sold below the 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, metros like Las Vegas, Sacramento, Orlando, and others were highly sought-after destinations. On the other hand, cities like San Francisco, New York, Los Angeles, and more experienced 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 consistent 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. Homes are going pending in just around 8 days, presenting a compelling landscape for both buyers and sellers in North Carolina's real estate sector.
Economic and Lifestyle Factors
The positive trajectory of the North Carolina housing market reflects 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, evident from the 41.8% percent of sales over the list price and the 41.0% percent of sales under the 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 advantage for sellers. The median time to pending, at just 8 days as of July 31, 2023, underscores the strong demand and 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
North Carolina presents a landscape of opportunities for real estate investors. The projected growth in multiple MSAs indicates the potential for substantial returns on investment in the coming years. Buyers 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, with major industries such as technology, healthcare, finance, and manufacturing. This economic diversity provides a solid foundation for sustained housing demand.
- Population Growth: The state continues to attract newcomers due to job opportunities, quality of life, and a 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 often indicate 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 helps maintain stability.
- Balanced Metrics: The balance between homes sold over the list price and those sold under the list price (41.8% and 41.0% respectively, as of June 30, 2023) signifies a diverse range of properties catering 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, market conditions can change over time, and it's essential to stay informed and seek advice from experts to navigate the North Carolina housing market with confidence.
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North Carolina Housing Supply Graph
Source: FRED
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
