The initial predictions that the COVID-19 crisis would lead to doom for the housing markets have been the exact opposite of what has happened. While the pandemic has not necessarily been good for the economy, the North Carolina housing market has responded the same way as home prices throughout the U.S. If you are wondering are house prices going down, for now, the answer is a resounding no.
People Were Initially Writing Off the North Carolina Housing Market
In the first month of the pandemic, nobody knew the effects that it would have on asset values throughout North Carolina. One certain thing was that people seemed to think that there would be a repeat of the Great Recession when every single asset dropped dramatically. The initial thought was this included real estate.
However, the Federal Reserve soon came to the rescue and saved NC real estate. Immediately after the start of the pandemic, the Fed slashed interest rates to zero. Now, they have indicated that interest rates will stay low for years as the economy seeks to recover from the harm inflicted by the pandemic.
Low Mortgage Rates Have Sparked a Rally in Home Prices in North Carolina
For prospective homebuyers, this is great news. Low-interest rates filter their way through to the rates that you would pay on your mortgage. Lower mortgage rates mean that you can pay more for a home. This effectively puts a floor under housing prices because mortgages are so cheap right now. As long as people can qualify for a mortgage, they can afford much more house for their money.
The realization that mortgage rates would put a floor under the housing market has pushed prices up in North Carolina. While home sales have fallen in the area because fewer people are selling, the prices of the houses sold have gone through the proverbial roof.
The North Carolina Real Estate Market Features Sharply Rising Prices
Pandemic aside, the North Carolina real estate market is still thriving. Thus, if you are wondering if the real estate market is up or down, your proof is in the prices. The North Carolina real estate market has seen an overall 6% rise in price from 2019 to 2020. The average home price in the state has increased above $214,000 this year. The market in the state shows no signs of slowing down, either.
So long as the economy manages to hold up as it has thus far, the real estate market in the state should remain strong. North Carolina has been a hot market in general as the state has outpaced the nation in economic growth. The state is still growing by leaps and bounds, and that is manifested in the housing market.
Non-Luxury Homes Are Doing Well
Of course, there are different categories in the housing market. Lower-priced homes are more popular right now and are being snapped up at a much faster rate than upper-end houses. Affordable homes are in short supply in the North Carolina market, leading cheaper homes to be much in demand.
Raleigh Buyers Need to Act Quickly
The situation is particularly tight in the Triangle housing market. The Raleigh real estate news is that the market is tight for buyers. By May of 2020, the number of home closings in the Raleigh area had fallen considerably from 2019. People were deciding to stay put since there was less of a reason to move during the pandemic.
The situation in Raleigh means that buyers need to be prepared to act immediately once a home is listed on the market. This includes having financing lined up and making sure all the paperwork is ready. One thing is certain in the Raleigh market and that is that homes go fast.
Raleigh Homes Are on the Market for a Week
The amount of time that a listing is on the market in Raleigh has been trimmed to one of the lowest averages in the country. In June 2020, Raleigh homes were on the market for an average of a week before being sold. This is four times quicker than the time to sell at the end of 2019. Prices in Raleigh have risen 2% since the start of COVID-19 and 4% since the beginning of 2020.
In general, homes in the U.S. have been going much quicker since the start of the pandemic. Historically, North Carolina, and especially Raleigh, has homes that sell much more rapidly.
New Supply Is Essential for the Triangle Area
There is simply not enough supply in the Triangle area to keep up with demand. Even before the pandemic, supply in the market was very tight. In June 2019, there were over 1,700 homes on the market in the Raleigh area. That number has fallen considerably in 2020.
What this means for you depends on your interest in the real estate market. If you are a homeowner, this is certainly music to your ears. If there is the possibility that you may sell your home, you will likely have little difficulty selling and can be ambitious in your asking price.
Homebuyers Need to Have Everything in Order
If you are a North Carolina homebuyer, things will be considerably difficult for you. There is little chance that you will find the exact home that you want quickly. Instead, you should start looking well before you think that you will need a home. At the same time, you will need to have your paperwork and financing in order so you can move quickly the second you see a home that you like.
Moreover, buyers should be prepared for a possible bidding war on each home. If you are interested in a home, chances are that multiple other buyers feel the same as you do and are ready to put down their offer. This situation may get even worse in the winter as people are more likely to stay put until the spring given the COVID-19 situation in North Carolina.
One of the best ways to make sure that you have access to a house when you are ready to buy is to buy a newly constructed home. Getting a newly constructed home also means that you can be more involved in the design process. You can choose the special features you want to be incorporated, and oftentimes, you can choose the lot that you want your home built on. If this sounds like the right choice for you, give us a call at Mornington Estates to learn more about how you can buy a new home in the Raleigh area.