Similar to that of the rest of the country, home prices in Raleigh, North Carolina are up from the previous year, but beginning to show signs of easement. Following recent appreciation rates, the current median home price in Raleigh is $212,500. At that price point, the Raleigh housing market is lagging behind the rest of the country. Accordingly, the current median home price in the United States is $216,567. Despite being below the national average, homes in Raleigh have appreciated faster than the rest of the country in the last year, 4.8 percent and 4.7 percent respectively. It requires us to go back three years to see where the rest of the country really separated itself. In that period, the Raleigh housing market appreciated approximately 9 percent, whereas the rest of the country saw an appreciation rate of 28 percent.
After three years of remarkable appreciation rates, the Raleigh housing market became the beneficiary of long lost equity. As a result, Raleigh real estate investing saw a lot of activity. The following highlights how much equity has been gained relative to the year of purchase:
- Homes purchased in the Raleigh housing market one year ago have appreciated by an average of $12,821, whereas the national average was $12,783 over the same period.
- Homes purchased in the Raleigh housing market three years ago have appreciated by an average of $26,801, whereas the national average was $55,406 over the same period.
- Homes purchased in the Raleigh housing market five years ago have appreciated by an average of $45,007, whereas the national average was $49,675 over the same period.
- Homes purchased in the Raleigh housing market seven years ago have appreciated by an average of $24,204, whereas the national average increased $9,474 over the same period.
- Homes purchased in the Raleigh housing market nine years ago have appreciated by an average of $58,537, whereas the national average increased $3,419 over the same period.
As perhaps one of the most prominent drivers of supply and demand in the Raleigh housing market, the job industry remains encouraging. With an unemployment rate of 5 percent, unemployment in Raleigh is better than the national average. Perhaps even more importantly, the unemployment rate continues to improve. In the last year, the unemployment rate has decreased by 0.8 percent. Local employment growth is strong compared to that of other markets. In fact, Raleigh has a 1-year job growth rate of 3.2 percent, 1.4 percent higher than the national average.
Despite the encouraging job sector, new housing construction continues to decline from last year. Single-family housing permits have proceeded to decline 3.6 percent over the last 12 months, whereas the national average saw an increase of 2.3 percent. Typically, new construction is the driver of supply, but foreclosures and short sales now have a stronger influence on the amount of homes that are available for purchase. With a rise in inventory, downward pressure has been placed on the median home price. This may be to blame for the current median home prices that lag behind the national average.
While prices in the Raleigh housing market are just under the national average, they are, in fact, more affordable than most markets across the country. Whereas the average homeowner in Raleigh dedicates approximately 11 percent of their income to their mortgage payment, the average U.S. homeowner allocates about 16.3 percent of their monthly income. In other words, affordability in Raleigh is historically strong.
According to Trulia, the most popular neighborhoods in Raleigh are as follows:
- Northeast Raleigh: Average Listing Price ($187,483)
- North Raleigh: Average Listing Price ($365,254)
- Southeast Raleigh: Average Listing Price ($140,183)
- Northwest Raleigh: Average Listing Price ($355,308)
- Southwest Raleigh: Average Listing Price ($193,452)
Zillow suspects that foreclosures will have a huge impact on the Raleigh housing market over the next several years. Accordingly, as it stands, nearly 4 houses out of every 10,000 enter into the foreclosure process. While this is greater than the metro rate of foreclosures, it is lower than the national average. Nearly 5 percent of the homes in Raleigh are considered to be delinquent, which is lower than the national average of 6.4 percent. About 12 percent of the homes in Raleigh are considered to be under water. Fore all intents and purposes, the Raleigh housing market is healthy. Experts predict a 3.2 percent increase in home prices over the next year.
“A broadly improving economy and rebounding home prices are giving baby boomers the opportunity to sell and move to support their retirement lifestyles,” said NAR Chief Economist Lawrence Yun in a written statement. “Furthermore, our research identified cities movers are gravitating to while still remaining in the workforce as a business owner.” Yun, of course, was referring to Raleigh, North Carolina. In fact, Raleigh is one of two markets (Boise, Idaho being the other) positioned to see an influx of boomer homebuyers. Thanks largely in part to its favorable cost of living, housing affordability, and available inventory; Raleigh is expected to become the beneficiary of a lot of hosing activity. The Raleigh metro, on the other hand, reported the highest rating than any other market on the National Association of Realtor’s (NAR’s) Housing Affordability Index at 206. The national average of the 100 metropolitan areas tracked by NAR was 198.46.
Other notable housing markets for boomers included three Florida metro areas (Fort Myers, Orlando, Sarasota); two markets in Arizona (Phoenix, Tucson); Albuquerque, New Mexico; Greenville, South Carolina; and Denver.
Raleigh Housing Market Summary:
- Current Median Home Price: $212,500
- 1-Year Appreciation Rate: 4.8%
- Unemployment Rate: 5%
- 1-Year Job Growth Rate: 3.2%
- Population: 431,746
- Median Household Income: $61,710
Raleigh Housing Market Q1 Update:
The Raleigh housing market continues to trend in the right direction. Nearly every indicator looks to be pushing Raleigh to the forefront of the housing recovery. The local economy, for example, has only improved since the first quarter of this year. In a matter of four months, unemployment has dropped from 5 percent to 4.2 percent. Even the 1-year job growth, which was impressive at 3.2 percent last quarter, improved to 3.5 percent. For all intents and purposes, the local economy will support both supply and demand for the foreseeable future.
That is good news for the Raleigh housing market, as prices continue to shoot up. At the beginning of the year, the median home value in Raleigh was $212,500. That same value is now $213,200. While the increase is minimal, appreciation rates have increased to 6.7 percent.
Perhaps even more remarkably, the area’s housing market is still relatively affordable. The Raleigh real estate investing market, for all intents and purposes, should be able to take advantage of said affordability. According to RealtyTrac, Raleigh real estate investors will have about 642 foreclosures to choose from. That means that 642 homes are currently at risk of being repossessed, have already been taken from delinquent homeowners, or are scheduled to be placed up for auction. At that rate, foreclosure numbers have increased by as much as 26 percent from last year.
Those interested in Raleigh real estate investing will appreciate the discount that these homes offer. While the average, non-distressed home in Raleigh sold for approximately $182,000, distressed properties sold at a discounted rate of about $128,920. That is a savings of about $53,000 per home, or 29.2 percent.