The Winston-Salem real estate market, in many ways, mirrors the national market. While things have stabilized over the past three years, the expected growth has not come as quickly as some had anticipated. There are some promising signs, but the market is in need of a spark. That spark may come in the form of new mortgage guidelines or a focus on building the local buyers’ market. Either way, with the cost of living and a picturesque landscape, the Winston-Salem housing market is poised to see a major uptick in the near future.
The fact that Winston-Salem real estate lags behind the national market in terms of median sales price should not come as a surprise. North Carolina has long been known for its reduced cost of living. Last quarter, the national median average sales price was $208,067. The Winston-Salem real estate market, on the other hand, had a median home price of $134,500. This number represented an 8.1 percent increase over last year. Over a three year average, appreciation in the Winston-Salem real estate market is up over 16 percent. On paper, these can be viewed as signs of major recovery. However, in relation to where the market was five years ago, the growth is modest at best.
The amount of equity gained with a property is a good representation of the growth of a local real estate market. For the Winston-Salem housing market, it is a case of both good and bad news. The good news is that total equity is up almost $12,000 from the same time last year. The bad news is that the national average in this same time is over $14,000. The following highlights equity growth for the Winston-Salem housing market over the past three years:
- Equity gained from homes purchased in the Winston-Salem market one year ago are up $11,997, whereas the national average was $14,170
- Equity gained in Winston-Salem properties purchased three years ago have risen $24,685 with the national average $53,857.
While this is much lower than the national averages, the Winston-Salem real estate market was also not nearly as high at its peak. Equity was certainly gained over the past decade, and the Winston-Salem real estate investing community has taken notice. Numbers weren’t as high, so they did not have very far to fall. These numbers should be viewed as a positive instead of a disappointment when pitted against national data.
Supply and demand are the backbone of any real estate market. You can tell a lot about a city based on this information. If that is the case, Winston-Salem is poised for a recovery. The current unemployment rate is 4.5 percent, as compared to a national average of 5.6 percent. With more people working, this should directly accelerate the number of buyers that hit the market. More buyers equal increased demand, which will boost home prices and values. The unemployment numbers are also better than this time last year. Last year, Winston-Salem had an unemployment rate of 5.6 percent, compared to national rate of 6.7 percent. This further indicates that Winston-Salem is staying ahead of the curve, and should recover locally faster than the rest of the country. The only knock on this market is the current level of job growth. The local number is just under 1percent, with the national average at 1.9 percent. This is an area of the market that certainly needs to improve.
What cannot be understated, in regards to the Winston-Salem housing market, is the high level of affordability. One of the indicators of affordability is the monthly mortgage payment to income ratio. The Winston-Salem real estate market boasts some of the best numbers in this area, with an average of 7.9 percent over the course of last year. This is exactly half as low as the national average of 15.8 percent. What this means is that there is more disposable income. This has a trickle down impact on buyers’ demand, where business owners look to set up shop and even area taxes. All things equal, buyers will gravitate towards markets that are more affordable, and the Winston-Salem housing market is one of the most affordable in the country.
In much like the rest of the country, foreclosures are still an underlying problem. Almost half of all real estate transactions in the area involve distressed sales. The positive news is that number of foreclosure filings was down 2 percent from the same time last month, and a whopping 39 percent from the same time last year. Overall, home sales were down 54 percent from last month, and 77 percent from this time last year. The medium sales price was actually up 5 percent from the previous month, with the one year numbers almost identical from twelve months ago. While the number of sales and foreclosures isn’t promising, the fact that home prices have remained stagnant is a positive sign.
Winston-Salem real estate investing should be able to turn distressed properties into money making opportunities. That said, distressed properties offer great spreads for investors. The median sales price of a non-distressed home was $115,000. The median sales price of a foreclosure home was $61,354, or 47 percent lower than non-distressed home sales. That is an average savings of more than $53,000 per property. Investing in Winston-Salem real estate provides attractive numbers for investors considering nearly any exit strategy.
One of the things that make Winston-Salem unique is the consistency the market has exhibited. Even in the most popular zip codes, there is not a lot of listing price movement either way. The only area that showed double digit movement in either direction is the Belews Creek section, which had a 12.7 percent reduction in list price. This speaks to the how much of a stagnant market there is, which may be sitting on some breakout growth.
The Winston-Salem housing market boasts a balanced spread, with almost an equal number of homes priced under the mean and over it. Due to the increased inventory, the market has to be considered a buyer’s market. There is a large population of renters that are set to hit the market and increase the buyers pool. With the high level of affordability and the low cost of living, Winston-Salem real estate is a popular candidate to break out. What we are seeing is an area that has weathered the recession and foreclosure epidemic, and has come out stronger on the other end. The market may be currently stagnant, but there are indicators in place that it may be ready to take off in the coming months. The Winston-Salem real estate investing market needs to be ready to act.
Winston-Salem Real Estate Market Summary:
- Current Median Home Price: $134,500
- 1-Year Appreciation Rate: 8.1%
- Unemployment Rate: 4.5%
- 1-Year Job Growth Rate: 0.9%
- Population: 236,441
- Median Household Income: $40,869