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July 29, 2022

The New Normal: Houses Available to Buy Reach All Time Lows

By

Victor Valentine Romo

The New Normal: Houses Available to Buy Reach All Time Lows

Work-From-Home / Remote Work Created an Influx of New Residents

While this may come as a surprise to absolutely no-one, the Triangle has seen a drastic increase in new home ownership.

"Home sales rose nearly 11 percent across the state in 2020, while median prices climbed almost 10 percent. In the Triangle, sales were up by 9 percent over 2019, with median prices rising more than 6 percent, to $295,000." — WRAL

People are realizing they can get much more house for a more affordable mortgage. This is especially important because spending time (between work and recreation) at home has become the top priority.

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If you're going to be spending a majority of your life in your home, wouldn't you want to be comfortable?

Residents in densely-populated states are seeing the appeal of moving to areas that are quieter, have less traffic, or offer more livable space within their homes.

Record Low Interest Rates + Record Low Inventories = Current Price Crunch

People are flocking to North Carolina to settle for the quieter life to raise their families and work from home.

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Local news reports show much of the same sentiment no matter which county.

From Dunn to Wake Forest, Pittsboro to Chapel Hill, the markets are as hot as ever.

"Researched migration trends to prove that point. According to mover United Van Lines, 60 percent of the moves in North Carolina were made by people moving into the state, which is the sixth-highest inbound percentage in the country." — WRAL
  • In Wake County, sales were up 6.8 percent, and prices were up 7.1 percent.
  • In Durham County, sales jumped 4.2, percent, and prices rose 6.7 percent.
  • Johnston County experienced a 14.5 percent increase in sales and a 6.4 percent increase in prices.
  • Despite sales dropping 2.2 percent in Orange County, the median price went up more than 4 percent.
  • Cumberland County had the biggest winners among home sellers, with sales up 13 percent and prices up 12 percent.
  • All statistics provided courtesy of WRAL.com

Between record-low interest rates & record-low inventories, we're experiencing a 'crunch' of prices being driven up across North Carolina, especially areas adjacent to Raleigh / the Research Triangle. Listings have been in short supply across the Triangle since mid-last year.

There are a few reasons for inventory reaching these record lows, the most notable being mortgage memorandums that allowed those effected by the pandemic to not have to worry about foreclosure. However, many of these programs end in the summer. The hope is that more homes will be able to go up for sale to keep up with demand.

One of the simple responses to this problem is, "why can't we build more houses?"

To that, there is an even more concerning answer...

Building Costs, Lumber, & Worries of Inflation

Lumber shows absolutely no signs of slowing its dramatic increase of pricing over the last year, leaving some builders concerned for their developments.

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Consider this stat: Lumber prices have risen by 130 percent since before the COVID-19 pandemic, which makes for an estimated $24,000 difference in the cost of a newly constructed single-family home, per data from the National Association of Home Builders. As of press time, the average lumber price is $1,372 per 1,000 board feet. — Popular Mechanics

We wrote about rising building costs in December 2020, but are only now seeing the effects of this continuing crunch caused by the lockdowns & supply chain problems.

Perhaps there will be some relief in the near future. But as it looks now, the Triangle is going to have a red-hot market for the foreseeable future.

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