Cracking the Raleigh-Durham Housing Market: Broken Rules of Supply and Demand

February 16, 2024

Tim Clarke

Expert insights on the puzzling Raleigh-Durham housing market. Low inventory yet slowing sales have broken the rules of supply and demand.

The housing market in the Raleigh-Durham area is acting really strange lately. Home prices keep going up, but fewer people seem to be buying houses. What's going on here? Let's break it down.

There Aren't Enough Houses for Sale

One big reason for the weird housing market is that there just aren't enough houses for sale right now. In January 2022, there were only 1,585 houses for sale in the whole Raleigh/Durham area.

That's 46% less than the year before!

This means there is only about 1 month's worth of houses available to buy right now. Usually, a balanced market would have about 6 months of houses for sale. So there is a huge shortage of houses on the market.

High Prices Are Pushing Buyers Away

Because there are so few houses for sale, the prices keep getting higher. The median home price in Raleigh/Durham is now over $400,000. That's way above what most buyers can afford.

On top of that, interest rates for mortgages went way up in 2022. This made monthly payments a lot more expensive.

So even though houses keep getting more valuable on paper, fewer people can actually afford to buy them.

Is a Housing Bubble About to Burst?

Some experts worry that home prices in Raleigh/Durham may be inflated, like a bubble ready to pop. Home values went up over 20% last year alone. That kind of growth can't continue forever.

However, Raleigh/Durham has avoided big housing swings in the past. Steady population growth and job opportunities have kept demand strong. So a sudden crash in prices seems unlikely for now.

Why Aren't More Houses Being Built?

With prices high and demand strong, why don't builders just construct more houses? Well, building costs have gone up a lot too. So new houses often get listed at top-tier prices.

There are also limits on how fast new neighborhoods can be built. The Raleigh/Durham area has grown responsibly, avoiding an oversupply. But this means the housing shortage won't disappear overnight.

What Should Buyers and Sellers Do?

For buyers, be cautious before jumping into this market. Consider your budget carefully, and work with an experienced real estate agent and loan officer. There are still deals to be found if you're patient.

For sellers, pricing your home accurately is crucial. Work with a knowledgeable agent to market your house effectively. Even in this odd market, the right property at the right price will attract buyers.

The Raleigh-Durham housing market remains strong overall. But between low supply, high prices, and rising rates, it's an unpredictable time.

Let our team help guide you through these changing conditions. We're here to help buyers and sellers navigate this weird market!

Advice From an Expert

As a real estate agent with over 15 years of experience in the Raleigh-Durham Triangle area, I've helped hundreds of buyers and sellers navigate changing markets.

My team and I are familiar with the nuances of the local housing landscape. Here's my advice for making the most of the current conditions:

For buyers, partnering with an agent you trust is key. We can guide you through the process, from determining your budget to submitting competitive offers.

Don't get discouraged by inventory shortages and bidding wars. With patience and perseverance, we can find the right home for you.

On the seller side, pricing strategically is crucial. My team utilizes data-driven pricing tools to maximize your home's value.

We also leverage our marketing expertise to generate excitement around your listing. Even in shifting markets, the right prep work pays off tremendously.

Throughout the transaction, communication and transparency are vital. My goal is to educate and empower you to make informed decisions.

Real estate is personal, and my team takes pride in making the experience as smooth as possible.

Buying or selling a home is a major financial move. But with the right local guidance, you can prosper in any market conditions.

Don't hesitate to reach out to me for personalized real estate advice tailored to your needs. My team and I are always happy to help!

FAQ

What's causing the low inventory in the market?

A few factors: existing homeowners not listing due to limited options, rising building costs limiting new construction, and high demand from steady population growth.

How long will prices keep rising in Raleigh/Durham?

Hard to say for sure, but price growth may moderate with higher interest rates reducing buyer budgets. Still, strong local economy supports continued gains.

Are there any affordable areas left in the region?

Yes, but they are limited. Look to outer suburbs like Rolesville, Wake Forest, and parts of Durham for lower prices.

Should I wait to buy until inventory improves?

Not necessarily - more buyers may return when rates drop, spurring competition again. If your budget allows, buying now can make sense.

How can buyers compete in a bidding war?

Make a strong preapproval offer with favorable terms like flexible move-in dates. Write a personal letter to the seller. Act quickly.

What's the best pricing strategy for selling my home?

Price slightly below market value to generate interest, then leverage multiple offers to start a bidding war and maximize sale price.

How long does the average home stay on the market?

In 2022, average days on market was just 10. Well-priced homes in good condition sell incredibly fast.

Should I sell now or wait for higher prices?

No way to time the market perfectly. If you need to sell soon, today's prices are still historically high.

Will a recession crash the housing market here?

The Triangle market is more insulated given tech and education sector strength. A downturn may slow price growth but not necessarily trigger drops.

What sets the Tim M. Clarke team apart?

Deep knowledge of local markets, data-driven pricing, and five-star marketing to maximize sales. Focus on client education and transparent guidance.

Tim M. Clarke

About the author

17 years as a Realtor in the Research Triangle, Tim seeks to transform the Raleigh-Durham real estate scene through a progressive, people-centered approach prioritizing trust & transparency.

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