(The Center Square) – North Carolina home prices continue to rise, though at a much slower rate than during the pandemic, a trend real estate professionals do not expect to change any time soon.
The latest available market trend report from NC Realtors for July shows the median sales price increased from the previous month to $315,469, a number that’s up 2.6% over the last year and nearly $100,000 higher than in July 2020.
Listings and sales, meanwhile, are both down year-over-year 21% and nearly 25%, respectively.
The situation with rising prices and declining sales stems from low inventory, coupled with continued demand that peaked during the pandemic and remains strong.
“Listings were up a little bit in July, but they’re down 21% from last year. That’s been a consistent problem,” NC Realtors spokesman Mark Zimmerman told The Center Square. “There’s not a lot of supply for buyers to choose from.”
“There’s still plenty of people who want to buy homes,” he said.
Inventory, meanwhile, is at 3.2 months – the time it would take to sell all homes on the market at the current rate, without new stock – well below the six-month equilibrium considered a balanced market.
“That’s why this is considered a seller’s market,” Zimmerman said.
A rock-bottom Federal Reserve benchmark interest rate of 0.25% conspired with work from home policies during the pandemic to bring a flood of buyers to North Carolina’s real estate market. Numerous increases in the rate to about 5.5% now has changed the dynamic over the last year.
Nationally and in North Carolina, both buyers and sellers became more hesitant to enter the market, though “North Carolina never dipped into negative sales” as other areas did, Zimmerman said.
“We never experienced even a moderate short-term housing recession, but the rate of growth did moderate,” he said, noting double-digit increases in home prices became single-digit increases.
“This is still a healthy increase at 2.6% through the year,” Zimmerman said.
The upward trend in prices isn’t expected to change, as the Old North State continues to draw new residents. Recent reports on internal data from North American Moving Services and Atlas Van Lines both highlight North Carolina as a top inbound destination last year, with the former naming Raleigh as the top city in the nation for those moving from other states.
Another study from U-Haul ranked the state fourth in the nation for growth.
“As our population grows … demand will remain high and from a policy perspective we’re going to have to find a way to get a lot more housing stock in North Carolina,” Zimmerman said. “That’s the only long-term solution for us to remain a relatively affordable state in North Carolina for housing.”
