RALEIGH- Some would-be buyers now believe that if they wait a little longer, house prices will fall and the Triangle’s property markets will crash like in 2008. Then they can buy a house when prices come down. fall.
But local real estate agents and property economists don’t see it playing out that way, expecting the most likely scenario to be one of a temporary flattening or loosening of the market, but of gains. long-term prices as the region creates well-paying jobs.
And even if home sales prices in the area stabilize or decline in the coming months, housing costs for new homeowners could still end up being higher than they otherwise would have been due to the rising mortgage interest rates. That’s why if you’re considering buying a home, now is a good time, especially if you were able to lock in an interest rate earlier this year that positions you to buy soon.
That’s according to John Connaughton, an economist and professor of financial economics at the University of North Carolina at Charlotte, who predicted housing costs would continue to rise in a virtual economic forecast last month.
Yet the latest data from Triangle Multiple Listing Service, TMLS, the region’s real estate transaction database, shows that in Wake County, the median home sale price did not increase in May 2022 compared to the last month.
The median sale price in Wake County in May 2022 was $485,000, the same median sale price seen in the market in April 2022.
Still, homes averaged just four days on the market in May 2022, compared to six days on the market in May 2021, when the median sale price in Wake County was $389,900.
And in County Durham, the median sale price in May 2022 was $424,250, according to the TMLS report. That’s down from the median sale price of $426,000 for all deals in the county that closed in April 2022.
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So, is a stock market crash coming?
Local realtors say that probably won’t happen, and certainly not in the Raleigh-Durham area.
“We always see multiple offers on a good number of properties, and the real dilemma we find ourselves in is that we don’t have enough supply,” said Jason Kogok, co-owner of Coldwell Banker HPW/Luxury Movers Real Estate. . , said WRAL News this week.
Kogok has been working in the Triangle real estate market since 2002.
“We ran 1,000 degrees for a while, and now I think we’re running 800 degrees, so we’re still super on fire,” he said.
Experts say that compared to market growth over the past two years, the Triangle property market is still quite healthy and only showing signs of improvement.
National real estate brokerage Redfin chief economist Daryl Fairweather likened the real estate market to a change in speed on a highway in a report released earlier this month that sought to explain why some local markets could see a slowdown in sales or a drop in the median or average selling price of homes.
“The housing market was going 100 miles per hour and now it’s down to 80,” Fairweather said in the report. “It’s not the bursting of a bubble.”
Here in the Triangle, we have become accustomed to soaring house prices and soaring home values, Kogok said.
“We’re so used to comparing it to the last 18 or 24 months that we’ve lost some perception of what a healthy market really is,” he said.
While local real estate agents are seeing fewer viewing requests, signaling fewer potential buyers competing to win a deal to buy property, they are still seeing plenty of offers and bids on asking prices, according to the local agent Jason Dalton, who has worked in the Raleigh-Durham area for 19 years.
“If you could fast forward to see it 20 years from now, you’ll be really glad you jumped on it in 2022,” Dalton said.
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Could rising interest rates make homes more affordable?
The U.S. Federal Reserve announced on Wednesday it would raise interest rates by three-quarters of a percentage point, the biggest increase since 1994.
This, in addition to a 12-month inflation rate not seen in 40 years, has a complex effect on local housing markets.
“Houses tend towards the higher pay brackets,” said Thomas Babb, director of communications at TMLS. “You’re going to see a lot fewer homes in the $200,000 range. This is partly due to inflation.
Still, the Federal Reserve’s interest rate hike will likely help the market “calm down” a bit, Babb predicts. Although mortgage interest rates are not set by the Federal Reserve, Fed interest rates impact major mortgage markets as lenders adjust to prevailing economic conditions.
“It has a correlation with the median sale price. That’s up from a year ago, but down from last month,” he said.
“As house prices level out and come down a bit, you’re going to see the affordability index start to rise again,” Babb added.
TMLS publishes an index monthly that tracks housing affordability, based on the median selling price of homes, household income and prevailing mortgage rates. For May 2022, the index measured 72. A year ago, in May 2021, the index measured 111.
This is a 35.4% decrease in housing affordability year over year. And Wake County is now among the least affordable markets in the nation, according to a recent analysis of real estate market data and salary data conducted by ATTOM Data Solutions.
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According to Mortgage News Daily, the average interest rate on a 30-year fixed mortgage is now hovering above 6% as of 4 p.m. on June 15. For comparison, the average mortgage rate for a 30-year fixed mortgage was 2.93% for the week ending June 17, 2021 and 3.13% for the week ending June 18, 2020, according to the primary investigation into the Freddie Mac mortgage market.