Housing boom over? Triangle prices fall in August but agents aren’t panicking

Housing boom over? Triangle prices fall in August but agents aren't panicking

RALEIGH – A new report from the Wake County Register of Deeds Office shows that the median sale price of real estate in Wake County during August 2021 was $365,000, down $19,000 or more than 5% than in July.

The median sale price in the Wake County Register of Deeds data set fell from its calendar year high of $384,000, the median sale price in July 2021.

But that doesn’t necessarily mean that the real estate market is cooling, said Luther Snyder, Deputy Director of the Wake County Register of Deeds.

Overall, the comparison between July and August shows that in the core segment of the real estate market (transactions less than $1 million) and in the high value segment of the real estate market (sale price of $1 million to $30 million), the total value of the market was near the same valuation.

And real estate agents aren’t panicking.

“Typically the market does slow a bit in August because of the back to school and this year would be a much different back-to-school than we have seen in the past,” said David Jones, CEO Coldwell Banker HPW. He pointed out that many families are now returning to routines they haven’t practiced in over a year, or starting new routines.

Jones shared his company’s internal data with WRAL TechWire, noting that by their calculation, which omits new construction homes, the median sale price in Wake County in August 2021 was $397,000.  In July 2021, their data listed the median sale price in Wake County at $400,000, which was the same median sale price in June 2021.  In May 2021, the median sale price was $376,000, according to Jones.

“Don’t see a reason to sound the alarms about this as there will be fluctuation in the market,” said Jones.

Homes continue to be sold in Wake County, and across the Triangle

The Register of Deeds data showed that there were 3,062 transactions in the core market in Wake County, totaling $1.13 billion, down some $9.2 million from July, when there were 2,858 such transactions.

In the high-value segment, (transactions worth between $1 million to $30 million), had 121 transactions totaling a little over $325 million, compared to 148 such transactions in July 2021, valued at about $409 million.

“Hence, lively and solid overall market,” said Snyder.  “People are still buying and selling, refinancing, and taking out lines of credit and home equity loans.”

In fact, according to data from the Wake County Register of Deeds, refinancing activity increased by 13% in August 2021 compared to July 2021, and the data still shows that there is still a gap in the market, between deeds filed and deeds of trust filed.  “They are both tracking northward in lockstep,” Snyder noted.

In August 2021, all very high value segment transactions in Wake County, or transactions valued at more than $30 million, involved multifamily apartment buildings, the data showed.  The four transactions totaled just over $260 million, a significant decrease in this segment of the market compared to July 2021, when 12 such transactions occurred, totaling nearly $1 billion.

Triangle real estate stays hot: Prices surge 18% – more than triple inflation rate

Triangle MLS data for August 2021

Newly released data from the Triangle Multiple Listing Service, or TMLS, shows that for August 2021, the median sale price in Wake County was $400,000 on 2,084 transactions, and that the median sale price from July 2021 in Wake County was $407,319 on 1,974 transactions.

Triangle-wide, the region saw a decrease in median home sale price of $355,000 on 4,192 closed sales in July 2021 to $351,000 on 4,337 closed sales in August 2021.

“First of all we are still in a strong market with low days on market, very low inventory, and still with 104% sale to list price,” said Courtney Brown, a real estate agent with Hunter Rowe.  “I would not read that the average sales price dropping slightly means that we are in a less competitive market.”

The indicators in the data set that demonstrate the real estate market is still competitive, said Brown, including the 104% sale-to-list price ratio.  That metric means that the winning offers from competing homebuyers are, on average, more than the list price of the average home. In fact, a recent report found that this ratio was above 100% in in 60 of 66 regional zip codes.

And, a recent Redfin analysis of August 2021 agent data showed that Raleigh was the most competitive market in the 48 markets tracked in the data set, with 86.7% of offers written by Redfin agents facing competition from other agents and buyers in the month of August.

That outpaced Silicon Valley, in the second spot, which had a bidding-war rate of 70.7%, according to the report.

“A few things are happening at the same time,” said Brown.  “The first is that we are in a unique time.”  School starting for the year may cause a disturbance in market patterns, and that often happens, said Brown.  This year in particular, said Brown, “the fluctuation of rules and regulations due to Delta may make that even more confusing for those also trying to move at this time.”

Concerns over coronavirus and the Delta variant may be higher priority for people right now, as opposed to seeking new housing options, said Brown.

Population, job growth keep Triangle housing market hot as other areas cool

Still, there was no change between July 2021 and August 2021 in the number of days the average home is on the open market, which is nine days, nor in the measure of home supply, which remained unchanged at 0.7 months of supply across the region.

“Sellers remain in control, but the next month or two will be very telling,” said Raleigh Redfin agent Stacey Delgado in a statement about the Redfin report.  “There are parts of the city that remain fiercely competitive, like the Research Triangle, which is Raleigh’s tech hub and has highly-rated schools.”

The region remains particularly attractive to out-of-state buyers, noted Delgado, “who are flush with cash and can work remotely continue to flock there and bid up home prices.”

In-market buyers may also be adjusting their strategy

“Anecdotally, many of my buyers have said we don’t want to go as high over list for just any house any more it has to be the house we most desire,” said Brown, which is leading to less aggressive offers, for some, and leading other buyers to agree to wait, choosing renting rather than purchasing a home that isn’t highly desirable.  So many are not being as aggressive on the offers as they were, or are renting longer until they find the one they want.

“This is not to say that we are not still seeing bidding wars or people losing out in extremely high multiple offers on homes in many areas,” said Brown.  “We are, and many of my buyers are still putting in multiple offers well over ask and not winding up with the house.”

The market fluctuation with regard to a decreasing median sale price could also be attributed to seller behavior, said Brown.

“It is a proven fact that a home that is prepared for sale can be listed for more money and bring the seller more profit,” said Brown.  “But in this market I feel I am often walking into homes that are care has not been taking to make them look as presentable as they might.”

While the home will still sell, and likely will still sell quickly, said Brown, “It may not sell for as high a price or get into as strong a bidding war if care had been taken to properly prepare and price the home to bring in buyers.”

“Very few people want to buy the project house,” said Brown.  “Even if that project is simple.”



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About the Author

Anthony Barnett
Anthony is the author of the Science & Technology section of ANH.