RALEIGH – Historically, the winter months bring a slowdown in the real estate market, making it an optimal time to buy, but in 2021, the most recent data from the Triangle Multiple Listing Service shows prices increasing, not decreasing, as winter began. The median sale price of real estate in the Triangle rose in November compared to October.
Across the Triangle, the median sale price for a home was $369,000 in November, up from the median sale price of $365,000 in October, with 4,073 transactions closed in November compared to 4,007 transactions in October, according to the latest reports from Triangle Multiple Listing Service (TMLS).
WRAL TechWire reported earlier this week that the median price of all real estate transactions in Wake County increased in November to a record high, according to an analysis of public records conducted by the Wake County Register of Deeds.
Prices are increasing due to a continued lack of inventory, said Jim Allen, a licensed real estate agent and owner of the Jim Allen Group.
“We have more people every day moving to the Triangle and are dealing with this shortage of homes as well as an interruption in all the supply chains causing huge interruptions in building new construction,” said Allen. “As we all know, scarcity creates higher prices.”
Year-over-year price appreciation is now 21%, according to November TMLS data, across the Triangle. In Wake County, the latest TMLS data shows a year-over-year price appreciation of 21.3%, and in Durham County, it’s even higher: 27.6% higher in November 2021 than in November 2020. That’s a change in median price of $298,065 in November 2020 to $380,250 in November 2021 for real estate in Durham County.
“2021, despite Covid, is the most incredible sellers market the Triangle has ever seen,” said Allen. “We are still experiencing a severe lack of inventory of homes to sell.”
The November data is one month, but could be indicative of what’s to come in 2022, noted Allen, adding that the lack of inventory isn’t likely to be solved in the next year.
“With the announcement of Apple coming to the Triangle and all the affiliated businesses that follow Apple into all the emerging markets, I suspect the inventory issues in the Triangle will continue throughout 2022,” said Allen. “We are going to see more appreciation in home values.”
What’s this mean for buyers and sellers?
“Consumers who are waiting for the market to cool to get into it are often passed by,” said Matt Fowler, who recently accepted a position as the executive director of TMLS.
“It’s almost like trying to time the stock market. A responsible investment advisor would advise against that. They would tell you to put a certain amount in the market every month regardless of whatever the index would sit at currently,” said Fowler. “We could make the same argument about real estate. There are cycles, but we can’t predict them.”
“Historically, the highest value of the year is achieved in June. Typically, it’s just when most houses sell, but that’s not what we’re talking about with market timing,” said Fowler. “These numbers right now are blowing all of the historic stats out of the water.”
Because of that, said Fowler, buyers who are ready and able to buy should consider buying based on their own family’s timeline, rather than waiting to see if the market will shift.
And even if there is a shift in the real estate market nationally, all real estate markets are local, said Fowler, and the Triangle’s markets aren’t likely to align to the trends shown in nationalized data.
TMLS covers 16 counties, Fowler said, and in each of those counties there are different economies. “They each have their own economic base, characteristics, trajectory and momentum,” said Fowler. “We won’t be in step with the national economy, because of this economic relocation that is happening coming into the Triangle region,” said Fowler.
“It’s almost like we’re benefiting from a base realignment and closure that the military goes through, but this is a corporate realignment and closure, where companies like Apple and Google and Toyota are investing in historically unprecedented levels,” he said.
Waiting could come with additional cost, especially for first-time homebuyers, because rental rates are expected to increase in the Triangle, as well, even as they cooled a bit in November for some rentals.
“Don’t think about that too much, but find something that will work for your family’s way of life, and understand that every dollar put toward a mortgage, that some of it is coming back to you,” said Fowler.
Fowler told WRAL TechWire that a large part of his role in leading the organization will be focused on evangelizing homeownership opportunity.
“Millennials and GenXers may think real estate is a shell game where people take your rent money,” said Fowler. “It isn’t, it actually is the only path toward wealth creation that most Americans have today.”
While the rapid price appreciation of real estate, both nationally and in the Triangle, over the prior two years is atypical based on historical data, real estate does tend to appreciate over the long run, said Fowler, though noting that there are cycles in the real estate market that are unpredictable and may or may not align to economic or business cycles.
“If you don’t invent something or you don’t have a high-paid profession, you’re probably going to make the most of your wealth by living in the house that you bought, and if you don’t buy it, you’re always paying someone else’s mortgage payment,” said Fowler.
“Current property owners have been empowered, dramatically, by this market,” he added. “My own personal experience is that I sold a property that was highly appreciated, and bought another one without a mortgage.”
“If you’re willing to downsize, if you’re willing to move out a little farther, this could be a tool to reduce or even eliminate debt,” said Fowler. “Just like when you sell your stock when it is highly appreciated, this is an opportunity, certainly, for people to capture that gain, while the market is where it is.”