Are Home Prices Falling in North Carolina?

Are you looking for a home in North Carolina? Well, it’s not an easy task in this tough real estate market. High interest rates and sustained low inventory are making it challenging for buyers to find the perfect place. 

North Carolina remains in a “seller’s market,” where the homeowner has more of an advantage. The numbers show a relatively high sale price and fast speed-to-sale. But in a state twice the size of Ireland, there’s a lot of ground to cover, and every metropolitan statistical area (MSA) is different. So we dove into the data to see where local real estate prices are moving in North Carolina. Are there any areas where prices are going down, creating a better opportunity for buyers? Let’s find out!

North Carolina areas with declining home prices

The recent numbers from North Carolina reflect what we see in many states in the southeast and along the coast: slightly higher prices and slower home sales. Redfin data shows a 2.9% increase in median home prices between May 2022 and May 2023, moving the median price to $371,100. But the number of homes sold dived to 14,007, a 16% downturn from the previous year.

One area where North Carolina may be doing better than neighbors like South Carolina? The speed at which homes sell. While North Carolina homes took longer to sell in May 2023 than in May 2022, the eight-day increase was modest compared to some other states. Now at an average of 32 days on the market, it suggests the North Carolina real estate market may be more robust than in states like South Carolina.

Given that home prices generally increased, it isn’t always quite so easy to find places in North Carolina where prices are trending in the other direction. However, we did find a couple of areas worth highlighting. In Lockwoods Folly Township, prices decreased 4.5% from a median of $436,000 to $416,500. In Supply, North Carolina, prices fell even more starkly, from $557,000 to $491,100. That’s an 11.8% decrease. Both are in Brunswick County, south of Wilmington.

These weren’t the only areas with falling home prices in North Carolina. Raleigh Township saw a 9% drop in home prices between June 2022 and June 2023, while Neuse Township decreased by 1.2% in the same period.

A few more areas with declining median sale prices as of May 2023:

• Triangle Region (Raleigh-Durham-Chapel Hill) down 2.4% YOY to $410,000 and 0.4% year-to-date (YTD)
• Johnston County (southeast of Raleigh) down 2.6% YOY to $364,765
• Orange County (Hillsborough and Chapel Hill) down 9.5% YOY to $475,000 and 4.6% YTD
• Iredell County (outside Charlotte metro, Mooresville, Statesville) is down 11.1% YOY as of June 2023 to $385,000
• Carrabus County (Concord, Kannapolis) is down 3.4% to $375,000
• The City of Cornelius, NC, dropped 12.6% to $450,500.

The big picture on North Carolina real estate

NC Realtors provided data earlier in the summer of 2023, giving a snapshot of what’s happening in the North Carolina market. The data said a lot about what’s going on statewide as well as what’s going on in the housing market across the entire country.

• North Carolina home listings fell 4.8% year-over-year between April 2022 and 2023. That continues a trend dating to the pandemic. Home listings topped out at 62,401 in April 2020. In the intervening time, they’ve shrunk to 43,838. 
• North Carolina home sales decreased significantly, down 22.5% from April 2022 to April 2023. Home sales are about where they were in April 2020 at the height of the pandemic, which shows how sluggish these numbers are. Total home sales are significantly down over the past two years, having been as high as 17,042 home sales in April 2021. Now they’re at 12,297.
• The median sales price on homes overall showed a 4.4% year-over-year increase. While the median North Carolina home price in April 2022 was about $290,000, it moved to over $300,000 in April 2023. This is fairly typical of the state: home prices have been stable and even increasing slightly. In contrast, the availability of homes remains relatively low. Sluggish sales and increased time spent on the market are showing some cracks in the housing market.
• Inventory data suggests that there isn’t much home availability in North Carolina. Six months of inventory indicates a balanced market, but North Carolina inventory averages about three months’ worth of inventory. 

North Carolina has many regions where home sales continue to show high activity. Home prices align with this data, keeping the state’s overall median sales price relatively high. That’s good news for North Carolina homeowners, who can keep a fair amount of equity in their pockets. 

When will home prices fall?

But looking around the broader marketplace, it’s clear that interest rates are affecting North Carolina. Low inventory data suggests existing homeowners prefer to stay in place if there isn’t a good reason to move. 

When they list, the data suggests that it may take a little longer to sell in 2023 than in 2022. High mortgage rates could be a contributing factor. The current mortgage rates can make it more difficult for home buyers to afford monthly payments and the overall loan, limiting the buyer pool at specific price points. This in turn may lengthen the average time a house spends on the market.

We’ve identified some places where lower home prices may present an opportunity for home buyers, even in North Carolina. Though the state has healthy prices across multiple regions, there are still opportunities to find bargains in the state if you know where to look.