North Carolina Real Estate Market Update

 

Mid-Year Update: North Carolina Home Sales

Nationwide home sales in the second quarter of 2024 started optimistically, but persistent high interest rates and inflation tempered home sales. The North Carolina real estate update reflects this in what happened with its housing market in June. Here’s how market dynamics are changing.

Active Listings

More homes were for sale in the second quarter. April had 7% more than last year but was still down from its 2021 peak. May reported almost 10% more active listings, while June increased 12.2%. The increase in homes for sale is a combination of more new listings and homes spending more days on market until sale. The options for buyer are at the highest levels in three years.

Closed Sales

Closed sales rose marginally to start the quarter, up 2%. Signs of trouble arose in May when sales slipped 1.4%. They nosedived in June, dropping 19% year-over-year.

North Carolina was not the only state to report this drastic pump on the brakes in sales activity. It came after months of sustained high mortgage rates, followed by a Federal Reserve meeting that did not lower its basis rate as many had hoped. That impacted consumer confidence.

Median Sales Price

The continued housing affordability challenges are another factor behind the significant drop in closed sales. In North Carolina, home prices continue to climb, but the pace of change has slowed. Home buyers paid 3.5% more year-over-year in April but only 2% more YOY in May and 4% in June. The median price by the end of the month was $374,700. On the bright side, it’s still well below the national median of $427,000 for the quarter.

Supply of Homes

The North Carolina housing market is growing closer to balance, with a 4.09-month supply of inventory. It stepped to 4.21 months in May and 4.23 months in June. A balanced market of six months is on the horizon. If sales activity remains slow and the prospective buyer pool is small, it could be achievable by the end of the year.

Housing Market Forecast

Even though activity hasn’t been what market experts anticipated for 2024, at the midyear mark there is still some optimism. The general feeling is mortgage rates will come down, even if at a snail’s pace. Any changes to interest rates will increase buying power. That could encourage even more new listings, and bring the market closer to balance.

 

Q1 2024: Higher Prices Slowdown North Carolina Home Sales

Experts had high hopes that the new year would bring lower interest rates and, with them, more sales activity. The updated North Carolina real estate figures show that that hasn’t been the case. 

Listings Finally Rise By End of Quarter

The new year began with fewer listings on the market in North Carolina. The available homes for sale in January were down 5.4% year over year (YOY). That drop continued into February when real estate listings were down 5.1% year over year. March finally reversed that trend, as the number of listings grew 5.5% yearly. 

However, spring is a busier time of year to list homes in North Carolina. Those properties start to come on the market in March.

Sales Activity is Down

Home sales slid 5.3% in January, and that year-over-year slowdown in activity persisted across the quarter. February reported almost 6% fewer home sales than last year. Closed sales were down YOY in March by about 13.3% fewer. 

But, on a month-to-month basis, home sales did increase. Two urban markets, Charlotte and Raleigh-Durham, saw their sales activity grow year-over-year. 

Median Sale Prices Keep Rising

Buying a home cost more in 2023, and that pricing trend maintained steam this quarter. January reported a median sale price of $306,705, up 9.4% year over year. At $310,036, the median sale price bumped up 10.6% in February. Median sale prices increased 7.1% to $312,881 for March. Not only did prices increase year over year, but each month brought higher prices, too. The bump should help homeowners looking to set a competitive list price.

Inventory Levels Slowly Increase

Despite fewer listings overall, each month reported gains in the month’s supply of inventory. From 3.4 to 3.5, the quarter ended with 3.9 months of supply. Balance is considered six months. 

Despite the increase in interest rates during the quarter’s final month, North Carolina home prices keep rising. Buyers did have a more comprehensive selection of homes. However, the steeper home prices and the interest rate hikes contributed to a slowdown in home sales.

Q4 2023 Continues With Low Listings

Fewer listings persisted in North Carolina as the year came to a close. The final report on the North Carolina housing market for 2023 shows the state’s trends kept pace. All three months in the fourth quarter demonstrated consistency, with a nearly 7.8% drop in listings on the market and a 7.5% increase in the median sale prices. 

Month-to-month, North Carolina real estate activity played out as follows: 

October 2023

New listings continued their year-over-year (YOY) downward slide. In the fall, about 9% fewer listings were on the market than in October 2022. Coinciding with that was another month where sales activity declined, this time by 13.7%. Homes stayed on the market longer, leaving the month with a 3.6-month supply of inventory.

However, demand remained steady, pushing the median sales price up 6.2% YOY to $306,614. List prices for North Carolina homes are on the rise.

November 2023

Yet another month reported an almost 9% decline in the listings. Sales activity reduced by 11.6% YOY on the heels of multi-decade highs in mortgage rates. The market had a 3.5-month supply of inventory, a change of 14.3% from November 2022. 

Meanwhile, the median sale price of $313,410 represented 8.3% growth over the prior year.  

December 2023

As the year wound to a close, listings still tracked downward but by only 6.4% less than last year. Sales activity dropped 13.6% YOY. With fewer listings, the remaining inventory sat at 3.3 months to close the year. Statewide median sales prices were up 8.2% year-over-year to $303,244. 

For the year’s final month, nearly every North Carolina real estate market saw sales activity reduced except for Mecklenburg County and the Wake County–Charlotte and Raleigh metros, respectively. Greensboro and Fayetteville were relatively neutral.

Looking into 2024

The fourth quarter performance shows North Carolina still has enough buyers to keep pressure on housing prices, even as the inventory declines. How much longer this will continue depends on a combination of factors. Already, the Federal Reserve has kept its basis points stable in its first meeting of 2024. That could encourage a stabilization or slight decline in market mortgage rates over the year. A bump in affordability may stimulate sales activity in 2024, but nowhere near the frantic pace of 2021. 

 

Fall 2023: Inventory increases, but so do sale prices 

As the leaves began falling across North Carolina in the third quarter of 2023, nationwide sales trended downward, and median sales price growth slowed. Did our local real estate also follow the national trend? Let’s find out in the most recent North Carolina real estate update.  

The big picture

Starting July 2023, statewide listings for residential properties were down almost 21%. In fact, North Carolina had nearly 10,000 fewer listings than in July 2022. In this case, buyer activity dropped by about 25% year-over-year (YOY), but homes were still selling. The month had a median sales price of $315,469 as the inventory reached a 3.2-month supply. Keep in mind that a balanced market is considered six months.

The trends continued in August 2023, when the available number of listings YOY dropped by about 16%. The continued low supply of homes for sale impacted total sales activity, with an 18% drop from August 2022. Statewide, the market inventory grew to 3.44 months, but pressure persisted on the median sales prices. Buying a home was 4% more expensive than August 2022. Still, the median sales price of $306,765 was well below the national average of $407,1000 at that time.

September 2023 is when the North Carolina real estate market started to get a little more interesting. Even though there were 10% fewer listings on the market, it had more homes for sale than the prior two months. Lagging sales persisted, tanking 26% year-over-year. Pressure pushed the median sales price to $310,073, a 7% increase from September 2023.

North Carolina closed the quarter with a 3.6-month supply of inventory, showing the buyer pool remains low even if fewer listings are coming to the market. You can see what homes are available currently at EZ Home Search.

Future sales activity

The local market experts expected this trend to persist into the fourth quarter of 2023. That means outside of the greater economic factors, new listings will remain low while the limited supply impacts the median sale prices. Still, sales price growth is far from the double-digit numbers reported during the pandemic year and is stabilizing.

North Carolina is a growing state that needs more homes and inventory to stabilize its overall market conditions. The months’ supply of inventory and days on the market until sale are likely to keep growing if mortgage rates remain high for the rest of the year. Those rates will keep the buyer pool smaller.

 

 

Summer 2023: Inventory grows, but low numbers keep sales sluggish

The nation’s real estate sales activity through the summer has been trending towards fewer listings and fewer closings but stabilizing median home prices. The continued higher mortgage rates are putting a damper on sales. However, enough buyers are still looking that it’s keeping pressure on markets. But each region is performing differently. How does the North Carolina real estate market stack up? Let’s look at its performance over the summer.

 

June 2023

The summer season kicked off with a 19.1% year-over-year (YOY) plummet in total listings across North Carolina, according to data from its real estate association. While quite the fall, the available homes for sale were up from May 2023. There was a 3.04-month supply of homes.

Still, it wasn’t enough to increase sales activity, down almost 22% YOY to just under 14,000 closed sales. Demand sustained price growth; home buyers paid 4.5% more this year in June 2023 with property prices at a median $311,364.   

July 2023

In the dog days of summer, North Carolina’s available listings tanked 21% YOY at 41,048 available homes, which was still more than June 2023. However, the shrinking inventory continued influencing sales activity data, dropping statewide by 25% year-over-year in July 2023. 

Buying a North Carolina home costs a median of $315,469, up 2.6% YOY and more than last month. At a 3.2-month supply of inventory, the state remains a seller’s market.  

August 2023

Statewide for August 2023, North Carolina matched the nationwide trend. Listings may have been up from the prior month but were down 15.5% year-over-year. The result is the state now has a 3.4 months supply of homes, bringing it closer to that six-month balance benchmark.

Sales were also up from the prior month but down for the year. The overall sales activity fell by 18.4%, another three-year low. Activity is partially held back by the low inventory statewide, but the higher mortgage rates aren’t helping. People would instead hold onto their low rates than list and pay more money to buy another home. 

Some relief is on the horizon when it comes to home prices. The median sale prices didn’t grow as dramatically, only 3.6% year-over-year, and were down from July. Home buyers paid a median of $306,765 to purchase a North Carolina home in August 2023, the lowest number of the summer season.

As should be expected, the highest sales prices were in the state’s metro areas, in the Raleigh-Durham, Charlotte, and Wilmington markets. Asheville and the mountains also had higher median sales prices, as did counties near the Outer Banks.

The more rural counties, such as around Greensboro, Greenville, and Fayetteville, fell on the other side of the number line, with homes under the statewide median sale price.

So, as summer closes, the North Carolina real estate market matches the nationwide trend of steadily increasing median prices but sluggish sales activity and fewer listings. Continued economic and interest rate stresses will likely keep the market in this trend through the fall months.