Wake County real estate market remains strong even as economy shows signs of volatility
RALEIGH- Real estate values in Wake County continue to rise, despite recent growing volatility in local labor markets, rising mortgage interest rates and slowing lending activity, according to new data from the Wake County Deeds Registry.
The median sale price of all real estate parcels for transactions recorded in June 2022 in Wake County was $470,000, another record high, according to the report.
That’s an increase of $8,000 from the previous month. In January, the median sale price was $410,000 and in June 2021, the median sale price calculated by the Wake County Register of Deeds was $383,000.
“It’s an illustration that the supply and demand economy is really strong,” said Dr. Gerald Cohen, chief economist at the Kenan Institute, in an interview with WRAL TechWire. “Housing is all about locality, and we’re in an environment where demand is really high and supply is limited.”
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What is happening
Partly to combat rising inflation, the Federal Reserve has moved to raise interest rates, which may also impact mortgage markets.
For example, typical mortgage interest rates nearly doubled in 2022.
And in response, lending activity in Wake County appears to have declined from a year ago, when there was a growing gap in the real estate market. Now, the latest Deed Registry data shows the gap has nearly closed, which “indicates that the refinance market continued to cool in June 2022,” the report noted.
This is a case study of the Federal Reserve’s intentions, Cohen said. But the Fed also faces a challenge, because although it is already aware that the supply of housing is limited nationally, it can only take measures likely to influence market demand by making borrowing, including funds for mortgages, more expensive.
“What they’re doing by raising rates is hurting that because they’re trying to soften demand, but they can hurt supply as well,” Cohen said.
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The value of the real estate market is also increasing
Yet locally in Wake County, the overall value of real estate transactions continues to grow each month, even with seasonal variations in the real estate market.
Total market sales value topped $2.5 billion in June 2022 and was up 11% from May, when total volume was around $2.25 billion, according to the report.
This is partly due to the fact that 6.9% more deals were closed in June compared to May.
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Predict the future of the real estate market
The Triangle’s housing market remains resilient even as other “pandemic boom towns” nationwide show signs of a market slowdown in recent weeks.
North Carolina’s real estate market is resilient as there are municipalities, including some in Wake County, that are still experiencing positive net migration, as WRAL TechWire reported last week.
The latest data from the Triangle Multiple Listing Service, TMLS, also shows that median home sales prices are rising. The chart above tracks the median selling price of traditionally sold homes, including new construction and existing homes, across the TMLS 16-County area as well as Wake County, and is shared with permission. TMLS.
“It takes time for increases in mortgage rates to show up,” Cohen said. “Rate increases will impact housing nationally and may impact housing locally.”
So what could be happening in the Triangle?
“What I believe is that we will see a slowdown in activity, some slowdown in price gains, potentially, and month-to-month we could see declines due to seasonality” , Cohen said. “But am I afraid that this will turn into a rout? Nope.”
Editor’s note: What is your experience of the Triangle real estate market? Share your story.