Triangle sees a ‘shocking’ decline in the number of starter homes for sale
The Triangle housing market’s start to 2019 has been a “mixed bag” so far.
While sales were still down in the first month of the year, conditions in the housing market have improved since the slowdown at the end of last year, when a combination of bad weather and rising interest rates began to weigh on demand in the region.
“This January was slower than the last January,” Sharon Webb, of Webb Realty at Coldwell Banker Advantage, said in a phone interview. “But it almost seems like we are a month behind” from where we usually are.
However, Webb added, a drop in mortgage interest rates has revived some demand in the past month.
“In February it picked back up and interest rates have dropped,” said Webb, who mainly operates in the North Raleigh market. “That has spurred the market.”
Mortgage rates have indeed been on a steady downward trajectory since the end of last year. Rates peaked on Nov. 15 of last year, when a 30-year fixed-rate mortgage came in at 4.94 percent, according to Freddie Mac.
But, as of March 21, the mortgage rate had fallen back down to 4.28 percent, and the Federal Reserve appears to be less likely to raise interest rates in the coming months. In practice, that leads to smaller monthly payments on mortgages for buyers.
While he still sees the beginning of the year as a “mixed bag,” Stacey Anfindsen — a Cary-based appraiser with Birch Appraisal, who puts together the monthly Triangle Area Residential Realty Market Report — said the drop in the mortgage rates has been a relief.
“Most of the things I see now is that the Fed is going to stop messing with interest rates, so mortgage rates are going to be stable,” Anfindsen said in a phone interview. “Last year we had to worry about both (increasing rates and prices), but this year it is just the prices.”
The average sales price in the Triangle in February was $299,385, a 3.1 percent increase from the same month last year, according to Triangle Multiple Listing Services. A big part of rising prices, Anfindsen said, is the dwindling number of new homes being built or sold below $300,000.
Ebony Rogers, who works for the state government in downtown Raleigh, was among those who bought a house in the beginning of this year. After years of renting in the area, Rogers, 37, said she closed on a newly built home in Knightdale for a little more than $300,000 at the beginning of this month.
Rogers, like many, was motivated by rising prices and a fear that if she didn’t jump into the market, the house would only get more expensive or be bought by someone else.
“With everything that is coming into Wake County I didn’t want to wait any longer,” said Rogers, who chose the house in Knightdale so her son could stay at the same school. “I also loved that house, and I didn’t want to miss out.”
Rogers said she was actually able to purchase her home below the asking price — something that has become increasingly rare in the Triangle, with many homes attracting multiple competitive offers. Rogers said she didn’t think there was anyone else bidding against her.
That’s not altogether unusual for new construction in suburbs, Webb said.
“I would say under $300,000, there is going to be multiple competitive offers,” she said. “There’s a lot of people looking (in that range) and not a lot of inventory. If it’s more than $300,000, it depends. There are pockets where there are a lot of offers and pockets where there are not.”
Anything in Cary, Northwest Raleigh or inside the Beltline will have a lot of interest, Webb added. Anfindsen noted that parts of Durham and Southeast Raleigh — two places where concerns over gentrification have been raised — will also continue to attract a lot of attention because they still have “more lower-priced housing units” than other parts of the Triangle.
Webb said the housing market should start picking up more momentum in the next two months, especially now that sunset is later in the evening, allowing more people to search for homes after work. Webb said she anticipates that, in the end, her team of five realtors will end up matching the number of sales it had last year.