Wake County & Raleigh NC Real Estate Market Conditions

Are you are concerned about a possible real estate bubble in Raleigh? " The National Association of Realtors Research Division recently conducted a home price analysis in the Raleigh-Cary MSA. The reports concluded that there was very little danger of a housing market bust in this region. In fact, the reports stated that local housing markets were in excellent shape with a potential for significant housing equity gains, particularly for homebuyers who plan to remain in their house for the long run. Additionally, local markets had very favorable home price-to-income ratios and even better mortgage servicing cost-to-income ratios. The latter ratio is currently below the local historical average implying no widespread financial overstretching to purchase a home in the region. As a point of comparison, the US workforce grew at 1.47% and the Raleigh/Cary MSA workforce grew at 3.892%. These respectable gains in the job market could translate into substantial home price gains.

Q12007 Update:
-Current Wake County appreciation rate is 4.29%.
-Average re-sale price of all housing is $238,000
-Average price of new construction is $312,000.
-Average DOM is 73.
-Sweet spot for inventory in N. Raleigh/Wake County is between $200k and $400k. The supply is less than 2 months and down substantially from a year ago.
-Sweet spot ITB is anything less than $400k. The inventory is down substantially and the supply is less than two months with many price points at one month of inventory or less.
-Resale closings in the Triangle were up a modest 2.5% in March, comparin 3/07 w/3/06 while the rest of the country has seen a spike in overall inventory and decline in closings.
-The current supply of inventory in the Triangle TMLS stands at 6 months, while nationally inventory stands at an average of 7 months.
-In 2006 there were 140 homes that closed above $1Million.

The biggest challenge in 2007:
1. People moving to the area that still have to sell their homes in other areas prior to relocating.
2. Tighter lending restrictions due to the collapse of the sub-prime lenders.