July has been an interesting month in real estate activity in the Raleigh and Durham region of North Carolina. The number of listings is up, as are the number of sales, while days on market has started to shift due to some new rules with the Triangle MLS. A merger with the Longleaf Pine MLS has also added to some shifting numbers. Those numbers will increase again when the Triangle MLS absorbs the Burlington-Alamance MLS in the next few months.
For active listings, I track the number of listings in 16 counties: Chatham, Durham, Franklin, Granville, Halifax, Harnett, Johnston, Lee, Nash, Orange, Person, Vance, Wake, Warren, Wayne and Wilson counties.
Active listings in July began right at 4,000 listings in those 16 counties. By the end of the month, that has increased to 5,174, a 29.3% increase in active listings. During that same period, the median pending price of properties under contract was down from $395,000 to $385,000.
The sold data reveals to us that the median closed value was also $385,000 in the month of July, which means that most homes are no longer selling for the insanely high, over list price numbers we saw six months ago.
That is attributable to a couple of things; 1. Fears of higher interest rates have eliminated some people from buying a home and 2. Fears of a real estate crash (not happening but it is a fear).
Days on the market has also increased slightly from 14 to 17 days average and from 6 days to 8 days median. This is likely because of a new rule in the Triangle MLS regarding Coming Soon listings. Realtors can no longer market a listing as Coming Soon without it counting against the days on market counter. That has changed marketing strategies for many agents while some are still adjusting.
When the data is analyzed, there is still only 1.5 months of inventory available at its peak. Although we are seeing more listings on the market, the number of pending sales has remained consistent. Back in March, the Triangle MLS only has 2 weeks of supply. The $385,000 median price is not because homes are going down in value, but more because fewer luxury houses are selling as quickly. That shift is apparent when the average sale price in June 2022 was $538,286 and July 2022 was $441,140.
Prices are driven by demand. In order for the Triangle to have a balanced market, there would need to be over 18,000 listings and the market is far from that.
We are beginning to see builders offering incentives again to potential buyers. The same builder that said, “Here is your spec home, take it or leave it, and you have to pay your agent because we won’t,” a year ago is now paying the buyer agent top dollar and offering package incentives to compel buyers to sign on the dotted line.
In addition, the crazy Due Diligence fees that have been seen in the last 18 months are starting to come back to reality. A court case finalized in June 2022 reinforced that the seller keeps all of the Due Diligence Fee. Read more about that case here.
All in all, the real estate market in the Triangle is healthy and still tilted towards the seller. A balance is starting to appear but it is not a quick shift like normal. Historically, shifts happen very quickly. With the Fed upping rates by 75 basis points two months in a row to curb inflation, and with the administration trying to avoid talk of recession, the market has slowed a bit. However, it is still a good market to purchase as prices should continue to go up over the long term.