Raleigh is forecast to outperform most metros in 2023, according to a report released from the National Association of Realtors (NAR) this week.
News & Observers
Despite a cooling US housing market, Raleigh is expected to outperform most metro areas in 2023, according to a new report from the National Association of Realtors.
The City of Oaks landed the No. 2 spots, just behind Atlanta, on the association’s list of markets to watch next year. Key metrics include housing affordability, employment conditions and population growth when compared to the national average.
“Although this area is less affordable, more than 20% of the renters can afford to buy the typical home,” the report said. “The job market is robust, and it’s not slowing down anytime soon. Data shows buyers have more options in this area as a single-family permit is issued for every three new jobs.”
Rounding out NAR’s top five are Dallas; Fayetteville, Arkansas; and Greenville, South Carolina.
“The economic conditions in place in the top 10 US markets, all of which are located in the South, provide the support for home prices to climb by at least 5% in 2023,” Lawrence Yun, NAR chief economist and senior vice president of research, said in the report.
Outside of those hot spots, annual median home prices are expected to tick up just 0.3% — following a 9.6% gain in 2022 — to reach $385,800, NAR said. “Half of the country may experience small price gains, while the other half may see slight price declines,” Yun said.
On the rental front, Yun expects prices to rise 5% in 2023, following a 7% increase in 2022. He predicts foreclosure rates will remain at historically low levels in 2023, consisting of less than 1% of all mortgages.
NAR’s forecast comes on the back of a roller-coaster year in the Triangle housing market that saw a massive spike in house prices. At its peak in June, house prices were up 17.8% compared to last year, selling for a median price of $421,757, according to the Triangle Multiple Listing Service June market snapshot. Amid rising inflation and mortgage rates, prices cooled to $395,000 in October — but that’s still up 8.2% over last year.
“Local home listing prices are coming down from this summer’s peak,” Jay Nelson, the communications director for the Raleigh Regional Association of Realtors, told the N&O.
Unemployment in Raleigh is lower than it was pre-pandemic, he added, and home inventory has increased 188% in the last 12 months. “These are just some of the factors that should give Realtors reason to believe that our market will perform well in 2023.”
John Wood, owner of Re/Max United in Cary, who has been an agent in the Triangle since 1988, said he expects average prices of closed homes to be “flat to a little lower” than the peak in early 2023. “We expect home appreciation to fall more into our normal trends in 2023 to around 5% annually,” he said.
Stacey Anfindsen, an Apex appraiser who analyzes MLS data, stressed that prices can vary greatly across submarkets in the Triangle.
“All real estate is local. It’s not a catchphrase,” he said. “In some submarkets, house prices have gone down; in others, they’ve gone up. If you’re a seller or a buyer, you must be hyper-focused on your submarket, and the supply and demand within that.”