Chatham, Durham, Franklin, Harnett, Johnston, Orange & Wake Counties
March set several records including year to date closings, overall average sales price and re-sale average sales price.
February was the first month since December of 2019 where the national average for a 30-year fixed rate mortgage increased compared to the prior month. The increase had a subtle influence on market metrics, most notably in the pending listing category. While the slight uptick in interest rates carried over into March, the slightly higher interest rates did not douse the enthusiasm for home purchases.
Inventory Still on Downward Trajectory
The number of homes available for sale, both in terms of resale homes and new construction continues to slide, with double-digit decreases during the first two months of the year, along with decreases in the three of the last four months.
Comparing March 2021 with March 2017, month-end inventory is 269% less and framed new home inventory is 253% less.
There are several reasons behind the decrease. Additional costs and delays associated with purchasing land, supplies, and permitting delays have hampered builders. There have also been delays in securing building materials, appliances, paint, etc due to the weather issues in Texas and the other southern states, along with supply impacts caused by the ongoing COVID-19 pandemic.
Resale Market En Fuego
Just when I think metrics have peaked, January – March produced another eye-popping month for re-sale listings. One of the statistics that sticks out when looking at the detailed report the number of re-sale listings that sold above the final list price.
% of re-sales sold above list price
What is behind the increase in this metric? The answer is due to the high buyer demand for homes in this segment and the lack of alternatives, both for new home construction as well as re-sale homes.
Between January 2020 and March 2021, 52% of closed listings were priced at $350k and below. Most consider this segment of the housing market as being the core price of housing demand. As of the end of March, there were 303 active listings were priced at $350k and below; 25% were new construction. Of the 303 total, 54% are detached and 12% of those are new construction.
The pie gets smaller when filtering for detached housing. Due to increased land and development costs, it is almost impossible to produce a detached residence priced at $350k and below much of the Triangle area. Of the 303 active new home listings priced at $350k and below, less than 1% are categorized as detached.
The lack of new construction alternatives produces a sub-market that is almost entirely re-sale and thus dependent on sellers to sell. If the number of buyers moving into our area outpaces the number of sellers moving out, the under-supply of housing priced under $350k will continue. For the foreseeable future, buyers in price points below $350k will be leaning on a buyer strategy of high due diligence fees, waiver of inspections, and offers well above list price.
Closed listings with reported multiple offers accounted for 23% of closed re-sale listings in March, an increase from 10% in March of 2020. Of these sales, the average premium above list price was 5%, with ranges between 1% and 18%. These numbers have intensified in each of the last several months, despite the increase in mortgage rates. These conditions will continue to place upward pressure on price metrics which are
predicted to increase for the remaining months of this year.
About Log Pond Realty
Home is where your story begins. Home is where hopes and dreams are born, memories are made, and lives are lived. We would love the opportunity to assist you in writing your new story.
We service the Triangle region of North Carolina including Raleigh, Cary, Apex, Holly Springs, Morrisville, Fuquay-Varina, Durham, Chapel Hill, Wake Forest, and Garner.
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