The North Carolina Housing Market is seeing a slow but steady increase in the past year in home values, and housing market predictions have this number rising still by this time next year. North Carolina is currently one of the fastest growing states in the country. In addition to its lifestyle and affordability, North Carolina boasts a strong job market. Most notably, NC’s strong market revolves around the technology, sciences, and education industries. North Carolina is also home to a major banking center in the city of Charlotte. The state now ranks third in the country as a major filmmaking location. North Carolina experienced an increase in nonfarm payrolls by 2.8%, outshining the national increase of only 2.3%. And, with job growth comes increased housing demand.
The housing boom and bust hit North Carolina less severely than that of the rest of the country. Home prices dropped less dramatically so the resurgence has also been less dramatic during the ensuing recovery. Home prices in the North Carolina housing market only stand 4.8% below their pre-recession peak compared to the national average (which sits at a whooping 13.4% below the pre-recession peak). Let’s examine some of the factors in predicting the North Carolina housing market trends for 2015. We’ll also be looking into key North Carolina real estate areas that are experiencing significant growth trends. These areas include Asheville, Charlotte, Raleigh, and Wilmington. Click here to compare these numbers to the 2013 North Carolina housing market.
Influencing Factors for the 2015 North Carolina Housing Market
North Carolina currently holds a median home value of $146,500, which is a .4% increase over the previous year. According to Zillow, housing market predictions have this increasing another 3% by this time next year. That means that the same house that is valued at $146,500 could be worth $150,000 in 2016.
- The median sale price for houses is $171,725. This could be a sign that as more young professionals enter the housing market the higher end houses are outselling those of lower value.
- The percentage of delinquent on mortgage is 5.2%, which is lower than the national average of 6.3%. This occurs when the homeowner cannot make their mortgage payment. Mortgage delinquency is often the forerunning factor leading up to a foreclosure.
- North Carolina home values will be impacted by foreclosures for the foreseeable future. The number of homes foreclosed per 1,000 is 3.8, slightly below the national average of 3.9. Foreclosures can be a great pickup for cash buyers, as banks will be looking to get something in return for their investment. However, foreclosures can be tough for homebuyers to get approval for a mortgage loan. Vacant properties tend to affect surrounding home values negatively.
- Houses spend an average of 126 days on the market. This time last year the average number of days a house stayed on the market was 94 days. While this may seem like cause for alarm this number has fluctuated frequently in the past 5 years. The overall trend is that houses are spending less time on the market.
- 1% of homes have negative equity, meaning the homeowners owe more than their house is worth. This may be due to homeowners still taking on a large mortgage from before the real estate crash and have not refinanced, or simply homeowners who paid more for their home simply due to demand.
- Median sale price per square inch is $102, down from $105 a year ago.
- Interest rates on mortgages look to remain relatively low this fiscal year, following the national trend. North Carolina is averaging 3.9% on a 30 year fixed mortgage. The national market average is 3.93%.
- Investors can look to take advantage of increased rental prices. North Carolina averages $1,127 per month in listed rental prices. These prices continue the upward rental price trend seen in North Carolina the past four years when the average was $973 per month in 2011.
Best Places to Live in North Carolina
“Forecasters generally agree Charlotte has fully recovered from the Great Recession and is expanding once again,” says Adam O’Daniel of the Charlotte Business Journal. According to Zillow Charlotte NC has a home value index of $148,300. Charlotte North Carolina real estate reported a significant slowdown in home value appreciation last year. At the end of 2013 the home value appreciation was showing a year-to-year increase of 7.8%. So while a drop to 3.3% might seem like a large decrease the Charlotte real estate market has rounded out to a more modest pace; the current rate could not be sustained much longer.
At the beginning of this year the average sale price for the Charlotte market was around $227,000. The conforming loan limit for Mecklenburg county (where Charlotte is located) is currently $417,000. Mortgage loans that can be sold to Freddie Mac and Fannie Mae cannot exceed this amount. This is a good sign for buyers. When loan limits are higher than median prices, as they are in Charlotte, anyone buying a home should be able to find a reasonably sound real estate investment within the conforming loan limits. To put it in layman terms, buyers using standard mortgage financing have plenty of options when shopping for a house.
So how will home values do this year? The general consensus is that prices nationwide will increase more gradually in 2015 compared to last year. The number of homes for sale in the Charlotte market rose by over 8% over the last 12 months. This is another contributing factor for anyone buying a house in Charlotte to have more options to choose from. So the takeaway is that home prices in the area are expected to rise throughout this year but not as much as in previous years.
Charlotte saw an unemployment rate that peaked at 12.6% in 2010. Since then, the rate fell below 6% today. Charlotte is the second-largest banking center in the nation behind only New York City. This strong economy draws in young professionals from around the country. The strength in the local economy puts more people in a position to buy a home and adds another positive trend for Charlotte as economic strength drives housing demand.
We expect mortgage rates to remain below 5%, home prices to increase, and Charlotte’s economy and job market to steadily improve. “We’re looking at the best year in terms of economic growth that we’ve had in almost a decade,” says N.C State economist Mike Walden. All of these contributing factors make Charlotte one of the best places to live in North Carolina.
Like Charlotte, Raleigh North Carolina real estate has seen a significant increase in real estate and the economy. Both cities have led the recovery for the past couple of years and outgrew the rest of the state from 2010 to 2013 according to the Wells Fargo Economic Outlook for 2015. Zillow has a home value index for Raleigh to be $185,000. Predictions look for the housing market to continue to increase with the urban market set to see the most improvement. Both Midtown and Downtown Raleigh have seen many revitalization projects over the past few years. As a result many more shopping, dining, and entertainment venues have begun to appear. The commercial real estate vacancy rate has elevated but this is due to the completion of several retail spaces in anticipation of the increase in revenue. With a surplus in young professionals and families making their way to the metro area more condominium and rehab projects are expected. This trend means that average sale prices in Raleigh will continue to rise.
Asheville North Carolina Real Estate experienced quick home price gains following the recession but home price appreciation has slowed in the past year. But despite the slight stagnation in home appreciation sales activity increased and home sales rose 5% last year. This is in large part due to the increase in population. Asheville is expected to add 50,000 residents by 2030 according to Citizen-Times. With job growth picking up to accommodate the influx of migrant homebuyers look for Asheville to continue to build economically.
Wilmington North Carolina real estate has a median home value of $223,504 according to neighborhoodscout.com, making it some of the most expensive North Carolina real estate. The home appreciation rates in the last year were up nearly 9%, and in the last 10 years Wilmington has had some of the highest home appreciation rates of any community in the United States. For a homebuyer or investor Wilmington has a track record for being one of the nation’s best long-term real estate investments.