How can you know WHEN is a good time to buy a home in the Raleigh, Durham, Cary, Chapel Hill area of North Carolina? For example, what if, right after you buy, the market goes down? How can you time it perfectly, so you don’t get burned? Is that even possible? What IS the best strategy to time your home purchase? Stay tuned…
Hi I’m Mike Regan. Before I GOT into real estate, I was a process improvement consultant and the author of two books on the subject. Then, as a top-producing real estate agent, I was blessed to personally sell over 750 homes in my 17-year career. NOW, as the founder and CEO of Relevate Real Estate, I lead our agents and support team in continuous projects to improve the residential real estate process for our buyer and seller clients.
What is happening NOW in Raleigh Durham Cary Chapel Hill (Triangle) Real Estate Market?
People ask me all the time, “What’s happening with the market?” what I can tell them is what happened in the market recently. And while that’s very interesting information, what really matters, and what people REALLY want to know when they ask that question is “What is GOING to happen in the market?”
The right answer to that question is “No one knows about the short term (within the next three years or so), and if they really think they do, they should be quiet and invest their money and become a billionaire. But the rest of us, all of us, can learn from observing the long and consistent history of what HAS BEEN HAPPENING for over 50 years in the local and national housing market, and it looks like this:
Here is a graph since 2004 of our LOCAL MLS AREA, which includes Wake and all surrounding counties, which includes Raleigh, Durham, Chapel Hill, Cary, Apex, and as far out as Wake Forest, Garner, Holly Springs, Fuquay Varina, Pittsboro, Wendell, Rolesville, Knightdale, Hillsborough, Carrboro, and a half dozen other smaller municipalities.
Home prices have been increasing fairly predictably in the Triangle with the exception of the Great Recession years of 2008-2012, and even then we were affected less, and recovered faster, than most of the rest of the United States:
In most of the United States, home prices have been predictably increasing FOREVER, with a few exceptions (and you can see why they called it “the Great Recession”). Even then, home prices recovered nationally within seven years. These graphs show that, if history continues as it has over the past 60 years, the value of almost every home will increase, even over a fairly short time span, even if there are some short-lived downturns along the way. AND, consider also that interest rates during most of the increase in home prices were 5 or 6 or even 10 or 20 percent i the 70s… yet home prices continued to rise.
But, what about OUR area, the Triangle region of North Carolina?
What Will the Future of Raleigh Durham Cary Chapel Hill Real Estate Look Like?
We can analyze our local situation using the concept that determines the price of everything: Supply v Demand.
When the supply of homes is greater than the demand for homes, sellers compete with each other, and prices go down. This is called a “buyers market”. When demand for homes is greater than the supply, buyers compete for homes and as a result, prices go up. This is called a “sellers market”.
We realtors have a way of measure, in real time, whether we are experiencing a “buyers” or “sellers” market, and it’s call “Months Supply of Inventory”. Basically this means “If buyers keep buying at the current rate, how many months would it take them to purchase ALL of the currently-available homes for sale?” If that number is more than six, then it is considered a BUYERS market. If that number is less than six, it is considered a “SELLERS” market. Here is what that number has looked like in the Triangle for the past 10 years:
When an area is experiencing a “sellers market” (and anything less than 2 months is considered a STRONG sellers market), prices increase, and the lower the “months supply of inventory” number is, the faster those prices increase. That’s been happening for over a decade in the Triangle, and it’s likely to continue for a LONG time, because of our basic macroeconomic situation…
First, let’s talk about local SUPPLY: As they say, God isn’t making more land. Our area has been highly ranked as desirable place to live for at least 40 years, and during all that time, builders have been buying up land and building homes, which is a good strategy for them whenever demand for homes exceeds supply. However, there is only a fixed supply of land. Most of the available land close to downtown areas has already been built on, except for “infill” projects, which happens when a long-time landowner finally decides to sell. Therefore, most home building is happening further and further away from the cities, for example in Rolesville, Wendell, and Fuquay Varina. But even in these areas, the demand for housing is still very strong.
Now let’s look at local DEMAND: The Raleigh / Durham / Chapel Hill / Cary area has always been ranked among the best places in the United States (which means best places in the world) to live, starting over 30 years ago when Money Magazine rated us the #1 place to live in the US. We are currently rated #4 overall by Money Magazine. Recently we’ve been ranked the #1 place for veterans to call home, the #2 place for remote working, #4 for economic well being, and the 2nd safest city in the US. People from all over the United States know about our area and want to move here. So we know the DEMAND for homes in the Triangle is strong, and will very likely remain strong for all these same reasons.
The Best Strategy to Time Your Raleigh-Area Home Buying Decision
Here’s what I tell my clients about buying in the Triangle: Unless we have an worldwide economic meltdown, or unless the local supply and demand situation changes drastically, buying a home in the Triangle, as long as you plan to hold it for a few years, is VERY likely to be an excellent investment, no matter when you buy. And because the market always seems to go back up, buying in a dip, when everyone else is running scared, is likely to generate extra appreciation within a fairly short time period. As Warren Buffet often says, “When others are scared, I get greedy. When others are greedy, I get scared”. And, even if there IS another economic meltdown, our area, the Triangle region of North Carolina, for all the reasons I listed earlier, is likely to be the last impacted and the first to recover.
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