Despite a declining U.S. housing market, Raleigh is expected to outperform most metro areas in 2023, according to a new report of the National Association of Realtors.
The city of Oaks landed second place, just behind Atlanta, on the list of markets to watch next year. Key measures include housing affordability, employment conditions and population growth relative to the national average.
“Although this area is less affordable, more than 20% of renters can afford the typical home,” the report said. “The labor market is robust and it won’t slow down anytime soon. The data shows that buyers have more options in this area, as a single-family permit is issued for three new jobs.
Dallas rounds out NAR’s top five; Fayetteville, Arkansas; and Greenville, South Carolina.
“Economic conditions in place in the 10 major U.S. markets, all of which are in the South, allow real estate prices to climb at least 5% in 2023,” said Lawrence Yun, NAR’s chief economist and senior vice president of research, said in the report.
Outside of these hotspots, annual median home prices are only expected to rise 0.3% — after a 9.6% gain in 2022 — to $385,800, NAR said. “Half of the country may see slight price increases, while the other half may see slight price decreases,” Yun said.
On the rental front, Yun expects prices to rise 5% in 2023, following a 7% increase in 2022. He expects foreclosure rates to remain at historically low levels in 2023, representing less 1% of all mortgages.
The NAR forecast follows a rollercoaster year in the Triangle housing market that saw a massive spike in house prices. At their peak in June, home prices were up 17.8% from a year ago, selling for a median price of $421,757, according to the Triangle Multiple Listing Service. June Market Snapshot. Against a backdrop of rising inflation and rising mortgage rates, prices fell to $395,000 in October – but that’s still up 8.2% from last year.
“Local real estate listing prices are down from this summer’s peak,” Jay Nelson, communications director for the Raleigh Regional Association of Realtors, told the N&O.
Unemployment in Raleigh is lower than it was before the pandemic, he added, and home inventory is up 188% in the past 12 months. “These are just a few of the factors that should give real estate agents reason to believe that our market will do 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 gated home prices to be “fixed at a bit lower” at the early peak of 2023. “We expect home appreciation to fall further into our normal trends in 2023 at around 5% per year,” he said.
Stacey Anfindsen, an Apex rater who analyzes MLS data, pointed out that prices can vary widely between Triangle submarkets.
“All real estate is local. It’s not a slogan,” he said. “In some submarkets, housing prices have fallen; in others they have increased. If you’re a seller or a buyer, you need to be hyper-focused on your submarket, as well as supply and demand.