RALEIGH – The value of real estate in Wake County continues to rise, despite recent increasing volatility in local labor markets, rising mortgage interest rates and slowing lending activity, new data from the Wake County Register of Deeds shows.
The median sale price across all parcels of real estate for transactions recorded in June 2022 in Wake County was $470,000, another record high, according to the report.
That’s an increase of $8,000 from the month before. In January, the median sale price was $410,000 and in June 2021, the median sale price calculated by the Wake County Register of Deeds was $383,000.
“This is an illustration that supply and demand economics are really strong,” said Dr. Gerald Cohen, the chief economist at the Kenan Institute, in an interview with WRAL TechWire. “Housing is all about locality, and we’re in an environment where demand is really strong and supply is limited.”
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What’s happening
In part to combat increasing inflation, the Federal Reserve has moved to raise interest rates, which can have an impact on mortgage lending markets, as well.
For instance, typical mortgage interest rates have nearly doubled in 2022.
And in response, lending activity in Wake County appears to have decreased compared to a year ago, when there was a growing gap in the real estate market. Now, the latest data from the Register of Deeds shows that the gap has nearly closed, which “indicates the refinancing market continued to cool in June 2022,” the report notes.
Wake County Register of Deeds image and data.
This is a case study in what the Federal Reserve intends, said Cohen. But the Fed also faces a challenge, because while they’re already aware that nationally, housing supply is constrained, they can only take action that might influence the demand side of the market by making borrowing, including funds for mortgages, more expensive.
“What they’re doing by raising rates is hurting that, because they’re trying to soften the demand side, but they may also be hurting the supply side,” said Cohen.
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Value of real estate market growing, too
Still, locally in Wake County, the aggregate value of real estate transactions continues to grow monthly, even with seasonal variances in the real estate market.
Total sales value across the market surpassed $2.5 billion in June 2022, and was up 11% from May, when the total volume was approximately $2.25 billion, according to the report.
That’s in part due to the fact that 6.9% more transactions closed in June compared to May.
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Predicting future of real estate market
The Triangle’s housing market remains resilient even as other “pandemic boom towns” nationwide are showing signs of a market cooldown in recent weeks.
North Carolina’s real estate market is resilient as there are municipalities, including some within Wake County, that are still experiencing positive net migration, as WRAL TechWire reported last week.
The latest data from the Triangle Multiple Listing Service, TMLS, also shows median home sale prices increasing. The chart above tracks the median sale price for homes sold traditionally, including both new construction and existing homes, in the entire TMLS 16-county region as well as in Wake County, and is shared with permission from TMLS.
“It takes time for mortgage rate increases to show up,” said Cohen. “Rate increases will have an impact on housing nationally and could on housing locally.”
So what might happen in the Triangle?
“What I believe is that we’ll see slowing in activity, some slowing in price gains, potentially, and from month-to-month we may see declines because of seasonality,” Cohen said. “But am I worried that this turns into a rout? No.”
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