What does 2023 hold for Triangle housing market? Experts say it is ‘cooling.’

After two-plus years of plummeting inventory and sky-high home prices, the Triangle housing market may finally be settling down.

Mortgage rates have more than doubled from the historic lows seen in 2021, resulting in slower home sales and double the number of active listings, said Matt Fowler, executive director of Triangle MLS, a real estate listings platform covering eight local counties.

“The market is cooling off,” he told the N&O. “Showings per listing are down; internet searches and most other metrics are well off of 2022 levels.”

The plus side: Buyers get much more choice, he said.

But while Zillow forecasts that home prices nationally will decline by between 1% and 4% from last June’s levels, the 2022 peak, Fowler said he doesn’t expect prices to budge much in the Triangle.

“Our biggest driver continues to be a persistent undersupply of housing, especially affordable housing. This provides a floor for housing prices and generally limits market volatility,” he said. “We expect demand to remain strong and supply to be slow in coming. The health of the region’s economy is a bulwark against all challenges.”

Home prices jumped by 18% between June 2021 and June 2022, when they hit a peak median price of $422,000, as North Carolina remains one of the fastest growing states. Prices have slowly come down, but the Triangle’s median sale price was still $400,000 — up 8.4% from a year ago, according to the latest data from Triangle MLS.

Seller’s market

Among all large U.S. metro areas, Raleigh-Cary had the 13th most stable housing market, according to a recent study by Construction Coverage. The analysis found that a random buyer in the Raleigh metro area, purchasing a home at any point between 2000 and present, has a 21.2% chance of experiencing a 5% or greater price drop after the purchase.

“Most sellers could take a price drop much greater than 5% and still make a hefty profit,” said Raleigh Regional Association of Realtors president elect Tim McBrayer.

Bottom line: While the market is shifting to a more stable footing, it’s still a seller’s market, he said, “just not one as strong as one we experienced in 2022.”

McBrayer, a Realtor with the Jim Allen Group who is based in North Raleigh, said that is due in large part to the “continued influx of new residents.”

Wake County is growing more than twice as fast as the rest of the state, and adds approximately 62 people per day, according to the latest data.

John Wood, owner of Re/Max United in Cary, who has been an agent in the Triangle since 1988, also stressed that prices can very across submarkets in the Triangle.

“All markets are local,” he said. “Even in the Triangle, we see values rise and fall based on submarket conditions.”

For example, Durham County saw a price bump, with its median sales price jumping from $392,000 in October to $410,000 in November, according to Triangle MLS Market Trends. In Wake County, the median sale price also increased over the same period, from $468,800 to $470,000.

In Orange County, meanwhile, the median sale price dipped that month, from $425,000 to $410,748. Johnston County saw a substantial decrease with the median price dropping from $425,000 to $355,000.

“We expect home appreciation to fall more into our normal trends in 2023 to around 5% annually,” Wood said.

Buyers are coming out

AnnMarie Janni, founder and leader of Element Realty Group at Allen Tate Realtors, thinks the market is getting back to a “healthier” place in 2023 — not favoring buyers or sellers.

“Homes that are priced right and market ready will continue to sell quickly,” she said.

More buyers are also starting to creep back into the market, she said. “Many buyers that were priced out of the market or weren’t comfortable in competitive offer situations are coming back. They know they have a better chance of getting the house they want and will either refinance when rates go down or buy down their rate.”

While higher interest rates have reduced what buyers can afford, Boro Realty owner and broker Blair Nell said there are still plenty of buyers on the market. But they’re being slightly more discerning.

“Buyers don’t seem to feel as pushed or desperate, they’re willing to wait for the right home rather than purchasing just any home,” she said.