The aftermath of the Covid-19 pandemic is not over yet and we see the housing market enter a slowdown as it becomes difficult for buyers to afford housing due to steep prices and increasing mortgage rates.
The Capital City of North Carolina, Raleigh housing market has been very attractive for real estate investors and buyers alike. But how does this up-and-coming city fare in this post-pandemic era? To answer this question, Let us have a detailed look at things.
Why Is the Real Estate Market Slowing Down?
High Mortgage Rates
There are a number of reasons for the current slowdown of the real estate market but unarguably the most influential factor for real estate slowing down is the rapidly increasing mortgage rate.
Looking at the chart above, you can clearly see that the average fixed mortgage rates have increased to a staggering 7.03%, an increase of 4.05% from last year’s 2.98%.
What happened is that during the pandemic mortgage rates were brought down due to concerns about the impact of the pandemic on the economy. But now mortgage rates are rising rapidly because interest rates are increased by the Federal Reserve to deal with inflation. With such increasing mortgage rates, more and more buyers are priced out of the housing market thus reducing demand and increasing the supply of homes.
Home Construction Has Decreased
Another big reason for the real estate slowdown is that while demand has been softened, the supply has been failing to keep up. Have a look at the chart below:
There is a reason for this sudden decline in home construction. This is a result of the domino effect of the increased mortgage rates. As builders develop concerns about low demand due to these high mortgage rates, this lack of confidence in the market stops them from developing new properties.
Few Buyers Yet Prices Remain High
When the mortgage rates dropped during the pandemic, a lot of people tried to take advantage of it and as more and more people approached the market with a short supply of houses, the housing prices skyrocketed which caused real estate slowing down.
Although the effects of that bidding war have dwindled, prices are still far more than what they were a year ago and it will take some time till the real estate market “course corrects” itself, if it can avoid a crash like that of 2008. But experts believe that such a crash is not going to happen this time, as homeowners have far more equity than they had in 2008.
The State of Raleigh Housing Market
Raleigh is currently a buyer’s market, having a greater home inventory than prospective buyers. This means that buyers have relatively more power to negotiate a better deal. Raleigh property prices are increasing due to very high demand and real estate experts recommend investing in the Raleigh housing market as prices are likely to increase further.
Raleigh Housing Market Trends & Predictions
Is Raleigh a good place to invest? Being rated no.1 for homebuilding prospects in the US, Raleigh is highly desirable for real estate investors and buyers alike. Houses in the Raleigh housing market spend almost half the amount of time compared to 2021 and sell at $5000 less than the national median price.
When you consider these trends of the housing market in Raleigh, it is not hard to predict that demand for houses in Raleigh will keep increasing, and as demand increases then according to the supply-and-demand rules, home values will increase as well.
The main predictions for Raleigh Housing Market are:
- Despite a slowdown through the year’s end, the Raleigh housing market will keep on growing.
- House prices in Raleigh are going to stay below the national median.
- Home values will keep increasing through 2022.
What to Do in a Slow Real Estate Market
With the current trend of the market slowdown, you might be conflicted about what to do in a slow real estate market. Selling or buying a house in a slow housing market is different. While buyers may get the negotiating power they want and have multiple options to choose from, things are comparatively tougher for sellers. Here are 4 important tips to market your home perfectly in a slow real estate market.
1. Go With a Plan:
To get a house into marketing shape, there are things you should and shouldn’t do. Having an elaborate strategy for remodeling/renovating your home is the best way to avoid any useless spending and maximize your profits.
Always consult with a professional real estate advisor before making any renovation. This allows you to fully understand the ROI you will be getting on suggested repairs.
2. Price It Right:
One of the most important things to consider when putting up a house for sale when real estate is slowing down is your pricing strategy. Many people don’t understand this important detail and end up with houses that can’t sell in a slow market.
You definitely don’t want to undersell a house, but you also don’t want to price it too high so that it just sits idle without selling. When that happens and the seller drops the price in desperation, buyers take it as something wrong with the house on sale. Overpricing of homes is a major factor for homes not selling in slow real estate markets.
3. Presentation Matters:
When the supply is greater than demand, as is the case with the Raleigh housing market, the best thing you can do to improve your selling prospects is to make your house stand out from the competition. The best way to do this, after renovations, is to stage it right.
Buyers are looking for a house that they can relate to and can personalize to their liking. When staging a house, make sure to keep everything neutral and impersonalized so that the buyers can relate to the property.
4. Capitalize on The Features:
A great way to entice buyers to your house is to play with the strengths of your house and market it with its unique features. When your property has an interesting feature that other houses lack, it motivates the buyer to consider it more seriously. Your house may have features like a unique architectural design, a pool, recent renovations, and unique views; and it’s important to market your house aggressively using these features.
Despite Slowdown, Raleigh Housing Market Is Growing
Despite the overall slowdown of the real estate market in the aftermath of the Covid-19 pandemic, the Raleigh housing market continues to show impressive growth and opportunities for real estate investors. The main reason for this continuous growth is undoubtedly the affordable cost of living and the quality of life the city offers. In fact, you can now buy commercial property in Raleigh without any downpayment.
Raleigh is categorized as a “magnet supernova city” by the PwC. What this means is that Raleigh is a magnet city that attracts both businesses and residents and the word “supernova” refers to the speed with which it is expected to grow. So for a city that is on a trajectory of economic growth, plenty of opportunities are present for investors in the Raleigh housing market. Green Street Home Buyers are the real estate experts in Raleigh, NC and you can contact us at (919) 926-1791 or if you want a cash offer now, you can send us a message.