Homes selling for 20% more now than a year ago: A look inside the Triangle's hot housing market

Tara Baran and Brenden McGeehan have been fixing their house in northeast Raleigh to their liking since closing on it earlier this year. Now, as they walk through the living room, the floors have been refurbished and the walls painted.

"Our house needs a little more renovating than we had hoped, but it gives us a chance to make it our own," Baran said. "As first-time home buyers, we really did not know what to expect, but it certainly wasn’t this."

The Triangle's housing market is hot. Baran and McGeehan put two bids on houses before finally sealing the deal on the one they have now.

"It was frustrating to see a house we liked online go under contract in less than 24 hours," Baran told WRAL News. "We found ourselves glued to Zillow, waiting for the next house to be listed and rushing to get to see it in person before offers started flooding in."

They aren't the only ones who have experienced this. Sellers, buyers and people perusing listings have seen prices soar over the the last year. The latest real estate statistics show sales prices up 20 percent over last year while the inventory is down.

"Prices are going up, and prices are going up, and prices are going up," said Bill Commander, a real estate agent who recently bought a house.

The median price people paid for houses in Wake, Durham, Orange and Johnston counties in May was $345,000, according to Triangle MLS, a real estate listing service for 16 counties in North Carolina.

The median price, or the very middle amount, has increased by more than $57,000 in the last year, according to Commander.

Whether you want five bedrooms on an acre of land or a modern condo with a city view, you can find it for that amount – it just depends on what you’re willing to give up.

Triangle could become 'the octagon'

WRAL scoured Zillow to find houses in the area that matched the median price.

One 660-square-foot condo near The Village in Raleigh recently sold for close to that price tag. It’s new construction, one bedroom and a bath, with a balcony and modern appliances. In its listing, it was described as “luxury in a Goldilocks-style package."

Commander said it's very much a seller's market. On average, homes are on sale for only 12 days right now; half the time it was a year ago. Meanwhile, inventory has dropped by 70 percent. The lack of available houses has expanded the Triangle market, according to Commander, who joked that, in a few years, the regiona might have to be considered "the octagon" for how far the market is spreading.

"It's kind of pushing the market out a little bit," he said. "Location has been one of the things that people are willing to bend on."

Sacrificing space or compromising for your commute

Families with children are probably looking for more space than something available in downtown Raleigh. For the same amount – $330,000 – a five-bedroom, three-bathroom house might meet their needs. The 4,000-square-foot house sits on 1.5 acres in Johnston County, but what you gain in space, you’ll pay for in commute. The home is located southeast of Clayton – about 40 minutes to downtown Raleigh and close to an hour to Research Triangle Park.

"A lot of people from California or New York are willing to commute more," Commander said. "They're OK with a longer commute because it's what they're used to."

New York and California were among some of the top places Triangle residents moved from over the last year. Rocky Mount had the largest jump in transplants to Raleigh and Cary last year when compared with 2019, at 30%, followed by Los Angeles at 26.5%, New York City at 23%, Durham-Chapel Hill at 21.4% and Philadelphia at 20%.

In Durham, a 3,800-square-foot home on an acre of land in Bahama in the Black Horse Run neighborhood recently sold for close to the median price, at $340,000. Closer to downtown Durham and RTP, a three-bedroom, two-bathroom house goes for $15,000 more. The catch: It's significantly smaller than the Bahama house, with less than a third the square footage.

For those willing to to go a little farther west into Orange County, a 2,000-square-foot end-unit townhome in Hillsborough could be had for $335,000. While it has a double garage, fireplace, recessed ceilings and a screened porch, it will take you a little while longer to get to work. It's located about about 25 minutes from downtown Durham or RTP and 45 from downtown Raleigh.

Bidding wars driving up prices

Commander says rising prices in a tight real estate market often changes where people are willing to purchase before the amenities they want in a home.

"Whether they're moving for a job or to be a part of the university system, whatever it happens to be, generally location is first," he said. "Then, as they lose their fourth, fifth [or] sixth bid, that's maybe one of the things that gets compromised."

Baran and McGeehan can attest to that. The engaged couple were initially looking closer to downtown Raleigh but had to look elsewhere after being outbid for two homes.

"We started out looking in more desirable locations at the top of our budget but that left us with little wiggle room when trying to put in a competitive offer," said Baran. "After losing out on two homes to offers as much as $45,000 above list price, we decided to start looking below our budget, knowing we would probably end up paying closer to it anyway."

The typical house in the area where the couple bought sold for $264,612 in May, according to Zillow data. The value for that ZIP code increased 16.2 percent in one year.

"Housing has been on a tear," Mark Zandi, an economist who works with Moody's wrote in a CNN article. "Home sales, home building and especially house prices have surged."

In a recently published report, Zandi declared that the Wake County housing market is overvalued.

Data from Zillow shows the five most expensive ZIP codes in the region are in Wake County. On average, homes in those areas are selling at $729,906 in 27608 – the University Park area inside the Raleigh Beltline – to to $497,148 in 27519 in Cary.

All but 21 ZIP codes across the state have increased in value over the last year, and the typical house is selling for more now than it was in November 2020 in all but 13 ZIP codes in the state.

The most expensive area in North Carolina, according to the Zillow data, is the 28207 ZIP code in Charlotte. In May, the typical house was selling for more than $1.1 million, and the year-over-year increase topped $135,000. Other locations topping the list for value include Wrightsville Beach, Cashiers in Jackson County, Grandfather in Avery County and the 27608 ZIP code in Raleigh. The average price for those top five locations was just under $887,000.

Houses in the 28552 ZIP code in Lowland, near New Bern, sold for the lowest amount in May. The data shows the typical home on the market was valued at $31,206. Still, the homes there increased about 6% in value over the last 12 months.

How long will the market stay hot?

"Despite being overvalued, there is no sign the housing market is in a bubble," Zandi wrote. "But stress lines are beginning to appear, and the housing market is set to cool off."

Commander said he feels the Triangle market will be hot for a while.

With big companies like Apple and Google announcing expansions that will have new people moving to the Triangle for years to come, it’s unlikely the market will see a significant downturn anytime soon. So, if you’re wondering not how much house you can afford, but how much your current home might be worth, Commander says it’s the perfect time to consider that, too.

"Without a doubt, a seller's market, without a doubt," he reiterated. "Inventory is to the point now that, if we tripled the number of houses that were in the market, we'd still be in a seller's market."