An article on Forbes.com from late June declared Raleigh, North Carolina as the number one home seller’s market in the US. Their determination was based on three metrics.
- A measure of current inventory. This is simple a supply and demand analysis which Forbes based on numbers from the National Association of Realtors and Moody’s Economy. Current inventory is the measurement of how long it would take to sell all currently listed homes at the current sales rate. According to Forbes, the Raleigh real estate market is number one in the nation in this category.
- The change in the sales rate over the past year.
- Price stability. This was considered as a way to exclude upstart markets and only include real estate markets with steady, sustainable home values.
The Forbes article cited Raleigh’s strong economy, moderate growth, and carefully paced building as key factors in the high ranking. So how does this stack up compared to a local Realtor’s opinion of things? Let’s start by looking at current inventory.
With the number of current listings in Raleigh at 3850, the current inventory is about 4 months. As you can see in the chart, it varies slightly depending on whether we use the stats for July home sales or 2nd quarter of ‘07.
We can also look at the change in average sell price by comparing activity for the second quarter of this year with the same quarter of 2006.
Average Sell Price Comparison
Q206 $245,849
Q207 $254,124
The average sell price has increased $8,275, or 3.4% by this comparison. Keep in mind that the 2nd and 3rd quarter of 2006 were above average with closed sales of 2,889 and 2,952 respectively. Actual resale appreciation, which is different than increase in average sell price, was closer to 5%.
My conclusion is that we do indeed have a very good home seller’s market here in Raleigh, North Carolina. It’s growing at a normal pace that allows home sellers to make a good return for their investment and home buyers to get into a healthy real estate market with very good opportunities for future growth.
I think the major reason it continues to be so steady is we have never had the sharp run up in prices that much of the rest of the nation has experienced. Overall, we are keeping pace with affordability.
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