North Carolina Housing Market 2023 Report
What is the North Carolina Housing Market Like?
North Carolina has made the headlines in the past couple of years as one of the most attractive states in the country. Boasting job growth (particularly high-tech and science-oriented jobs in the so-called Research Triangle that spans the hub cities of Raleigh, Durham, and Chapel Hill), a high quality of life, and a low cost of living, North Carolina has attracted newcomers and companies alike. This situation has been exacerbated by the pandemic, and the North Carolina housing market has become very competitive, with remote workers moving to the state as well.
However, after a market peak in June 2022, when the median property sale price reached $363,500, the housing market in North Carolina is showing signs of slowing down following the aggressive interest rate hike policy initiated by the Federal Reserve Bank since March 2020 to fight against inflation. According to data collected in September 2022, the median property price dropped slightly to $346,600, representing a 10% increase compared to a year prior.
In addition, the sale volume has declined slightly, with 14,427 houses sold in September 2022, 0.14% less than in September 2021 but 8.9% less than in August 2022. Properties also tend to stay on the market longer, with 31 median days on the market in September 2022 compared to 31 the year before.
How does the North Carolina Housing Market Compare to the National Average?
Starting in March 2022, the Federal Reserve Bank has initiated a hawkish interest rate increase policy destined to fight back against inflation, which stands at a forty-year-high. Mortgage rates, which had been sitting near historic lows for the past three years, have increased accordingly and, as of October 2022, are hovering around 7% at levels unseen since 2008 and twice as high as they were a year ago.
The housing market nationwide, including in North Carolina, has responded accordingly and has started to correct itself. After a market peak in June, which matches the seasonal cycle, the median sale price has begun to decrease. The North Carolina housing market remains competitive as it is one of the most attractive states in the country for individuals looking to relocate out of state.
Combining a relatively affordable housing market with a high quality of life, the North Carolina housing market is showing solid chances of being able to avoid the worse of a real estate market recession.
North Carolina Metro Areas with the Hottest Housing Markets
North Carolina presents a unique combination of low-priced, rural areas and desirable cities showing significant growth of highly qualified jobs. Here are the hottest housing markets in North Carolina:
The hippest city in North Carolina is also the largest city in Western North Carolina and one of the fastest growing, with a city population of 94,589. Houses for sale receive, on average, two offers per listing. 37.6% of homes sold above their asking price for a median sale price of $455,000, 15% more than a year ago. Properties stay on the market for 45 days, which is almost the same as last year at 44 days.
Charlotte is the most populous city in North Carolina, with a population of 874,579. It is the third-fastest-growing major city in the United States. Houses for sale in Charlotte receive, on average, three offers per listing, and 29.3% of them sold above the asking price for a median sale price of $385,000, 13,3% more than last year. Properties stay on the market for approximately 36 days, three days more than last year.
Fayetteville is better known for being the home of Fort Bragg, one of the largest military installations in the world by population. With a population of 208,501, it is the 6th-largest city in North Carolina. The Fayetteville housing market is competitive, with listed properties receiving four offers per listing on average. 26.9% of homes sold above the asking price for a median sale price of $370,000, 4% more than last year. Properties stay on the market for approximately 33 days, a significant increase compared to the previous year when they were snatched off the market after a mere 12 days.
Raleigh is the state capital of North Carolina and the second most populous in the state, with a population of 474,069, as well as one of the fastest-growing cities in the nation. Along with Durham and Chapel Hill, Raleigh is part of the Research Triangle, which attracts tens of thousands of jobs in the fields of science and technology. Raleigh houses for sale receive, on average, three offers per listing, and 31.5% of them sold above the listing price for a median sale price of $397,000, 9% more than last year. Properties had a median day on the market of 40, 6 more than a year prior.
The port city of Wilmington is the eighth-most populated city in North Carolina, with a population of 115,955. Named "Best American Riverfront,” it has become a major center of American film and television production. The Wilmington housing market is very competitive, and 26.9% of homes sell above the asking price for a median sale price of $353,450, representing an 8.8% year-over-year increase. Houses sell extremely fast after a mere 17 days on the market, 31 days less than last year.
Higher Mortgage Rates Could Slow Price Growth in North Carolina
Like most of the country, the North Carolina housing market is suffering from the effects of the interest rate hike policy set up by the Federal Reserve Bank. After sitting near historic lows for years, the mortgage interests have topped 7% for the first time since 2008 in October 2022. The Fed has already announced that more interest rate increases were likely in the work until the inflation rates decline to a target of 2%.
In consequence, home hunters’ buying power has been significantly affected, and median sale prices have started to decline. However, the North Carolina housing market remains one of the most attractive in the country. Property prices remain comparatively low, and North Carolina is home to some of the fastest-growing cities in the country, making it unlikely that property prices will crash completely.
Key Market Stats for the North Carolina Housing Market
As of the latest compiled housing report with data through Sept 2022.
- Median home price: $346,600 – 10% more than September 2021
- Home sale volume: 14,427 – 0.14% less than September 2021
- Months supply of inventory: 2 – compared to 1 in September 2021
- Mortgage rates as of November 3rd, 2022: 6.95%
North Carolina Historic Price Changes and Affordability
The North Carolina housing market has been appreciating continuously for the past three years, owing to the great numbers of companies moving to the state, particularly in the Research Triangle area. Several of the fastest-growing cities in the country are located in North Carolina, adding to the pressure on the local housing market. The situation has been exacerbated by the pandemic as a growing number of remote workers made their way to this affordable and sunny state, particularly from the New York area. The median sale price climbed from $248,200 in September 2019 to $346,600 in September 2022 after a market peak of $363,500 in June 2022, accusing a 39.64% increase in 36 months.
The North Carolina housing market remains relatively affordable compared to other states in the nation. However, the increased cost of borrowing money has significantly affected homebuyers’ budgets. Therefore, a decrease in property prices is to be expected but will likely remain moderate as the state continues to be one of the most attractive in the country.
- The North Carolina housing market remains very competitive despite a slight decline in the median sale price and longer time spent on the market, which are consequences of the aggressive interest hike policy initiated by the Fed
- North Carolina continues to attract out-of-state workers and companies thanks to its high quality of life, comparatively low cost of living, and dynamic job market
- Although a market correction appears inevitable, it is unlikely that the North Carolina housing market will collapse in the mid to near future.