North Carolina Real Estate Market Grows Rapidly After Pandemic | WFAE 90.7



Winston-Salem real estate agent Jason Bragg can’t remember the last time he saw a domestic market as hot as the North Carolina market.

“Two weeks ago I had a list where we had over a hundred performances – everyone lined up for a few days,” he said. “On average, a house sells in a week or less – people list their house for sale quite often and get multiple bids.”

One of the most unexpected consequences of the COVID-19 pandemic was:ts impact on housing in the United States… A shortage of building materials due to factory closures and other supply chain disruptions has driven the prices of lumber and other materials to record highs – if available at all.

According to May National Home Builders Association Survey and Wells Fargo Housing Market Index, 90% of builders reported shortages of sawnwood, plywood and oriented strand board, and 87% reported shortages of windows and doors. These material shortages and delays have halted or, at best, delayed and raised construction prices for many new homes.

And the scarcity of affordable housing, coupled with high demand, means this is a seller’s market, where homes remain on the market for a short period of time and often cost more than the asking price.

Consequences of reopening and vaccine

Given the dramatic change in stocks due to the pandemic, some buyers are wondering if the rollout of the COVID-19 vaccine and the freer movement of people with the lifting of many security protocols in the pandemic could mean another shift in North Carolina real estate. market.

The short answer is that this is unlikely to change anytime soon. While COVID-19 has certainly made an impact, the current market is the product of a long overdue set of factors, according to real estate agents.

“I think the housing market is hot because of problems that have been growing over the years,” said Bragg, an agent for Leonard Ryden Burr Real Estate.

“We haven’t built enough housing in recent years, they haven’t built enough housing during the recession, and it will take a long time to build enough homes to meet demand.”

What is driving this demand? One factor is the growing popularity of North Carolina as a relocation destination. Cities like Charlotte and Raleigh are commonly featured on US News & World Report’s Best Places to Live lists, ranking 6th and 11th respectively for 2021. While these lists may be arbitrary, data from relocating companies supports this. hype.

According to the 2020 United Van Lines National Migration Survey, Wilmington ranked first in the number of entrances among US cities, with the Charlotte-Gastonia subway at number 13 and the Greensboro-Winston-Salem area at number 25. North Carolina. ranked 6th among the states with the most inbound transfers, according to the study. A similar study by Atlas Van Lines ranked North Carolina as the 2nd most inbound movement.

Ads for companies like Apple and Google The relocation of some businesses to the Triangle is expected to drive up housing costs in markets where affordable housing is already limited.

And in the aftermath of COVID-19, the flight of people from densely populated cities in states like New York and New Jersey has been fueled by fear of transmission of the virus, as well as new flexibility from work-from-home policies.

For those moving into full-time work-from-home status, the freedom to ditch high rents or mortgage costs in major cities in favor of more affordable locations like North Carolina has proven tempting.

“For many people, the idea of ​​retirement to the beach was something they would have to wait for, but if you have a suitable job, you can still retire in 20 years, but you can live where you want. be right now, ”said Mark Bushnell, senior vice president of external affairs for the North Carolina Association of Realtors. “And Wilmington, not coincidentally, is one of the hot spots for that.”

While the pandemic has caused a spike in unemployment and financial ruin for some, those whose jobs have not suffered negatively are finding they have more money to spend after a year away from traveling, dining out and at concerts and other events. …

“It was a story of two economies,” said Brett Bushnell, realtor and owner of Tri Local Realty LLC in Chapel Hill.

“People who work in the service industry have suffered in the past 15 months, and those who have not worked in the service sector, their personal balances seem to be better. So even if they start spending money on travel again, they might be able to pay off some of the debt during the pandemic. ”

For those who have been able to cut debt or save money during the pandemic, this means more funds available for advance payments and over-requested offers – a good factor in determining the stability of a hot real estate market.

“The average down payment we see is 22-23%, which is one of the highest in the country,” Bushnell said. “This makes the market less susceptible to downturns due to equity capital.”

And the still inflated cost of raw materials such as lumber and a shortage of other building materials mean that the supply of affordable homes is unlikely to increase significantly anytime soon.

“Usually, if you have such a large imbalance in supply and demand, the market will move to fill it,” Bushnell said.

“But it doesn’t go a dime when you have supply disruptions. Material costs and shortages are really forcing builders to stop a little – for example, many builders in the Triangle area do not sign pre-sales contracts because they do not know where their prices will be. “

While builders cannot anticipate their costs, home buyers know they can get mortgages at some of the lowest rates in recent history. But with the threat of a rate hike later this year, it is likely that buyers are less likely to take the plunge at a higher interest rate.

“The market is cyclical every year for the season, and then there is a cyclical supercycle,” Bushnell said. “We’ve had our hottest time for home sales, this is spring, and hopefully we’ll see a more normal flow in the fall. And this will be driven by an increase in inventories, as well as interest rates, as they were extremely low and loans are cheaper. “

As fall and winter tend to slow down sales and home listings, this, combined with a large vaccinated population ready to travel and see family, could mean a cooling of the property market over time.

But until the material shortages are resolved and housing construction returns to a more normal pace, real estate agents said they did not expect significant changes in North Carolina’s domestic market.

“In the short term, this fall and winter, we may see some people get distracted by going back to holiday activities, going to visit grandma and the like,” Bragg said.

“This drop may be a slight slowdown, but nothing that could slow the market down enough so that prices do not stay in the range where they are now. I think we will be like this for a while, because there are so few houses on the market. “

Carolina Public Press is an independent, non-profit North Carolina news service.


Source link