RALEIGH – The median home sales price in Wake County in June was $ 383,000, according to a new analysis of real estate data from the Wake County Transactions Registry, and homes are selling for about 20% more now than a year ago.
But that doesn’t necessarily mean more homeowners are planning to list their properties for sale in order to take advantage of the potentially higher sales prices.
The reason is that not only the average home sales price is increasing – from $ 328,750 in January, or 16.5% over that time – a significant number of homeowners are choosing to refinance their property rather than list it for sale.
An analysis by the Deals Registry Office found that real estate lending activity in Wake County was up 7% in June 2021 from the prior month, but was down 7.1% from June 2020.
The real estate lending activity consists of two main components:
- Lending coinciding with the transfer of ownership of real estate… This type of lending occurs in the normal sale of a residential home, where at the time of closing, the seller’s loan is paid off and the buyer of the home takes out a new loan through an instrument known as a trust deed, as title to the property is transferred. on business.
- The new secured loan is issued against the property without changing the owner. This type of lending occurs without the transfer of ownership of land or property. This is the case in a typical mortgage refinance or second mortgage transaction.
“The relative strength of the second type of lending activity can be quantified by comparing the relationship of fiduciary relationships to transactions over the period,” the analysis says. In other words, by comparing the total number of transactions with the total number of trusts, there is a quantitative way to understand lending activity. “A relatively higher number of trusts means an increase in mortgage refinancing,” the analysis says.
The chart presented by the Wake County Transactions Register shows a significant increase in the second type of lending activity, that is, the filing of fiduciary documents without changing ownership.
Analysis of the data shows that there is a growing gap from the baseline period to the onset of the global coronavirus pandemic, which quantifies the growing strength in the mortgage refinancing market. “The gap between them remains consistently large,” the analysis concludes.
According to Brad Benham, Vice President and Senior Mortgage Officer at Towne Mortgage, Carolina, refinancing increased in the second half of 2020 and the first half of 2021 for a good reason: rates fell further, making refinancing more profitable for more. the number of homeowners.
“As the value of homes has increased, some homeowners may have opted to do cash refinancing to consolidate debt or carry out home renovations,” Benham said. But with inventories so low across the Triangle, potential buyers who originally wanted to sell their current property may not have considered refinancing as they may have been planning to sell their current home, Benham noted. “However, due to inventory levels that are making it harder for people to find their new home, they may have decided to go ahead and refinance at a lower rate and stay in their current home for a little longer.”
Good time to sell; may not be the time to buy?
This gap does not mean that buyers are less interested in buying property. In accordance with data The triangle, released this week by technology company ShowTime, used to coordinate real estate exhibitions, is among those real estate markets with the highest average number of impressions in the first five days after real estate becomes available on the market. According to their data, homes in Raleigh still show up to 30 impressions in the first five days, indicating that demand is still high, even though supply remains low.
A new study by Opendoor found that there is also a gap in the market when it comes to buying or selling real estate. Analysis survey data from Opendour, which is iBuyer active in Raleigh, Durham and Charlotte, all of which are among the top regions where iBuying highest in the country shows that while 85% of people think that now is a good time to sell a home, only 36% think that now is a good time to buy it.
“With the recent announcements by Google, Apple and other tech companies to add offices in Raleigh-Durham, customer demand will only increase,” said John Enberg, regional general manager for Opendoor. “The market supply is at an all-time low and supply for new construction and resale is not keeping up.”
These jobs, as well as recently announced biotech and life sciences jobs, are advertised at higher than the median salary, which gives some buyers higher purchasing power, Enberg said. Meanwhile, out of state move to the Triangle and can get more housing for less money than their cities of origin.
This means that many of those relocating, responding to competition in the Triangle housing market, are making property offers for money that latest data from the National Association of Realtors, exhibitions are primarily for buyers intending to make a home their primary residence.
“All of these factors make it difficult for buyers to find another home, resulting in many using their extra money to invest in improving their current home,” Enberg said. To find the money, some owners are choosing or have already decided to refinance their mortgages or take out secured lines of credit against their home, according to the Wake County Transactions Register.
“This could lead to a higher return on investment when they are ready to sell the home, given the continued demand for housing,” Enberg said.
Options for homeowners looking to buy a new main residence now could also include keeping their current property and converting it into a rental property, Benham said. He noted that this is due to the fact that they can refinance at a lower rate. This could result in the owner, now the landlord, paying less monthly to pay off the new mortgage, and generating higher rental income from the increase. rental rate inflation…
“Some homeowners keep their property as an investment property rather than selling it when they want to move into a new home because the rate on an existing mortgage is very low,” Benham said. “The impact on stocks is more of a situation where sellers fear they will not be able to find another home if they put their home on the market,” he said.