As with most industries, there are countless statistical data points that are tracked and analysed however a few stand out as best common indicators of possible future market directions; Interest rates, Inventory, Sales and Affordability.
The Triangle real estate market has enjoyed a very healthy and steady trend of demand and appreciation for several years particularly in Wake county where demand has been strongest and tricked to neighboring counties of Durham, Johnston & Orange. That being said, some recent trends might indicate that we are heading away from a seller's market and into a more neutral market which is a precursor for a shift into a buyer's market. Although such a market shift usually occurs over extended periods of time, it is often characterized as a sudden event because the signs are often ignored until the evidence is overwhelming and firm confirmation of a shift nevertheless the signs are always there and start as small trends thus worth a closer look.
Here are a few statistics and trends to consider:
-Inventory of homes for sale is up 16% which new listings is also up 11% from this time last year.
-Interest sates are up 1/2 % point from 1 year ago and a 1% from 2 years ago
-Pending sales are down 3% from recent months and 16% from last year
-Housing Affordability Index is at lowest point in 15 years
Looking at only the surface, home values are still appreciating in most markets, days on market are still low and the overall market is still very active, a deeper look at the rising inventory coupled with a decrease in pending sales over time can cause a build up of inventory, increase days on market and place downward pressure on home prices if the demand is not met by home buyers. Trends of rising inventory and days on market alone are not necessarily cause for attention however when met with a 15 year low Housing Affordability Index hints that the buyer demand may no longer be able to meet markets of past.
This is certainly not cause for panic rather a pause to not take the market of years past for granted nor a guarantee which is partly the reason so many people were caught off guard when the market corrected back in 2006 so much so that many still refer to the decline of 2007 which saw the greatest impact but started in late 2006.
Statistics for this article are sources from the National Association of Realtors, Triangle MLS and 10k Research.
For questions, comments or consulting contact:
Mike Carlos, Broker/Owner of No Hassle Home Sales, LLC Raleigh, NC 919-473-9113 Mike@NoHassleHomeSales