Housing Experts Make 2021 Predictions About North Carolina's Housing Market
The wild ride of 2020 has a lot of people wondering what the housing market will be like in 2021. In North Carolina, the regional real estate association has issued some predictions for the new year. In its December 31 statement, the group of experts state that the COVID-19 pandemic will continue to play the leading role in housing market activities.
Seller's Market Will Persist
The year 2020 has been a solid seller's market. Experts expect that to continue in 2021. In North Carolina, the seller's advantage will be high in the Triangle and Charlotte. A big housing boom occurred in those areas of the state in the summer. Total sales surpassed 2019's. The ongoing popularity of the Triangle, low interest rates and a demand for private housing over apartment units are also factors driving the market.
Home Prices Rising As a Result of Scarcity
Fewer people are listing their homes for sale. This is leading to scarcity in available existing single-family homes. At the same time, the COVID-19 pandemic resulted in construction firms halting activities for several weeks in the spring. Those units should have been completed and ready for occupation by this time. Real estate agents have had to change how they list and sell homes. Traditional open houses aren't feasible now, and they might not be for another six months.
Supply Shortages Contribute to Scarcity
International supply and logistics problems have also caused scarcity of some construction materials. As a result of the low supply of home construction materials, prices of newly built homes are also on the rise. According to the regional director of Metrostudy, which is a residential housing information firm in the Triangle, builders proactively raised their prices in order to slow sales of new construction homes.
Builders Contributing to the Bottleneck
Builders have a limited number of lots where they can build a home. There are additional limitations on labor availability as a result of COVID-19 infections and quarantines. The limited material availability and difficulty with shipping the materials are also problems affecting the supply of newly built homes. The agency expects this bottleneck to persist well into 2021.
How the COVID-19 Vaccine Could Affect Housing
Both the incoming Biden administration and the outcome of the Senate runoff election in January in Georgia will affect the 2021 housing market conditions in North Carolina. If the administration does a good job with vaccine delivery and distribution, new jobs will be created. Economic activities will be able to resume at full speed.
Housing Statistics for North Carolina
The number of housing starts increased by 4.5% in 2020 compared to 2019. However, the number of homes sold grew by 11.4% in 2020 compared to 2019. Across the United States, there are 1.28 million homes available. That number is 22% lower than the number of homes available in 2019. It's the lowest number of homes available in the 40 years that the National Association of Realtors has collected housing data. The current supply is less than one month in the Triangle and Charlotte. Nationally, there is a 2.3-month housing supply. The current inventory of 4,554 homes in Charlotte is 54.5% lower than what it was in 2019. Homes in Charlotte average just 24 days on the market before the transaction closes.
What Local Housing Analysts Say
Stacey Anfindsen, who is an appraiser in the Triangle, says the current housing market is unprecedented in the 30 years she's worked in the industry. She said that a six-month supply of homes is ideal for a balanced market. The local market was already under stress last year when the supply was just two to three months' worth of existing homes for sale. More than 81% of the homes sold in the Triangle and Charlotte were on the market for less than one month. Of existing home sales, 36% sold for a higher price than their listing price. In the Triangle, the average home sale price in November was $369,000. Nationally, the average home sale price was $315,000. In Charlotte, the average home sale price was $349,562. It's important to note that the base price was about $7,000 higher than average, but bidding wars between buyers contributed to the increase in sales prices. This was a 14% increase compared to 2019. Experts expect the rising home prices to level off in the second half of 2021.
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