The question I have been getting a lot lately has been popping up from time to time since at least 2015. People want to know if the Triangle real estate market is in a housing bubble. To be fair, there are some eye-popping numbers out there that would lead anyone to believe we are in a housing bubble.
For starters, the average list price for homes is up over 20% from this time last year. The price per square foot is up 23% from last year and is continuing to rise as well. I predict housing to continue to go up by 2% to 4% monthly in this market.
What are the experts saying about this? Goldman Sachs recently commented that household buying intentions are the highest they’ve been in 20 years. JP Morgan says that home prices are going to continue to rise and buying conditions may be better now than they will be a year from now.
Morgan Stanley said, “Unlike 15 years ago, the euphoria in today’s home prices comes down to the simple logic of supply and demand. This time, the sector is on a sustainably more sturdy foundation.“ Merrill Lynch said, “There are reasons to believe that this is likely to be an unusually long and strong housing expansion. Demand is very strong because the biggest demographic sector in history (millennials) are moving through the household formation and peak buying stages of the home life cycle.”
“We’re going to see a long period of great home-selling conditions.”
These experts take a nationwide view, but how is the Triangle market doing? Our inbound migration remains strong. We have been on the same pattern for at least four or five years and see more than 70 families per day moving to our area. Companies like Apple are coming to the area and bringing high-paying jobs with them. The average income for the new Apple jobs coming to our area is $186,000 per year. Look for homes to become more expensive but affordable while rates remain low.
The No. 1 factor in all of this is supply and demand. At every price point up to $1 million, we have one month of supply or less. Inventory has never been this low, and builders just can not build fast enough. Material costs are going up and builders are slowing their releases while raising prices.
When will supply and demand balance out? I recently attended a panel that said it could take as long as 10 years. Most experts are saying in the four-to six-year range. No matter if it is four years or 10, that will be a very long period of great home-selling conditions.
Now, what does all this mean for you? It depends on your circumstances and situation. Reach out to me and I would be happy to go over them with you. If you have any questions about buying, selling, or investing in real estate, don’t hesitate to reach out via phone or email. I look forward to hearing from you soon.
