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As we head into 2023, many are wondering what the future holds for the Raleigh housing market. With the COVID-19 pandemic still affecting the economy, it’s hard to predict what will happen in the coming years. However, by analyzing current trends and data, we can make some educated guesses about what the future might hold.
In this blog post, we’ll be taking a closer look at the Raleigh housing market and making predictions for 2023. We’ll be covering everything from home prices and inventory to the impact of the pandemic and the overall state of the economy. So, if you’re thinking about buying or selling a home in Raleigh, this post is for you.
Current State of the Raleigh Housing Market
Before we dive into predictions for 2023, let’s take a look at the current state of the Raleigh housing market. According to Zillow, the median home value in Raleigh is currently $347,000. This is up 15.3% from last year and is expected to rise another 9.9% over the next year.
Inventory in Raleigh is currently low, with only 1,464 homes for sale as of September 2021. This is down 36.4% from last year and is contributing to the rise in home prices. The average days on market for a home in Raleigh is currently 23, which is down from 29 last year.
Overall, the Raleigh housing market is currently a seller’s market. With low inventory and high demand, buyers are facing stiff competition and sellers are able to command top dollar for their homes.
Predictions for Home Prices in 2023
One of the biggest questions on everyone’s mind is what will happen to home prices in Raleigh in 2023. While it’s impossible to predict with certainty, there are a few factors that could impact home prices in the coming years.
The Impact of the Pandemic
The COVID-19 pandemic has had a significant impact on the housing market, both in Raleigh and across the country. While the pandemic initially caused a slowdown in the market, it quickly rebounded and home prices have been on the rise ever since.
However, there are still some factors related to the pandemic that could impact the housing market in the coming years. For example, if there is another wave of COVID-19 cases or if the economy experiences another downturn, this could lead to a slowdown in the housing market.
On the other hand, if the pandemic continues to recede and the economy continues to recover, this could lead to even higher home prices in Raleigh in 2023.
Population Growth
Raleigh has been experiencing rapid population growth in recent years, with many people moving to the area for its strong job market and high quality of life. According to the US Census Bureau, the population of Raleigh grew by 17.6% between 2010 and 2020.
This population growth is expected to continue in the coming years, which could put even more pressure on the housing market. With more people competing for the same number of homes, home prices could continue to rise in 2023 and beyond.
Interest Rates
Another factor that could impact home prices in 2023 is interest rates. While interest rates are currently low, they are expected to rise in the coming years. According to Freddie Mac, the average 30-year fixed mortgage rate is expected to rise to 3.8% by the end of 2022 and to 4.2% by the end of 2023.
This increase in interest rates could make it more difficult for some buyers to afford homes, which could lead to a slowdown in the housing market. However, it’s important to note that even with higher interest rates, homes in Raleigh are still likely to be in high demand due to the area’s strong job market and high quality of life.
Predictions for Inventory in 2023
Another factor to consider when predicting the Raleigh housing market in 2023 is inventory. As we mentioned earlier, inventory in Raleigh is currently low, which is contributing to the rise in home prices.
While it’s difficult to predict exactly what will happen with inventory in the coming years, there are a few factors that could impact the supply of homes in Raleigh.
New Construction
One factor that could help alleviate the low inventory in Raleigh is new construction. According to the National Association of Home Builders, single-family housing starts in the South region (which includes Raleigh) were up 31.7% year-over-year in August 2021.
This increase in new construction could help increase the supply of homes in Raleigh, which could lead to a slowdown in home price growth. However, it’s important to note that new construction takes time, so it may take a few years for the supply of homes to catch up with demand.
Selling Trends
Another factor that could impact inventory in Raleigh is selling trends. Many homeowners are still hesitant to sell their homes due to the pandemic and the uncertainty it brings.
However, as the pandemic recedes and the economy continues to recover, we may see more homeowners putting their homes on the market. This could help increase the supply of homes in Raleigh, which could lead to a slowdown in home price growth.
Migration Patterns
Finally, migration patterns could also impact inventory in Raleigh. As we mentioned earlier, Raleigh has been experiencing rapid population growth in recent years, which has put pressure on the housing market.
If migration patterns change and fewer people move to Raleigh in the coming years, this could help alleviate some of the pressure on the housing market and increase inventory. However, it’s important to note that Raleigh’s strong job market and high quality of life are likely to continue attracting new residents, so a significant slowdown in migration is unlikely.
The Overall State of the Economy
When predicting the Raleigh housing market in 2023, it’s also important to consider the overall state of the economy. While the economy is currently recovering from the pandemic, there are still some factors that could impact economic growth in the coming years.
Job Market
Raleigh’s job market has remained relatively strong throughout the pandemic, with many companies continuing to hire and even expand their operations in the area.
If this trend continues in the coming years, it could help support the housing market by attracting more buyers to the area. However, if the job market suffers a slowdown or contraction, this could lead to a slowdown in the housing market as well.
Inflation
Another factor to consider when predicting the housing market in 2023 is inflation. Inflation has been on the rise in recent months, which has led to higher prices for goods and services.
If inflation continues to rise in the coming years, this could impact the housing market by making it more expensive for buyers to purchase homes. However, it’s important to note that the Federal Reserve has tools to control inflation, so it’s not necessarily a foregone conclusion that inflation will continue to rise at its current pace.
Conclusion
Overall, the Raleigh housing market is likely to remain strong in 2023, with high demand and low inventory driving up home prices. While there are some factors that could impact the market, such as the pandemic and interest rates, Raleigh’s strong job market and high quality of life are likely to continue attracting buyers to the area.
If you’re thinking about buying or selling a home in Raleigh, it’s important to work with an experienced real estate agent who can help you navigate the market and make informed decisions. With the right guidance, you can successfully navigate the Raleigh housing market in 2023 and beyond.
