Even in a pandemic, the Triangle housing market is doing better than it did last year
While most of the economy is reeling as a result of the coronavirus pandemic, the Triangle housing market is still booming, fueled by historically low mortgage interest rates.
Residential real estate in the greater Triangle area didn’t only come back to pre-COVID-19 levels but surpassed them as the seller’s market grows. Numbers show that demand is up while inventory is lowering.
In the Triangle market, July set records for real estate activity as showings were up by 14%, houses listed up by 12%, pending sales up by 19%, closed sales up by 5% and inventory down 37% compared to July last year.
There were 23% more homes sold in July than June.
“For many of our homebuilders, the months of May, June and July were among their best sales months ever,” said Amanda Hoyle, regional director of real estate data firm Metrostudy, in her August 2020 report.
This follows national trends: from May to June while the pandemic took its toll on businesses and jobs, the National Association of Realtors announced that pending home sales rose over 16%. NPR’s Planet Money reported last week it was the biggest monthly rise on record.
In the second quarter of 2020, home sales in the Triangle were up 1.9% compared to the year prior with 3,472 new sales in the eight-county greater Triangle region, according to Metrostudy. It’s the highest number of sales recorded by Metrostudy in a single quarter in the Triangle since 2007.
Though sales were projected to decrease due to expected cautious behavior from buyers, “the housing market and its buyer pool has proved to be more resilient and adaptable,” read Metrostudy’s August report.
Analyses from Metrostudy and Triangle Multiple Listing Services say the market’s growth is attributable to low mortgage rates.
The national average for a 30-year fixed interest rate in July was 3.02%, down from 3.77% in July 2019 and from 3.16% in June, said Stacey Anfindsen, a Triangle MLS analyst.
The lower rates have brought down monthly payments even as house prices have increased.
“Many practitioners opine this activity is due to pent-up demand related to government-mandated stay-at-home orders in April and May,” said Anfindsen. “In my opinion, the main driver of activity is related to mortgage interest rates.”
The rates resulted from the Federal Reserve cutting prime rates to spur the economy, said Anfindsen.
The trend of moving away from dense urban areas will accelerate because more people have figured out they can do their jobs remotely and more companies are giving them the ability to do that, he added.
The popularity of the Triangle as place to live hasn’t gone away and sellers have been able to market and list homes virtually.
“In the Carolinas, we continue to be blessed with in-migration, corporate relocations, family following family, people relocating to escape congestion, high taxes and long commutes. COVID has added another reason to move,” said Pat Riley, CEO of Charlotte-based Allen Tate Realtors, in a video presentation.
Inventory was lower in July than June and than a year prior as the pandemic has limited new home construction.
Housing construction starts in the second quarter totaled 3,123 units, down 15% from the same quarter last year, Metrostudy reported.
“Lack of inventory in our markets ensures properties that are well-maintained will sell very quickly as new construction and supply chains have been impacted by COVID-19,” said Riley.
“In these last three months we have doubled our sales,” said Otto Cedeño, the CEO of Movil Realty, a Durham-based realty company. “It’s due to the interest rates being so low. We don’t know how long it’s going to last, so now is the time to buy a home.”
This story was originally published August 21, 2020 at 2:51 PM with the headline "Even in a pandemic, the Triangle housing market is doing better than it did last year."
