State Real Estate Market Outlook
Realty Market Outlook North Carolina State Profile - Spring 2006
Home price appreciation accelerated in 2005
According to the Office of Federal Housing Enterprise Oversight, the house price index for the state rose 8.1 percent in 2005. Median home prices rose by nearly $10,400 last year, which was a record increase and well above the $4,339 average over the last 25 years. Home prices in the Wilmington metropolitan area appreciated most rapidly with an increase of almost $19,000.
Although home price appreciation accelerated in 2005, housing remains comparatively affordable. According to the National Association of Homebuilders-Wells Fargo Housing opportunity index, just 41 percent of homes nationwide are considered affordable for all U.S. households, well over 60 percent of homes sold in the state’s largest metropolitan areas (Charlotte, Greensboro, and Raleigh) would be considered affordable for a families living in these markets.
The pace of home sales is decelerating in the State’s hottest market.
Home sales remain strong statewide. However, in Wilmington, North Carolina’s fastest appreciating market in 2005, the pace of home sales has weakened considerably, even as the inventory of unsold homes has increased. In January 2006 there was a 1.5 month supply of newly listed homes. This was relatively unchanged from the prior year, even though the unsold inventory of newly listed homes increased 23 percent. The slowing pace of home sales and growing inventory levels from a year ago suggest that marketing times may lengthen, potentially leading to slower price gains in 2006.
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