RALEIGH – All across the Triangle, competition in local real estate markets is pushing the price of winning a contract higher and higher.
How much higher? There’s no peak in sight – at least not right now.
A new analysis of real estate market data from July 2021 finds that in 60 of 66 Triangle zip codes, the average home is selling for more than the list price of the home.
Why? Location – and more.
The study, conducted by Orchard, a technology-enabled company that entered the Raleigh-Durham market in March, notes that Triangle area real estate is in high demand due to high-quality jobs, the emergence of a strong technology market, an influx of out-of-state buyers and a high quality of life in the area.
“One of the biggest factors impacting the market right now is that we’re seeing an influx of buyers from out of state,” said Meredith Gilley, regional sales manager for Orchard, in an interview with WRAL TechWire. “Now with companies moving their HQ to the area, we are seeing people come from other states in droves.”
Here’s the list of hottest zip codes:
1. 27518: Cary, NC
- Recent list price average: $544,137
- Net sold price average: $609,760
- Percent difference: 112.1%
2. 27560: Morrisville, NC
- Recent list price average: $491,250
- Net sold price average: $542,544
- Percent difference: 110.4%
3. 27712: Durham, NC
- Recent list price average: $335,586
- Net sold price average: $370,313
- Percent difference: 110.3%
4. 27511: Cary, NC
- Recent List Price average: $496,344
- Net Sold Price average: $535,733
- Percent difference: 107.9%
5. 27519: Cary, NC
- Recent list price average: $621,838
- Net sold price average: $670,428
- Percent difference: 107.8%
6. 27713: Durham, NC
- Recent list price average: $435,083
- Net sold price average: $468,917
- Percent difference: 107.8%
7. 27513: Cary, NC
- Recent list price average: $546,763
- Net sold price average: $587,550
- Percent difference: 107.5%
8. 27253: Graham, NC
- Recent list price average: $231,928
- Net sold price average: $249,063
- Percent difference: 107.4%
9. 27540: Holly Springs, NC
- Recent list price average: $466,385
- Net sold price average: $498,301
- Percent difference: 106.8%
10. 27502: Apex, NC
- Recent list price average: $507,820
- Net sold price average: $542,568
- Percent difference: 106.8%
Homes are selling for above list price in many parts of the Raleigh-Durham area, but in these top 10 ZIP codes, 87% of homes sold above original list price — compared to 79% of homes selling over list price across all ZIP codes we measured.
“Companies that are looking to relocate to the Carolinas, they see all of the things that North Carolina offers, and there’s a lot of benefits for how it looks from a real estate perspective,” said Kyle Rush, North Carolina general manager at Offerpad, an iBuyer that is active in the Carolinas, including the Triangle, Triad, Charlotte, and Fayetteville areas.
The recent surge in the real estate market, in part due to low housing supply, is pushing many prospective buyers to increase their offer price for any given home, a company spokesperson. Some offers are even $1 million above asking, reported WRAL earlier this month.
“A lot of folks are taking the opportunity, gosh, they’ve been sitting in their homes for so long, and interest rates are so low, so they’re looking to take advantage of what’s happening in the economy,” said Rush. “Folks have seen that the real estate market is always moving, and asking how long this price appreciation is going to go on before it normalizes, so there has been a little bit of urgency in the market,” he added.
Inventory in listings remains low, however, and new construction is currently not adding enough housing supply to keep up with demand, and prices of new construction homes are increasing in the Triangle, up 18.4% year-over-year, found one recent study.
Full data for Raleigh-Durham area codes
Below is a table of the data for all 66 Triangle-area ZIP codes we analyzed.
Data comes from RDU MLS. Orchard analyzed RDU ZIP codes and compared where the net sale price average was highest compared to the recent list price average for all transactions in July 2021. A minimum of 10 transactions were required for a ZIP code to be included in our analysis.
“Raleigh-Durham has long been playing catch up with other markets when it comes to new construction,” a spokesperson for Orchard told WRAL TechWire. “Take that and add in a record number of people moving to the Triangle, a pandemic, material and labor shortages, and it’s been hard for the builders to keep up.”
Together, these factors are yielding a highly competitive market, the Orchard spokesperson told WRAL TechWire. Just how competitive is the market? According to the spokesperson, 79% of all homes sold in July in these 66 zip codes sold for above list price. And six of the top seven zip codes are in Cary or in Durham, which both recently ranked among the hottest seven real estate markets in the country for mid-sized cities.
And in the 10 zip codes where over-asking offers were, on average, the highest, by percentage, 89% of homes sold in these zip codes were sold above list price.
So, what’s happening?
Buyers want to have a house, said Gilley. “To be able to put their kids in school, to start their jobs, without continuing this home search process indefinitely or to start renting instead.”
“To do that, they’re going to need to win in multiple offer scenarios,” Gilley noted. That’s why homes are selling for above asking price, she said.
Durham, Cary join Raleigh on hottest US real estate market list, study finds
“From a location standpoint, Durham- and Cary-centered ZIPs are some of the most competitive in the area, especially in the resale market,” said Gilley. “Much of the western part of the Triangle is very competitive, which is forcing people to spend over asking price.”
How much over asking? As much as 112.1% of list price in Cary’s 27518 zip code, the data showed.
Digging into the data
In 29 of the 66 zip codes analyzed, the average contract price was at least 105% of the list price of the property, or higher.
“We’re seeing people pay above list price across both affordable and expensive zip codes,” said the Orchard spokesperson. Yet, homes in the segment of the market that are listed below $1 million in asking price do tend to have a larger potential buyer pool, said Gilley. “Which makes that market more competitive.”
Homes listed between $100,000 and $700,000 consistently closed above asking price, Gilley noted, no matter their zip code. As of the latest data, through August 27, noted Gilley, the median price point for actively listed homes available on the open market in the region was $395,900, with an average list price of $520,627, with 3,029 active listings.
For sales in July 2021, though, the final agreed upon price was at least 100.1% of the list price, or higher, in 60 of 66 zip codes in the region, Orchard’s data showed.
“At the end of the day the market is determined by what people are willing to pay for homes, and in this case the price is fair considering the demand,” said the company spokesperson.
The six zip codes where contract price, on average, was lower than list price, were in Zebulon (27597), Roxboro (27573), Princeton (27569), Rocky Mount (27804, 27803), and Dunn (28334).
Yet, even in those areas, said Gilley, their real estate markets are strong.
“Even though they aren’t seeing offers reach 100% of recent list price,” said Gilley. “Are still very robust markets that are doing a lot more business than in previous years.”
“In a post-pandemic world where people have the opportunity to work from home on a more permanent basis, they no longer need to be close to downtown or to work centers like RTP as commute times aren’t as much of an issue,” said Gilley.
“There are some markets throughout the country that may look at or call for some type of normalization that’s happening in the market,” said Rush.
“It’s not a slowdown, it’s a normalization, but what we see here in the Carolinas is actually the opposite of that,” he said. “We’re continuing to see more and more homes being listed, but going under contract faster.”