"Sometimes you could have to spend several thousand dollars over list price and that's tough. It's tough when you're at a lower price point, and you have to be financially-conscious to make a decision to spend that extra money. It makes an impact on your mortgage payment, and that's important to people," said Lili Ball, a Realtor with Allen Tate.
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According to the Triangle MLS, the average sales price in the Triangle region in 2020 was $338,352, a 6.6% increase compared to 2019. Despite a slight dip in the number of new listings, closed sales were up 9%, leading to the average amount of time homes were on the market to drop from 32 days to 26 days.
"Especially for first time home-buyers, it's really hard to understand that you're going to have to pay over list price. So you might miss out on the first couple of houses you make an offer on," Ball said.
The lack of inventory, coupled with population growth and concerns over not enough new construction, are all playing a role in the increasing prices.
"We just have low inventory right now. And so that's causing the housing prices to steadily increase," Ball said.
Though the primary focus for buyers may often be Raleigh, the city's growth is also affecting surrounding communities.
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"It's hard to buy a house under $500,000 inside the beltline in Raleigh, and you can go to Clayton, or Garner or Knightdale and get a fantastic house for $500,000 or $300,000," Ball said.
But there's always a trade-off.
"It certainly forces those who can't afford those prices to start looking further and further away, and that has its own costs to our society in terms of transportation and commuting and what that kind of does to the social fabric of communities," said Pamela Atwood, the Policy Director for the North Carolina Housing Coalition.
Retail and service jobs have been especially hurt by the COVID-19 pandemic, with economists noting the pandemic exacerbated existing inequities and wealth gaps.
"We do not have the supply that is needed to provide housing that is affordable for all people across the income spectrum," Atwood said.
Low interest rates are also spurring buyers' interest in purchasing a home, while giving potential sellers a path to potentially refinance. Though home values have grown, Brad Walker, the Broker in Charge at InfiniEDGE Real Estate Group, cautioned sellers.
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"Even though you may be selling it for 30% more, the thing you're buying is going to be 30% more also," Walker said.
The CDC recently extended its eviction moratorium through March 31, providing temporary relief to those struggling with bills. But Atwood is concerned about what happens once the moratorium expires.
"When people lose their homes, when people are evicted, that has long-term impacts on the rest of their lives. From their ability to find new housing to find new work, where they're going to be able to go to school. Just so many different long-term impacts for folks, and it's just becoming more difficult to reach that middle class lifestyle," Atwood said.
In 2020, Gov. Roy Cooper proposed a $500 million affordable housing bond for this year, but to this point it has not gained much traction.