Raleigh sees largest decline in inventory over 2 years, ranks top in nation

RALEIGH, N.C. (WTVD) -- There are about half the number of homes for sale across the United States now than before the pandemic.

The shrinking inventory is especially felt in Raleigh. Zillow's latest monthly market report found Raleigh's market experienced the largest decrease in inventory over the past two years.

Raleigh has 70% fewer houses on the market now than February 2020, according to Zillow.

"So, everything got together, and it creates this kind of mess on inventory. We don't have inventory as of now. It's very short," Triangle relator and Movil Realty CEO Otto Cedeno explained.

Cedeno explained on top of the lack of existing homes for sale, new construction is delayed due to a shortage of materials and supply chain challenges. Just in the last month, the area saw a 16% reduction in inventory.

Diminishing supply is met with high demand which leads prices to continue to climb.

The average home value in Raleigh is $133,000 more than in February 2020. Again, Zillow's latest report ranked Raleigh in the top markets for monthly growth in value.

"If you want to compete in this market, you got to put a lot of money into the game; that's the only way you may be able to get a home," Cedeno said. "Our agents are focused on getting listings more than getting buyers because we need inventory."

Zillow's latest report found home values across the U.S. rose by 32% over the last two years.

As housing prices remain high, it drives rent up.

Renters pay around $300 more a month for rent than before the pandemic. In Raleigh, the average monthly rent is around $1,600, a 22% increase from 2020. Zillow found rental vacancy rates are near all-time lows and climbing nearly as fast as home values.

The rising rent elevates the need for more affordable housing but also makes obtaining it difficult.

"People with higher resources can beat out people with lower resources, and that's an affordability issue. So, it's important for us to focus on the broader housing market and try to move forward initiatives that solve that bidding war piece but also to move forward and really focus on supporting those of us who are more vulnerable in our community," Wake County's deputy director of housing Alecia Arnold said.

Arnold said the influx of federal funding during the pandemic has put the county in a position to be able to test new pilot programs.

The county is working to provide financial incentives to developers if they keep units affordable and funds to prevent foreclosures.

Recent efforts have created around 2,500 new affordable rental and ownership units over the past three years.

"We don't want to make a place for somebody by cutting out somebody," Arnold said. "We want to make it an opportunity for everyone by kind of creating innovative opportunities for those things to exist."

Arnold said in the future the county hopes to focus on investing in more resources to help connect more residents with affordable homeownership opportunities.

"The goal really is to create a ladder. And so, we want people to be able to work their way up that ladder, and to not just get stuck at one part of the housing continuum," she said.

Arnold also pointed to increasing discussions about changing land use and density policy.

"We have to begin to really start thinking regionally from a county level and from a specific local level about how we continue to push out our housing trends and our housing policies as it relates to the growth that we're seeing," Arnold said.

Cedeno is hopeful that inventory will bounce back. He said there are around 2,200 permits pulled for new construction in the Raleigh-Durham market.

"Just think about 2,000 homes being built in the area plus people coming in and putting their houses on the market, plus interest rate goes up, so a lot of people will not buy anymore. So that could stabilize the market a little bit," Cedeno said.

Zillow predicted annual home value will continue to rise until next February. More than six million homes are expected to be sold across the U.S. this year.