During the 11 years prior to 2016, Raleigh, North Carolina, prospered as a real estate market for foreign investors, but offered a dearth of homes for locals and sharpened its decline in office space demand. Property prices soared faster in Raleigh than the rest of country, though mean housing costs lagged behind the national average.

Market Insights

Starting from 2005, foreign investors, who at one time would have barely stepped foot in the region, started flocking to North Carolina to dabble in equity. In 2015, for instance, the Abu Dhabi Investment Authority bought two Raleigh-located hotels to the tune of nearly $103 million.

Raleigh has become a ferocious seller’s market, with high demand and bidders willingly overpaying in order to buy their homes. At the same time, the inventory remains low. In 2015, Raleigh’s NewsObserver.com noted that inventory levels were down 40% from the same period four years prior. New construction has lagged, resulting in sellers with less competition and buyers with fewer homes from which to choose.

Since 2012, Raleigh has seen escalating land and home costs, though property is still cheaper than in most states. In 2015, FortuneBuilders.com noted that the median home price in Raleigh was $212,500, compared to the median home price in the rest of United States of $216,567. In 2016, Raleigh's average homeowner dedicated 11% of income per month to his/her mortgage payment, compared to the average U.S. homeowner, who allocated about 15.3% per month.

Home appreciation is also rising faster than the national average, with the average home in Raleigh spiking 4.8% in 2015, compared to 4.7% in the rest of the country. This is in contrast to three years prior, when homes in most states appreciated 28%, while homes in the Raleigh area appreciated only about 9%.

As of May 2016, home building lagged, with fewer houses entering foreclosure and fewer homes proclaiming delinquency. In 2015, FortuneBuilder.com reported that almost four out of every 10,000 houses entered foreclosure, but that this number was still lower than the national average. Similarly, only 5% proclaimed delinquency, compared to the national average of 6.4%. The dreaded housing crash of 2008 saw drops in real estate prices for Detroit, San Francisco and Manhattan, but not for North Carolina. Raleigh experienced a real estate boom from 2005 to 2008, then fell and bounced back up after 2012. Young professionals, who are the prime buyers, typically choose not for what they want but what they need. The results are higher demand for homes in tech-heavy, urban areas; smaller and more functional homes; and houses that trend toward eco-conservation. Opulent homes linger on the market.

Property Tax and Transfer Tax

Raleigh residents occupy Wake County. As of 2016, Wake County’s property tax rate is 53.4 cents per $100 of assessed property value. County taxes differ according to region and include several additional factors, such as recycling fees, fire district tax, special district tax, municipal fees and vehicle fees. Raleigh adds its own property tax rate of 37.35 cents per $100 of assessed property value. Residents of Raleigh have to pay taxes set by both Wake County and Raleigh municipality.

Property transfer tax refers to tax paid by the buyer, the seller or by both parties, when property transfers from one to another. Transfer tax depends on the property's sale price. North Carolina sets tax at 1% of the sales price. In North Carolina, the seller pays the total cost.

Most Expensive Neighborhoods

In 2015, Zillow estimated that the median home value in North Carolina hovered around $150,000, with the large metropolitan areas being higher than others. In 2016, Trulia ranked the most popular neighborhoods in Raleigh as follows: Northeast Raleigh, North Raleigh, Southeast Raleigh, Northwest Raleigh and Southwest Raleigh. Prices ranged from the average home listing price of $365,254 in North Raleigh to $140,183 in Southeast Raleigh.

Top Websites

Raleigh Realty Homes provides real estate listings, market data and insights for those who want to sell, buy or lease in Raleigh and North Carolina. At Lindacraft.com, Linda Craft & Team Realtors state that they have been in real estate for 30 years and have helped more than 8,598 people buy and find homes in the Raleigh area. Raleigh Cary Realty provides support, market data, insight and listings. They specialize in all real estate needs in the Raleigh, Cary, Apex, Holly Springs, Fuquay Varina, Morrisville, Wake Forest, Clayton and Garner areas. The Glenwood Agency helps upper-end clients make sound financial decisions in the purchase or sale of their homes. Triangle Real Estate Journal targets all demographics, from first-time homebuyers looking for affordable housing to retiring baby boomers seeking luxurious gated dwellings.

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