Raleigh Real Estate Picture a Mix of Sun and Clouds

The Raleigh real estate picture can be compared to that weather forecast that cannot be summed up on one word. It’s like one of those winter days when there is going to be a mixture of sun, then rain, then maybe a wintry mix of precipitation. No one will dispute that the real estate market is in the winter season across the country. However, Raleigh is one of the fastest growing metropolitan areas in the country and sees more sunshine than other areas. While homes sell just as fast as or faster than they did before the recession (lots of sun there), the home prices have declined in some areas (here comes the clouds).

According to Trulia.com, which reports on real estate for communities across the country, the average price per square foot has been unchanged since last year at $115. The average listing price for a home though is declining. For the week ending Jan. 20, the price was $328,427, down 3.2% from the previous week. But home sales increased 5.7%

But the outlook for Raleigh real estate varies greatly by neighborhood and may explain why home prices have declined while sales have increased. The market for luxury and upper middle class homes has been taking a nosedive. Let’s examine that market first.

• Home prices have declined in upper middle class neighborhoods. For example, in the Six Forks area of Raleigh, prices declined by 6.6%, according to figures from Zillow.com from 2009. The median listing price for a home is $435,000 but the median sales price was only $290,600.The median income is $53,700.
• Another prestigious area of Raleigh is in the northern part of the city. Northwest Raleigh residents have a median income of $68,038. Median home sales however have dropped 6 percent. The median list price is $244,700 but the median sale price is $193,900.
• The Five Points area is a mix of historic homes and newer homes. The area has seen the median home price decline by 6.5%. The median list price of a home is $385,000 but the median sales price is $263,800. The neighborhood is known for its mix of urban single professionals. More than 40 percent of residents are in their 20s and 30s.

Despite the bleak picture in the upper middle class and luxury Raleigh real estate market, the forecast has been sunny for lower priced homes. Let’s look at some of those neighborhoods.

• In the South Central area of Raleigh, home prices increased by 16.3 percent, according to Zillow.com. The median listing price is $80,000 but the average sales price is $125,000. South Central Raleigh is an urban area and 40 percent of the people who live there are single. The median income is $21,300. More than 35 percent are in their 20’s and 30’s.
• East Raleigh home prices have increased 2%. The average list price was $150,000 and the average sales price was $158,000. This neighborhood is a working class neighborhood with a smattering or low income professionals living in the area. The median income is $35,974.

As noted in the statistics, lower income home buyers in Raleigh seem to be the ones making most home sales in Raleigh. It’s hard to pinpoint the exact reason, but the $8,000 tax credit for homebuyers may be why. The tax credit was extended by President Barack Obama until April 30, 2010. The credit may appeal more to buyers in the Raleigh real estate market with lower incomes.