Durham, North Carolina, is a city that stands out in the real estate market. With a population of around a quarter million people and located in the Durham-Chapel Hill area, this vibrant city is part of a larger metro area that includes Raleigh and Chapel Hill. The Durham housing market has seen substantial growth, thanks to its abundant job opportunities and reasonably priced houses.
Image source: Durham Housing Market
Durham offers immense promise for real estate investors. The enduring appeal of the Triangle area, with its well-educated population and diversified economy, continues to attract new residents and those from out-of-state. As a result, the rental demand in Durham, North Carolina, is continuously surging.
Current Durham Housing Price Trends 2023
Durham County Housing Price Trends
- Median Sales Price: $420,000 (+6.7% year over year)
- Average Sales Price: $491,854 (+14.8% year over year)
- Median Days On Market: 19 (-32.1% year over year)
- Percent of Original List Price Received: 98.7% (+2.3% year over year)
Durham County Sales & Housing Supply
- Closed Sales: 291 (-20.7% year over year)
- New Listings: 335 (-6.9% year over year)
- Inventory of Homes for Sale: 576 (-26.1% year over year)
- Months Supply of Inventory: 1.8 (-5.3% year over year)
Triangle Region Housing Market Trends
The Durham Regional Association of REALTORS® and the Triangle Multiple Listing Service (TMLS) provide detailed insights into the housing industry in the greater Triangle region, which encompasses 16 counties. In October 2023, significant trends and changes in key metrics were observed compared to the previous year.
New Listings Surge
In October 2023, the region experienced a notable increase in new listings, rising by 6.9 percent to reach a total of 3,509. This surge reflects a dynamic real estate market, suggesting increased interest and activity among both buyers and sellers.
Under Contract Sales Soar
Under Contract Sales witnessed substantial growth of 11.8 percent, totaling 2,828. This surge indicates a strong demand for properties, possibly driven by favorable market conditions, low-interest rates, or other factors influencing buyer behavior.
Inventory Levels Experience Decline
However, the positive momentum is countered by an 11.9 percent decrease in inventory levels, resulting in 6,484 available units. This decline may impact the choices available to potential buyers, potentially contributing to increased competition in the market.
Closed Sales Decline
Despite the growth in new listings and under contract sales, the overall closed sales experienced a decline of 10.5 percent, totaling 2,757. This dip could be attributed to various factors, including potential challenges in the closing process or shifts in buyer behavior.
Median Sales Price and Affordability
The Median Sales Price saw a modest increase of 1.3 percent, reaching $400,000. This increment suggests a steady appreciation in property values. On the other hand, the Year-to-Date Housing Affordability Index stood at 68, marking a 6.8 percent decrease compared to October 2022. This index is a crucial measure of housing affordability, indicating the region's economic dynamics.
Days on Market and Months' Supply of Inventory
Interestingly, Days on Market remained stable, showing no significant change at 24 days. This statistic reflects the average time a property stays on the market before being sold. Additionally, Months' Supply of Inventory remained consistent at 2.2 months, providing sellers with confidence in market stability.
Image source: Durham Housing Market Forecast
Durham Housing Market Forecast 2023-2024
Durham, North Carolina, is expected to see heavy population growth in the next decade, with an additional seventy thousand people contributing to the demand for properties. Factors such as job opportunities and the presence of local colleges attract a young population, driving the demand for rented houses and property purchases. The limited inventory and strong demand have led to price increases in the Durham real estate market.
The Durham-Chapel Hill housing market forecast for 2024, as projected by Zillow, indicates a positive trend with an expected increase of 0.9%. This reflects a steady appreciation in property values, making the area attractive for potential buyers and investors.
Key Metrics (October 31, 2023)
- Average Home Value: $401,637
- Year-over-Year Increase: 1.1%
- Days to Pending: Approximately 10 days
Analysis of Key Metrics
The balanced market is reflected in the median sale to list ratio of 1.000, where properties are typically sold close to their list prices. The median sale price of $397,333 and median list price of $426,650 indicate a competitive market with strong property values.
Furthermore, the percentage of sales over list price at 44.0% suggests a market where buyers may need to offer prices higher than the listed values to compete. On the other hand, the percentage of sales under list price at 39.6% indicates that negotiating below the asking price is still a viable option for a significant portion of transactions.
Durham Real Estate Investment Overview
Durham, North Carolina, has become a prime location for real estate investors looking to tap into the growing economy of the Research Triangle Park. The city offers a wide range of investment opportunities, from residential to commercial properties. Its strong job market, favorable tax policies, and affordable cost of living make Durham an excellent place to invest in real estate for the long term.
Top 6 Reasons to Invest in Durham Real Estate for the Long Term
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Growing Economy: Durham is one of the fastest-growing cities in the United States, thanks to the growth of the Research Triangle Park. This concentration of high-tech companies has led to significant job growth and a booming economy, making Durham a stable and thriving market for real estate investors.
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Job Growth: Durham's job market is strong and continuing to grow. With a low unemployment rate and well-paying jobs being created in various sectors, there is a stable source of rental income and strong demand for homes to purchase.
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Affordable Cost of Living: Durham offers an affordable cost of living, with median home values below the national average and a cost of living 8% lower than the national average. This allows investors to purchase properties at a relatively low cost while enjoying a strong return on investment.
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Favorable Tax Policies: North Carolina has some of the most favorable tax policies for real estate investors, including a low state-income tax rate and no inheritance tax. This makes it an attractive destination for investors looking to maximize their returns.
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Diverse Real Estate Market: Durham provides a diverse range of investment opportunities, from residential to commercial properties. This diversity allows investors to build a diversified real estate portfolio and ensures that new investment opportunities are always available.
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Quality of Life: Durham offers a high quality of life, with top-rated schools, a thriving arts and culture scene, and access to outdoor recreation opportunities. This attracts a diverse range of people to the city, creating strong demand for real estate investments.
Remember, investing in real estate is different from buying an owner-occupied home. It's essential to analyze properties as income-producing entities and consider market trends and economic indicators.
Sources:
- Durham Regional Association of REALTORS®
- Triangle Multiple Listing Service (TMLS)
- Zillow
- Neighborhoodscout
- Realtor.com
