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Raleigh, NC Housing Market – Will 10% Unemployment Crash this Market?

Posted on | March 27, 2009 | No Comments

raleigh-nc-housing-marketToday’s unemployment data showed that North Carolina has an unemployment rate of 10.7%.  While this is the unemployment for the entire state, it is sure to shake the Raleigh economy.  Recently, IBM decided to cut jobs in RTP which will leave over 300 jobless.  There are no doubts that many more job cuts are to come as companies continue to downsize in attempts to produce a profit.  With unemployment increasing, it is only time before we see the Raleigh Housing Market head south.

Housing Tracker shows that Raleigh has not seen a severe decline in median home prices.  The peak of median home prices was achieved in June of 2008 which is much later than most markets.  The median home price of $252,127 was bound to retreat as the entire country was going through a recession.  Since then, median home prices in Raleigh have fallen to $229,925, an 8.8% drop.  This drop is nothing when compared to the bubble markets of Phoenix, Las Vegas and Los Angeles.

Unfortunately for those in the Raleigh Housing Market, we are just starting to see the decline in home prices.  A further decline is likely as the housing inventory remains above 16,000 and has been steadily increasing over the last five years.  Now that individuals are starting to lose their jobs, the once immune housing market might see a steep decline in value.

Another issue that I see with the Raleigh Housing Market is that those who are moving to Raleigh cannot unload their anchors in other parts of the country.  I know at least three families that have moved to Raleigh in the last six months who cannot sell homes in other areas.  They are now renting in Raleigh as they cannot afford the burden of two mortgage payments.  I think this is going to happen more and more as home owners realize they cannot sell their homes.

Ultimately Raleigh remains one of the best cities to live in America and was recently rated the #1 place to do business in 2009 by Forbes.  We might see a decline in home prices in the near term future, but the long term future remains bright for the capital city of North Carolina.

Category: Housing Markets

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