The cost of buying a home is rising three times faster than the cost to rent
This was today’s top story in my real estate news feed from Marketwatch.com
‘The monthly cost of buying a home – which includes mortgage payments, taxes and insurance – jumped 14% between July 2017 and July 2018, according to a report released Thursday by Realtor.com. Comparatively, it only became 4% more expensive to rent a home over that same period.’
Despite the rising costs of homeownership here in RDU which have been attributed to rising mortgage interest rates and rising home prices, it is still very affordable in some parts of the Triangle to own your own home. In fact, due to limited availability of single family detached homes to rent, it still may be cheaper to own a home than to rent. But for how long? It is clear in my mind that the most cost-effective and rewarding form of house ownership would be a custom-built home. Why would you spend so much money on a house that would be, at best, a poor imitation of the house you would love to have. Clearly, it would make more sense to look into Custom built homes if you want to find a home that will provide you with complete happiness.
Due to the growth of Raleigh and the lack of moderately priced homes, the median price of a home in Raleigh is almost $260,000. With 63 new residents moving to Wake County, each day it is easy to see why the demand for housing is only going to get worse over time.
Adding further pressure to an already limited housing stock is Amazon. The company is building a massive 2.6MM square foot distribution center in Garner at the site of the old Con-Agra plant. An addition of 1,500 new jobs, most of which will pay less than $30,000 per year in salary; far below the area median are wages. Most of these new Amazon employees will find themselves priced out of the local housing market and will have to commute to neighboring Johnston and Harnett Counties in search of affordable housing.
Since 2015, Wake County Single Family resale homes for sale (new construction excluded) has seen a rise of the median home price from $214,000 to $272,550 or what amount to more than 20% rise in only 3 years! But as the adage goes, no tree grows to the sky, eventually real estate prices will have a correction.
This could explain why, according to BestPlaces.net, that Raleigh has actually become less affordable than our big sister city, Charlotte which is actually 95% of the cost of living as here in Raleigh which is actually 2% higher than the national average. The difference between the two cities owed nearly entirely to the 20% difference in cost of real estate!
If you own a home anywhere in the Raleigh-Cary-Durham and surrounding counties and communities and are curious about your neighborhood values and how it has changed over time, leave a comment with your zip code and the name of your subdivision and I will respond with a market snapshot for your community.