Here is our Raleigh housing market predictions for 2025. The truth is no one, and I mean no one, really knows what is going to happen. No one predicted the pandemic boom and we don’t have control over global events, which can definitely change a local housing market.
What is happening right now in the Raleigh housing market should shock everyone thinking about buying or selling a home this year.
It’s even shocked me, because I thought the opposite was getting ready to happen.
Goes to show you that magic eight ball just doesn’t always work.
We are already seeing early signs that the housing market is going to BOOM in 2025.
Raleigh Housing Market Booms in 2025
The crazy thing about housing data is that usually people look at the wrong data. If we look at the number of homes that closed this week, that doesn’t tell us what the market is doing today, because those homes went under contract a month or more ago. The world was completely different a month ago.
Articles like this telling us that prices are falling are not giving you the real story. I was almost willing to believe what they were saying, until I saw what I’m getting ready to show you.
The three data points I’m looking at here make me think the housing market is actually going to BOOM in 2025.
#1 Pending Sales are WAY UP in the Raleigh Housing Market!
This week in the Triangle MLS, 67% MORE homes went under contract than in the same week last year.
This is what it looked like last year at this time.
And this is what it looks like now.
But that’s nothing. Because that number includes data from way out in the country. If we pull all that rural data out and look at just Wake County (basically Raleigh and its suburb’s housing market), the numbers get even crazier.
Almost 80% MORE homes have gotten under contract this week in Wake County compared to the same week last year.
The only other time in the last 20 years that sales have been this high in the Raleigh housing market this time of year was December 2019. That year we had 13 more pending sales than we do this year. So it was close.
Even in December of 2006 and 2007, which was the last time the market was really overheated, pending sales weren’t this high. If you don’t recall, those were the years leading up to the 2008 housing crash. There were banks lending to lots of people who weren’t actually qualified to buy, putting a lot of extra demand on the market. It’s much harder to get a mortgage today than it was back in 2007 so even though we’re seeing a spike in buyer demand, it’s not because of loan fraud. It’s due to genuine housing demand.
If it was just pending sales in one week, that might not be enough to predict that the Raleigh housing market is going to boom in 2025. But the relocation data adds another layer to the story.
#2 Raleigh still has one of the Hottest Relocation Housing Markets
According to Redfin, the relocation Boom has finally started to slow down. There has been a 2.1% decrease in people looking to relocate since this time last year. Since Raleigh has been one of the hottest relo markets in the country, any Raleigh housing market predictions for 2025 has to take relocations into account.
But even with the reduction in relocation, according to Redfin’s data from Sept 2024 to November 2024, North Carolina is still the number 2 place in the country for relocation moves, second only to Florida. They don’t give the data by state, but if a 2.1% decrease is the national average, it makes sense that North Carolina is still seeing a growing relocation market.
And this plays out in both cultural stories and in other data sets. In September, Travel and Leisure Magazine called Raleigh the #1 city for quality of life on the east coast. And just this week, two Wake County towns made the top ten list for Move Buddhas booming towns.
They used job market data to rank Cary and Wake Forest on their list:
Using search data from the moveBuddha Moving Cost Calculator, we found that among more than 210K move inquiries made so far in 2024, Just 43 American suburbs are popular with movers and are in metros that have above-average job growth.
So we’re still attracting people relocating from across the country. But at the same time, we don’t have a lot of people leaving the Triangle. In fact, in 2023, our net population change in Wake County alone was plus 19,497 people. And this is putting a huge demand on the housing market.
But how much of the housing inventory is being purchased by this increasing population? If we want to make predictions about the Raleigh housing market in 2025, we’ve got to do some math.
Population change in Wake County, NC
If we gained 19,497 people and we know the average household size is 2.51 people and we know that 65% of those households are homeowners, that means, roughly 5049 homes were purchased by people who were new to Wake County. That’s 33% of all homes sold in 2023.
And here’s the rub. Even though 33% of homes that were sold were needed to support the increased population, only 30% of home sales in 2023 were new construction in Wake County. So in 2023, we didn’t quite build enough homes for the number of families who moved here. We were 3% short.
If we look at it from the perspective of building permits the story looks similar.
Between January 2022 and September 2024, Wake County issued 7411 building permits for residential new construction homes. So in 33 months, Wake County issued roughly 224 building permits per month. But we had 647 households moving here each month.
Let’s do that same math… If 65% of them wanted to buy homes, which is the national average, that means 420 households each month wanted to buy homes but we only built 224 houses for them. So 196 houses per month or 2352 houses per year short. Those households are renting because we didn’t build houses for them. And remember, that’s cumulative. It’s been happening every year since Covid.
So if the spiking pending sales data and the increasing population were the only two things at play here, I probably wouldn’t think we were going to sell a lot of homes this year. There’s one more puzzle piece we need to create a fantastic real estate market this year. And that is housing inventory.
“A Fantastic Real Estate Market”
Just as an aside, when I say “a fantastic real estate market,” what I mean is this:
- There are enough homes for sale to satisfy the demand of people who want, and are able, to purchase a home.
- There are enough buyers in the market to purchase the homes that sellers need to sell.
- The market is balanced enough to preclude insane bidding wars.
- The market is balanced enough to preclude equally insane due diligence deposits on the part of the buyers.
A great real estate market is a balanced market. While a lot of homes were sold during the pandemic relocation boom, there was not enough inventory to satisfy the demand and that lead to the inflation of housing costs and undue stress on everyone involved. No one liked that. But things are changing!
#3 We’re Actually Building Homes in Raleigh
The final piece of the puzzle is inventory. Predictions about any housing market, and especially Raleigh in 2025, has to take new home inventory in account. And new home construction is on the upswing.
In 2024, we actually built quite a bit more housing than we did in 2023.
In 2023 there were 16,645 homes listed in Wake County. And in 2024 so far, we have listed 19,161. That’s 15.1% more listings than in 2023.
Based on the amount of inventory available right now, Cary, Apex, Holly Springs and Garner are all sellers markets with less than 3 months of inventory. But the housing inventory isn’t evenly distributed throughout the Triangle. Right now, Fuquay, Clayton and Zebulon all have 6 months or more of inventory.
Six months is the amount that is considered a buyer’s market. Typically in a buyer’s market there is more room for negotiation. We see a lot of price drops. Due Diligence fees are low or non-existent.
But, before we jump to conclusions about skyrocketing inventory like that headline did, we need to look a little deeper.
New Home Construction Data
Remember I said that new construction inventory is about 30% of homes sold in the Triangle. In these towns with “skyrocketing inventory” the ratios are a bit different.
In Fuquay Varina and Zebulon, 55% of listings are new construction. And in Clayton, 48% of listings are new construction. Compare that to the areas that are sellers markets right now: Only 38% of Apex sales this year were new construction, 35% of Garner’s sales were new construction, 21% in Holly Springs and 5% of Cary.
But the increased levels of inventory that makes it look like a buyers market in the areas with a lot of new construction is actually NORMAL this time of year.
Most of these listings aren’t even finished yet. They typically pull permits and then list the home in the MLS once construction has gotten underway. These homes are being built in preparation for the demand the builders expect in the spring market.
And following the money isn’t a bad idea, builders that have made it through these tough times aren’t likely to gamble. They think these houses are going to sell.
The best housing markets around Raleigh for Buyers!
As an aside, I will say that there are likely some GREAT deals in Clayton and Zebulon RIGHT NOW.
In Clayton there are 174 existing homes for sale and only 15 of them are under contract. And in Zebulon, there are 55 existing homes for sale with only 5 under contract. This is not including new construction which is going to add a ton more housing to the market shortly.
Now I personally think the spring market will eat up this inventory because of everything I just told you about housing demand in the Triangle.
But if you’re interested in the Clayton and Zebulon areas, and you can get under contract before the new year, I think you can get a deal. You can browse our best neighborhoods pages for Clayton and Zebulon or learn about them in our city guides for Clayton or Zebulon
If you want to see our 2023 and our 2024 housing market predictions, browse on over and see what you think! Did we get it right?