Home values holding steady in a still-sizzling marketplace

Median home prices have jumped 31% in the last year

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Editor’s note: This is the first in an occasional series examining Chatham County’s residential housing market.

PITTSBORO — A cozy white house on a corner lot in Pittsboro is a perfect fit for Beci Markijohn Beasley and Mike Beasley, and their dogs, a pack of Cavalier King Charles Spaniels and Bohemian Shepherds, which keeps their active lives interesting.

For the Beasleys, who’ve moved to Pittsboro from Apex, the new home is their reward for patience, persistence, and a little bit of good fortune. After months of searching, they closed on it last November.

“We were lucky to find our house when we did,” Beci said. “We made an offer on a Monday, and the next day, as we were finalizing the sale, other people came in and started making offers, but ours stuck.”

The house had been listed in the 2021 Parade of Homes, which attracted would-be buyers. The Realtor.com website and other sites list the sale price for the 2,731-square-foot home at $600,000.

Mike is a firefighter with the Apex Fire Department. Beci is sales support for Principled Technologies and works in sales and marketing for All Star Bikes in Cary. The couple was living in a townhouse in Apex and wanted more space with a yard for their dogs, which they breed and show. They also sought a new home within 45 minutes of Apex that was not part of a homeowner’s association.

It was a daunting process.

When they decided to put their 2,500-square-foot Apex townhouse on the market, they posted a “coming soon” sign on a Friday. By Sunday, someone had put an offer on it, sight unseen. According to realtor websites, it sold for $400,000.

Then they faced mounting pressure to find a new home to move into.

“Many of the re-sell homes we bid on were sold before we could even make an offer,” Mike said. “We lost out on three or four different houses because we were outbid.”

The house they bought was new construction, situated just outside Chatham Forest.

Offers over list price

The Beasleys’ experience is typical of the Chatham County housing market, local realtors say.

Kris Howard, the owner of Chatham Homes Realty, recalled a client who put generous offers on seven houses, and none were accepted.

“My client was willing to pay $50,000 in due diligence and offering $50,000 over the list price, and wasn’t getting the houses,” she said.

Then the client sweetened the pot with $50,000 in due diligence and $200,000 over list and made a purchase.

Due diligence is money buyers pay to sellers to demonstrate their commitment to purchasing a home. If for any reason the sale falls through — even if the buyer has trouble getting a mortgage, or if the home’s foundation is cracked — the seller is entitled to keep the due diligence payment. According to Howard, the typical due diligence offer is around $10,000 but during the real estate frenzy, buyers have been offering large sums, demonstrating their determination to buy their dream home.

“My client took a huge risk, but she vowed to not lose the home, and her strategy paid off,” Howard said.

According to data from the Triangle Multi-Listing Service, the median price for homes in Chatham County in April 2022 was $620,540, which is 31% over April 2021, when the median price was $473,300. The average price of homes sold in April in Chatham was $749,343, a 44.2% jump from last May.

Howard is seeing an uptick in the sale of homes that cost over $1 million.

“We’ve had more million-dollar sales recently than we’ve ever had,” she said. “In the past, we typically would sell maybe five homes in the million-dollar range, and last year, we doubled that number and we’ve sold several for over $2 million.”

Howard attributes much of the high-dollar sales to incoming residents from places where housing costs and home values are even higher than the Triangle area, like California, Michigan, Connecticut and New Jersey.

“They are used to the cost of living being high, so when they come here they see a $500,000 — $600,000 home that we would consider expensive, but to them, that’s a bargain because it would sell for $3 million where they come from,” she said. “So, they either pay cash, or they just buy a 4,500-square-foot house.”

Data from a recent Triangle MLS report shows that median home prices across the Triangle region have swelled from $358,000 to $421,757 in the last year, a 17.8% increase. The Triangle region covers 16 counties in central North Carolina. At $525,000, Orange County has the highest median home price. But Chatham County’s 31% increase in home prices is the highest percentage increase among Wake, Durham, Orange and Johnston counties.

Prices may remain high

An economist from the University of North Carolina at Charlotte says he doesn’t see much change on the horizon, with rising mortgage interest rates balancing housing prices, which are starting to level off.

“If you consider a house today at a 5.5% rate or do you hope the market price for homes falls a little bit and you buy later when the mortgage rates are a little higher?” asked John Connaughton, professor of financial economics and director of UNC Charlotte Economic Forecast.

“In terms of your monthly house payment, there probably won’t be that much difference,” he added.

Some buyers are not fazed by the rising interest rates. For those with pockets full of money, cash is king.

“We are seeing more cash buyers than ever before,” Howard said. And the Beasleys set their sights on more than one home that ended up going for cash.

While housing demand and rising costs are a topic in many places, the Triangle area is a particularly hot market thanks to the economic development activity in the region, fueled by life-changing announcements of new industry, like electric car manufacturer VinFast, FedEx, the Toyota Battery Factory, Apple, Google, and others.

Chatham ‘on fire’

These industries offer a mix of jobs from high-paying tech positions to mid-range labor. And as more business and industry locate in the area, the need for affordable homes is on the rise, too.

“The Chatham market is on fire,” said Holly Fraccaro executive director of the Home Builders Association of Durham, Orange and Chatham Counties. “While the VINFast manufacturing plant is super exciting news, it puts significant pressure on the area to develop housing and to build a wide diversity of housing types and costs, which is challenging.”

She believes building for more density will help alleviate some of the pricing and inventory challenges.

“The reality is that the Triangle grows by over 60 people per day, and we need to lean towards building for more density, which allows for homes that our teachers, service workers and first responders can afford to buy on their salaries.”

Eric Andrews, broker and owner of Realty World Carolina Properties in Pittsboro, agrees there is a need for more affordable housing for those with modest incomes. He recalls earlier times when land in Chatham County was not expensive and homes were built on generous plots. And as the prices began to rise in places closer to Research Triangle Park jobs, people kept moving farther out in search of more affordable homes and land.

“In Chatham County, we typically have placed homes on a half-acre or one-acre plot of land lot or more, but in Cary, you may have a quarter or fifth or eighth of an acre,” he said. “I have sold many homes to Chatham teachers in Sanford or Siler City because Pittsboro, Chapel Hill and Apex grew too expensive. Now Sanford and Siler City are going up in price too.”

Andrews noted that today, in the northeastern part of Randolph County and southern Alamance, the Toyota Battery plant is already impacting the housing prices, which are rising there, too.

“For the last couple of years, it has been as if the asking price for a home was just a suggestion, because and many homes have been going for much more,” he said.

Rural areas popular

Despite the ravages COVID-19 inflicted on the population, the pandemic created a paradigm shift in the way people work, and many people fled their big cities to avoid crowds, heading for more rural areas, including in central North Carolina, Howard said.

“In all reality, we’ve experienced the strongest two years that we’ve ever seen with massive traffic from residents relocating here and retirees,” she said. “We’ve seen tremendous growth in Chatham Park, and we’re also seeing a big boom in the Silk Hope area, where people want a couple of acres or more so they can have a big garden and chickens and room to spread out.”

Fraccaro sees no slowdown in the near term.

“The growth of business and industry will continue to influence the rate at which housing is needed, and I believe the demand is going to continue to outpace the supply for some time,” she said. “We have to do everything we can to unclog the supply chain issues, to produce construction workers, and encourage young people coming out of high school to explore jobs in the trades.”

And while rising mortgage rates may slow the frenzy, the housing market will continue to thrive, particularly in North Carolina’s metro markets, Connaughton said.

“In Charlotte, Raleigh and across the Triangle, the economy is growing very well,” he said. “Even if there is a mild recession later this year or next year, the metro markets will survive fairly well because of the structure of their economy.”

Nine months after moving to Pittsboro, the Beasleys are still settling in. Their house, which was not quite completed when they bought it, is coming along. They have fenced in their backyard and installed a stone patio. They are located close to downtown Pittsboro and are eligible to participate in the Vineyards at Chatham Park amenities. They’re still close to their jobs and friends in Wake County and feel they have the best of both worlds.

“We were lucky to find this house when we did,” Beci said. “All we need here now is a Wells Fargo and a Harris Teeter.”

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