Buying a home in the Triangle? Here’s your insider’s guide to navigating a tough market

Thinking about buying a home in the greater Triangle area? You may need some guidance before you wade into one of the most competitive markets in the country.

In the first quarter of this year, home sales in the Triangle were 6% higher than the same period last year and home prices were 12% higher, according to the Triangle Multiple Listings Service. Meanwhile, the number of listed homes dropped by a tenth.

Charlotte-based mortgage site LendingTree ranks the Raleigh metro area as third in the country for the competitiveness of its home buyers, all while North Carolina home price growth rates reached a 30-year high in 2020.

Due to the pandemic, the Triangle turned into even more of a seller’s market where low housing supply, high demand and high prices mean it’s more difficult than before — but not impossible — to buy the home of your choice.

Add to that recent major jobs announcements from Apple, Google and other biotech companies, and the Triangle can expect thousands of new people to move here — on top of the steady stream of new people coming here already.

Buyers just need to be ready for anything, real estate agents told The News & Observer.

“That’s the biggest thing that we’re seeing,” said Dave Wylie of Spotlight Realty. “Because houses go so, so fast, that if you aren’t pressed to go 100% as soon as something comes on the market, you’re probably going to lose.”

The News & Observer spoke with three real estate agents who sell homes across the Triangle about how to find the home of your choice in this bustling housing market: Wylie, Camille Malcolm of United Real Estate Triangle and Doris Ramirez of Movil Realty.

Here are some of their tips. The interviews have been condensed for clarity.

What conditions in the Triangle market are buyers facing?

It’s a seller’s market.

“There’s no two ways about it,” Wylie said.

There is a less than one month of supply on the market, meaning it would take less than 30 days for all homes to be sold without any additional supply. That’s far less than the six months of supply needed for a balanced market.

“Houses are staying available for sale for less than five days,” Malcolm reports.

That means a lot of things. For one, it means buyers need to know they’ll have to move quickly if they see something they like.

Malcolm said people need to understand that the supply of affordable housing is low and the demand continues to increase. People are moving to the Triangle every day, and new jobs are being announced, so more people are on the way.

“Definitely remember that markets change daily, homes become available daily, and homes sell daily,” Malcolm said. “So things are going to change very constantly.”

Buyers will need to be prepared.

Buyers need to get an agent and have a pre-approved mortgage from a qualified lender, not just pre-qualify for one, Wylie said.

“What I tell all buyers is right off the jump, we need to have all of our ducks in a row,” Wylie said. “And that way, when you do see something that comes up, you can act on it quickly. ... You really do want to be the first person in that house to see it — and hopefully the first offer as well.”

Ramirez of Movil Realty adds she has seen preferences for cash and conventional loans as well as high due diligence. That’s the nonrefundable deposit that buyers give to the seller “to compensate the seller for the due diligence period, during which the buyer may decide whether to proceed with the transaction,” according to the N.C. Real Estate Commission.

“Those are the ones that are winning the offers the most,” Ramirez said. “You’re showing the motivation that you have for the house.”

Buyers should expect to offer more — much more — than the asking price.

In April, the average price for a home in the Raleigh metro area was $411,000 and the average price in the Durham-Chapel Hill metro was $469,000. The price growths compared to the year before were 12% and 17%, respectively.

Realtors report that most offers are above the asking price, and some sellers won’t even bother with offers below that.

“People are having to offer $30,000 above asking price, and sometimes even in cash, and those are the people that are winning all these offers,” Ramirez said.

“Don’t be scared to put your best offer, if you fall in love with the house,” Ramirez said. “You have to show the seller that you really do care about that house, that you want it no matter what.”

She said this is seen beyond places like Raleigh and Durham, but also for homes in suburbs like Creedmoor, Burlington, Graham and Mebane.

Buyers should expect to pay closing costs.

Buyers will be expected to do more to get the house they want. That means they’ll likely pay the closing costs, Ramirez said. That’s not a given, and you can still negotiate, Ramirez said. But, she said, “it’s so rare for them to put a penny into your closing costs.”

Real estate agent Camille Malcolm, of United Real Estate, stands for a portrait in the empty master bedroom of a home for sale, on Tuesday, April 27, 2021, in Durham, N.C.
Real estate agent Camille Malcolm, of United Real Estate, stands for a portrait in the empty master bedroom of a home for sale, on Tuesday, April 27, 2021, in Durham, N.C.

What tips do you have for home buyers, especially first-time buyers?

If you’re in college now and thinking of buying a home, start now. Take a look at your debts and talk to a lender.

“Being very smart with your spending, you know, it obviously never hurts to start saving money now at any time, right?” Wiley said. “Because that’s going to help with your down payment, but also help with your pre-approval.”

Make sure credit is in check and things like credit card bills and student loans are paid in time. That all affects credit scores.

For students who are graduating and hope to buy in the summer or fall, it’s not too early to talk to a lender, Wiley said. They might advise putting off buying for a year or two until student loan debt is under control.

Recent built homes on Canyon Shadows Court in Cary, N.C., Tuesday, April 27, 2021.
Recent built homes on Canyon Shadows Court in Cary, N.C., Tuesday, April 27, 2021.

Have reasonable expectations.

Malcolm said buyers should research neighborhoods and houses at least a few months before they’re ready to secure a loan or make an offer to assess what they can afford and what they’re willing to spend that may exceed their budget.

“Just so you can see what you’re looking for and how much what you’re looking for actually costs,” Malcolm said. “Making sure that what you want is definitely within your budget, or increasing your budget so that you can get what you want.”

First-time homebuyers also should know that the first house they buy might not be their forever home, Wiley said. And that’s OK.

“What you’re really trying to do as a first-time homebuyer is get a place that you do love,” Wiley said. “But that way, you can start building equity in your home. And so, when you do, two, three, four years down the road, decide to sell it and maybe upgrade, you’ve built that equity. And now maybe you have a better shot in the finances to get a dream house if you want to do it that way.”

Broaden your search.

Expand your geographic search. In many cases, though not all, leaving urban centers means more affordable housing, Wylie said.

“And just being able to do that and being willing to do that is really going to help you,” Wylie said. “Because you can get something that’s not too far away from where you want to be.”

For example, you may want to live in downtown Durham, which has rapidly rising property values. Wylie suggests looking north — north Durham, Creedmor and Butner, for example — where a drive to downtown isn’t too far.

Think about your budget and timing.

Ramirez says now is the time to take advantage of low interest rates on mortgages.

“The interest is what changes everything,” Ramirez said.

“The first thing that buyers should ask themselves is: ‘Am I willing to put a little extra in?’ because remember, we are offering over asking price,” said Ramirez. “And these interest rates, they’re not going to remain this low forever, they’re actually rising back up. So if you already have right now that low interest rate, you’re still going to be paying less now, even if you offer more in the future.”

In other words, when those interest rates increase in the future, home buyers not only will pay more in interest but also in sale price and mortgage payments.

Be sure to check the finer details: North Carolina is a ‘buyer beware’ state.

Property tours might only be 30 minutes, so make the most of your time in the house, Malcolm said. That attention to detail, including damage or flaws, can help during negotiations, she said.

“If you’d have legitimate reasons of why you wouldn’t pay more, I’ve seen situations where the lower offer got the contract,” Malcolm said. “I definitely would encourage buyers to seek out all the details of a property before they submit their offer.”

Real estate agent Camille Malcolm, of United Real Estate, showed the unfinished attic of a home for sale, on Tuesday, April 27, 2021, in Durham, N.C.
Real estate agent Camille Malcolm, of United Real Estate, showed the unfinished attic of a home for sale, on Tuesday, April 27, 2021, in Durham, N.C.

What should out-of-state buyers know when looking for a home here?

Understand North Carolina real estate practices.

That’s the due diligence fee that not all states require. Wiley said he has had to have “painful conversations” with out-of-state buyers about what that entails and what’s at stake.

“It goes towards the purchase price of the home, but that money is gone,” Wiley said. “If you decide to walk away from the contract, that is something that most states don’t do.”

Find a professional who knows the area.

North Carolina has its own way of doing things, and Malcolm said buyers will want to hire someone who knows the ins and outs of those practices, in addition to knowing things like hot neighborhoods, school districts and prime locations.

If you come to visit the area to buy a home, you may buy one that day.

Ramirez recalls a time when a client visited a house “literally eight minutes after it went active on the market” and got the house under contract within an hour.

“Like that’s how fast you got to be to just beat everyone to the house,” Ramirez said.

So, should I just rent then?

Not necessarily.

“Even when it comes to rentals, our rental market is even crazy right now,” said Malcolm. “I had a client offer a year of rent upfront and didn’t get the rental.”

Average apartment rents in the last three months of 2020 across the Raleigh-Durham market were $1,182, according to real estate services firm Avison Young. They’ve continued to rise monthly during the pandemic, although at lower rates than before it began, the firm said.

Occupancy rate has floated around 95% as demand continues to steadily increase, the firm said.

“If anyone has the opportunity to wait (to buy a home), waiting is definitely the best option, even for investors right now,” Malcolm added. “If investors find a great deal on a property, they’ll purchase it. But the value right now is really in holding if you’re rehabbing a property or refurbishing it in any way, because the material prices are so high.”

Townhomes line Mountain Pine Drive in Cary, N.C., Tuesday, April 27, 2021.
Townhomes line Mountain Pine Drive in Cary, N.C., Tuesday, April 27, 2021.

Bottom line, what should buyers know about buying in the Triangle?

Times have changed.

There are many reasons Triangle cities and towns have landed on “best places to live” lists in the past decade, and relatively affordable housing is one of them. But real estate agents caution that the market is different than what it was like just a few years ago.

“I think a big thing that a lot of people do is come up to us and be like, ‘Oh, well, my relative bought a house for this much back then.’ And we’re like, the time has changed, you know, everything changes, everything,” said Ramirez. “The economy right now in North Carolina — it’s just rising so fast, and it’s creating more buyers who want to be here.”

Don’t get discouraged, and be patient.

There’s heartache and heartbreaks in the quest to find the perfect house, Wiley said. But one rejected offer doesn’t mean the search is over.

“This market is incredibly tough, and especially for buyers, obviously, but it is possible,” said Wiley. “Things are selling. Every house has a buyer, so you could be that buyer. ... Even buyers who have done this before face the letdown of not getting a house when you put in a great offer.

“Because you may lose three, four, 10 offers before you get something,” Wiley said. “It’s the people who can run the marathon that are going to end up winning here.”

The market is rough, but it may not always be this way.

Malcolm adds that the market may eventually stabilize. She said she’s seen some good homes stay on the market for up to a month and not always get offers from buyers.

“All of the housing prices that have kind of shot up, due to the demand for the housing, it’s got to come down eventually,” Malcolm said. “We don’t know how the market will self-correct, but it will. It’s going to get to the point where things are just gonna regulate all over again.”