Triad Home Prices Continued To Rise In June

Home prices in the Triad continued to rise in June. That's according to a new study by CoreLogic, a national real estate research company.

In the five-county region of Forsyth, Stokes, Davidson, Davie, and Yadkin, prices rose by 5.1 percent compared with a year ago—the third-highest gain among the state's largest Metropolitan Statistical Areas (MSA). The biggest increase was in the Charlotte-Gastonia-Concord MSA, where prices rose 6 percent year over year. The Greensboro-High Point MSA was slightly lower at 4.2 percent.

It's a seller's market, spurred by a lack of available homes for sale. As of June 30, the unsold inventory as a percentage of all households had dipped to just 1.9 nationwide. According to CoreLogic chief economist Frank Nothaft, that number is at its lowest since the 1980s.

Leonard Ryden Burr Real Estate President Michael Ryden has worked in the industry for 34 years. He spoke with WFDD's David Ford about the rise in home values and shared his thoughts on the housing market moving forward. 

Interview Highlights

On healthy versus non-healthy home price increases:

I think that we're right on target in North Carolina. Being healthy meaning that you don't want to have such a huge increase that if the market slips—like we did in 2008 and had the crash of 2008—to avoid those kinds of situations, it would be healthier to have a five to six percent increase per year. But, if we do have a major slip again in the market with a decrease then you are sort of insulating yourself from having a big crash right here. You know, we fared...fairly well here [in 2008] because we never had huge rises in price ranges. And therefore, when it did come down drastically in the rest of the country, we sustained fairly well through that time.

On how inventory affects home pricing and why it continues to be a seller's market:

That's a matter of supply and demand: the lower the supply, and then an increase in demand; the prices are going to go higher. Our inventory is lower right now merely because we have sold more houses this year over last year. We've actually increased 9.4% in housing units sold over last year at the same time. That's a large increase, so, we're just selling more houses, so that gives us less houses to sell. The inventory is lower, but you see this more in our popular neighborhoods that are desirable, a little closer to the city center. That's where we're really seeing the lower inventories because there's more demand for those particular areas.

On the future of the Triad housing market:

I do think we will see more new construction in the near future to meet the demand for housing. But we will also see with that an increase in house prices because of the rising construction material costs, and land costs. So, you know, that will have an effect on our overall market as far as house prices go. They'll continue to increase.