Our industry specialist has reviewed and approved the final article. Also, some of the data presented here have been integrated into the Raleigh real estate spreadsheet template.
Thinking of buying in Raleigh? Get our financial spreadsheet tailored to this specific market.
Expecting a decrease in Raleigh's prices in 2025? Think again.
Even with changes in the market, Raleigh's demand is high and supply is tight, pushing prices up.
Let's explore the reasons why costs in this city are set to rise in 2025.
This article gives you valuable insights, but remember, it’s not and will never be investment advice. We pull data from a range of sources to provide you with the most accurate picture possible, yet we can’t guarantee complete accuracy. Markets are difficult to predict. Make sure to do your own research and consult a professional before making any financial moves. Any risks or losses are your own responsibility.
Related analyses:
- Here is why prices are going to climb in 2025 in Charlotte
- Yes, investing in real estate is a solid option in 2025 in Charlotte
- Why investing in real estate might not be the best idea in 2025 in Raleigh
1) Raleigh boasts an impressive livability score of 84, highlighting its exceptional quality of life
Signal strength: strong
The livability score of 84 in Raleigh is a strong indicator of its appeal, suggesting that more people will want to move there, which can drive up housing demand and prices.
One reason for this excellent score is Raleigh's thriving job market, particularly in tech and research, which attracts professionals seeking employment opportunities. Additionally, the city boasts high-quality educational institutions, including renowned universities, making it a desirable location for families and students.
Moreover, Raleigh offers a vibrant cultural scene with numerous parks and events, enhancing the quality of life for its residents and drawing in newcomers. These factors combined make Raleigh an attractive place to live, which can lead to increased demand for housing and subsequently higher prices.
If the livability score were to drop below 70, indicating a decline in these appealing factors, it might suggest a different trend in housing prices.
Source: AreaVibes
2) In Raleigh, there are only about "0.45 homes" for each person, which is quite limited
Signal strength: strong
In Raleigh, there is approximately 0.45 home per inhabitant, which indicates a relatively low housing availability. This low ratio suggests that housing demand is outpacing supply, a common precursor to rising prices.
Raleigh is experiencing a significant influx of new residents, driven by its thriving tech industry and appealing lifestyle. This population growth is putting pressure on the housing market, as more people are seeking homes than there are available.
Additionally, local insights reveal that Raleigh's urban development is somewhat constrained by zoning laws and geographical limitations. These constraints make it challenging to quickly increase the housing supply, further contributing to the likelihood of rising housing prices in the near future.
If the ratio were to increase to 0.6 home per inhabitant, it might suggest a more balanced market, potentially stabilizing prices.
Source: USCensus
Thinking of buying in Raleigh?
We have a real estate spreadsheet fully tailored to this market. Get it now.
3) Raleigh home values have risen by 6.5% since last year, and this trend may persist
Signal strength: strong
The fact that home values in Raleigh have already changed by 6.5% since last year is a strong indicator that the housing market is on an upward trend. This increase suggests that demand is likely outpacing supply, which often leads to rising prices.
Currently, the median home price in Raleigh is around $437,102, which reflects the growing interest in the area. Additionally, the median sales price per square foot is around $243, further supporting the notion that property values are appreciating.
These statistics are important for potential investors because they highlight a market that is gaining value. If this trend continues, housing prices in Raleigh could continue to rise into 2025, making it a potentially lucrative investment opportunity.
However, if the rate of increase were to drop significantly, it might signal a stabilization or decline in the market, which would require a reassessment of investment strategies.
Source: Redfin
4) Three major websites predict that home prices in Raleigh will rise in 2025
Signal strength: strong
There are currently three major websites forecasting a positive growth for home prices in Raleigh in 2025, which is a promising signal for potential investors.
Among these forecasts, Realtor is the most optimistic with a projected increase of 9.00%, followed by Redfin's forecast of 4%, and finally, Zillow predicts a 2.60% rise in home prices. This range of predictions shows a significant gap, indicating varying levels of confidence in the market's growth potential.
While these forecasts are encouraging, it's important to remember that predictions should be taken with caution as they are based on current trends and assumptions. We will also rely on strong, reliable, and actual data to make a more informed and professional judgment about the market's future.
If these forecasts were to predict a negative growth or a decline in home prices, it would suggest a different outlook for the Raleigh housing market in 2025.
Sources: ZillowForecasts, RedfinForecasts, RealtorForecasts
How much cash flow can you generate in Raleigh?
Get a clear view of your next investment, with all the metrics explained and reviewed accurately.
5) Selling a house in Raleigh now takes 30 days, compared to the previous 40 days
Signal strength: moderate
In the Raleigh housing market, the time it takes to sell a house has decreased from around 40 days to now just 30 days. This change indicates that homes are selling faster, which often suggests increased demand from buyers.
When demand rises, it typically leads to higher competition among buyers, which can drive up prices. This is a common pattern in real estate markets, where shorter selling times often correlate with price increases.
For potential investors, this trend is a signal that housing prices might be on the rise in the near future. However, if the selling time were to increase back to 40 days or more, it could indicate a cooling market.
Source: Redfin
6) In Raleigh, home prices have consistently risen by an average of 8.3% each year over the past decade
Signal strength: moderate
The fact that home prices in Raleigh have appreciated at an average rate of 8.3% over the last decade is a noteworthy signal for potential investors. This historical growth rate suggests that there has been a consistent demand and upward trend in housing prices in the area.
While this positive 10-year average indicates a history of price growth and favorable market conditions, it's important to remember that past performance doesn't guarantee future results. However, such a trend can still be a valuable indicator when considering future investments in the Raleigh housing market.
Investors should consider this data as part of a broader analysis, as it reflects the area's economic health and attractiveness to homebuyers. If the appreciation rate were to significantly drop, say below 3% over a similar period, it might suggest a different market outlook.
Source: NeighborhoodScout
Get our spreadsheet tailored to Raleigh!
Our tool covers everything: NOI, COC, Cap Rate, Gross Yield, Net Yield, LTV, ROI, and numerous other metrics and charts.
7) Raleigh boasts a strong employment rate of 70.7%, indicating robust job availability
Signal strength: minimal
The employment rate in Raleigh is at 70.7%, which is considered high compared to many other regions in the United States.
This high employment rate suggests that more people have stable incomes, which can lead to increased demand for housing as people look to buy homes. When more people are employed, they are more likely to invest in real estate, driving up housing prices.
Raleigh's economy is supported by three major employment sectors: technology, healthcare, and education. Companies like IBM and Cisco are significant employers in the technology sector, while healthcare and education also provide numerous job opportunities.
If the employment rate were to drop below 60%, it might indicate a weaker economy, potentially leading to a decrease in housing demand.
8) In Raleigh, about 27% of homes sell for more than their listing price
Signal strength: minimal
In Raleigh, around 27% of sales close at a price higher than the listing price, which is a strong indicator of demand. When buyers are willing to pay more than the asking price, it often means that competition among buyers is fierce and they are eager to secure a property.
This kind of market behavior typically suggests that housing prices are on an upward trend. As demand continues to outpace supply, sellers can expect to receive offers that exceed their initial expectations, further driving up prices.
For potential investors, this is a signal that investing in Raleigh's real estate market could be a profitable decision. However, if the percentage of sales closing above the listing price were to drop significantly, say below 10%, it might indicate a cooling market where prices could stabilize or even decrease.
Source: Zillow
Don't lose money on your next property in Raleigh!
Unprepared first-time buyers often end up losing money. Invest only after reviewing all the performance metrics. Get our spreadsheet tailored to Raleigh.
So, are prices going to climb in Raleigh in 2025? Absolutely
Raleigh's housing market is poised for price increases in 2025, driven by several compelling factors.
First, the city's livability score of 84 highlights its exceptional quality of life, attracting more residents and boosting housing demand. With a thriving job market and high-quality educational institutions, Raleigh is a magnet for professionals and families alike. This influx of new residents is putting pressure on the housing market, as evidenced by the 0.45 home per inhabitant ratio, indicating demand is outpacing supply.
Moreover, home values have already risen by 6.5% since last year, and major forecasts predict further growth, with Realtor projecting a 9.00% increase. The trend of homes selling faster, now at 30 days compared to 40, and 27% of homes selling above listing price further underscores the competitive market. With a historical average appreciation rate of 8.3% over the past decade, Raleigh's real estate market is set for continued growth, making it a promising investment opportunity.