Quick Launch

Wake County News > Posts > October Monthly Dollar Value of Real Estate Activity Continues Overall Positive Trajectory
November 12
October Monthly Dollar Value of Real Estate Activity Continues Overall Positive Trajectory

letterhead.png

 

Thursday, November 12, 2020
For Immediate Release

Contact: Luther Snyder, Deputy Director
O. 919-856-5462 M. 919-369-7045
luther.snyder@wakegov.com

October Monthly Dollar Value of Real Estate Activity Continues Overall Positive Trajectory

The increase was driven by solid core market activity.

Raleigh, NC -- In October 2020 almost $1.6 billion in real estate changed hands again in Wake County. This was the second-highest value month of 2020 and the third highest month over the last four years.

October dollar value of transactions

During October $1.59 billion worth of real estate traded hands. This was down from the $1.62 billion high in September 2020 and up from $1.37 billion in September 2019.

October saw a decrease in very high-value transaction segment over September’s spike. This segment is defined as transactions worth $30 million and up. Only three transactions totaling $248 million were made. In September 2020 there was $429 million worth of very high-value transactions. In contrast, from April through August, there had been a total of only $344 million in such transactions.

In September 2020 there were $429 million worth of very high value transactions. In contrast, over the previous five months (April through August) there had been a total of only $344 million in such transactions.

The largest transaction was for $110 million on October 30, 2020.

During October 2020 core market transactions were $1.06 billion, up $70 million from September’s core market transactions of $987 million, but up $201 million from October 2019 which was at $856 million. The core market is defined as property valued at $1 million or less and it comprised about 97% of September’s transactions.

The following chart shows the dollar value of real estate transfers by month broken down into three price ranges.

Property Transfers by Price Range 2014 to 2019.png

Click here for a larger image.

A breakdown of the dollar value of transactions by price range for the years 2014 – 2019 is available at http://www.wakegov.com/news/Lists/Posts/Post.aspx?ID=1140.

Median sales prices

In October 2020 the median sales price of a parcel of Wake County real estate sale was $329,000, down $500 from September 2020.

Wake_County_Deeds_and_Deeds_Of_Trust_Recorded.png

Click here for a larger image.

Changes in median sales prices tend to be caused by activity in the core market. The occurrence or non-occurrence of large transactions has virtually no impact on the calculation of median values because there are so few of those transactions.

Lending activity continues to be fueled by refinancing

Real estate lending activity in October was the strongest in more than four years. The number of loans secured by real estate in October 2020 was up 4% compared to last month and up 36% compared to October 2019.

Real estate lending activity has two primary components.

  1. The first is lending that coincides with a transfer of ownership of real estate. This is seen in the typical residential home sale where simultaneously a seller’s loan is paid off and a buyer takes out a new loan as ownership is transferred by deed.
  2. The second is where a new loan secured by real estate is taken out, but there is not a change in ownership of the underlying property. This is the situation in the typical mortgage refinancing or second mortgage transaction.

The relative strength of the second type of lending activity can be quantified by comparing the ratio of deeds of trust to deeds in a period. Relatively more deeds of trust signify increasing refinance of mortgage loans.

Since the autumn of 2019, there has been a significant increase in the second type of lending activity. The following chart shows the continuing wide gap between deeds of trust and deeds. This gap, compared to a baseline period from 2017 through mid-2019, quantifies increasing strength in the mortgage refinance market.

Wake_County_Deeds_and_Deeds_Of_Trust_Recorded.png

Click here for a larger image.

 

Long-Term Trends in Real Estate Activity

Aggregate value of real estate transactions

The following chart shows the aggregate dollar value of real estate transactions in Wake County for each month from 2017 through 2019 as well as year to date 2020. Because real estate transactions tend to be seasonal, it is useful to compare monthly results to the corresponding month of prior years.

Wake_County_Deeds_and_Deeds_Of_Trust_Recorded.png

Click here for a larger image.

 

Aggregate value of real estate transactions - linear

The following chart shows the aggregate dollar value of real estate transfers in Wake County linearly (month by month) from January 2017 through year to date 2020. Because real estate transactions tend to be seasonal, this information should be evaluated in conjunction with the year over year comparison is shown in the preceding chart.

Wake_County_Deeds_and_Deeds_Of_Trust_Recorded.png

Click here for a larger image.

 

Deed volume

The following chart shows the number of deeds recorded in Wake County for each month from 2017 through 2019 as well as year to date 2020. Numbers of deeds recorded reflect the velocity of real estate activity without regard to the dollar value of a transaction. The number of deeds includes transfers where monetary consideration did not change hands, such as transfers within a family.

Wake_County_Deeds_Recorded_by_Year_and_Month.png

Click here for a larger image.

 

Real estate lending

This chart shows the number of deeds of trust recorded in Wake County for each month from 2017 through 2019 as well as year to date 2020. A deed of trust is the legal instrument used in North Carolina to secure a loan with real estate used as collateral. Numbers of deeds of trust recorded reflect the velocity of lending transactions involving real estate without regard to the dollar amount of the loan.

Wake_County_Deeds_Of_Trust_Recorded.png

Click here for a larger image.

 

Methodology and Additional Information

The statistics in this report are derived from instruments recorded in the office of the Wake County Register of Deeds. Under North Carolina law, changes in property rights in real estate, including security interests in real estate, are recorded with the Register of Deeds of the county where the real estate is located.

The value of real estate transferred is measured by excise tax assessed on the consideration in a real estate transaction. Excise taxes are calculated as $1 in tax for every five hundred dollars of consideration. About 99% of these transactions were property transfers by deed and the balance were miscellaneous transactions such as acquisitions of a right of way. The calculation of the aggregate value of real estate includes all transactions. The calculation of median price includes all transactions where the property was transferred by deed.

The core market is defined as property transactions valued at $1 million and less. In October 2020, 97% of transactions were in the core market.

The number of deeds and deeds of trust recorded with the Register of Deeds reflects the total volume of property and loan transactions regardless of the dollar value of the real estate or amount of the loan. The number of deeds includes transfers where monetary consideration did not change hands, such as transfers within a family. In October 2020, 22% of deeds attracted no excise tax. That percentage was 21% in the first quarter, 22% in the second quarter, and 21% for the full third quarter of 2020.

On March 14, 2020, public schools were closed and mass gatherings were prohibited by executive order of the governor. On March 17 and 23, 2020 additional executive orders were issued which closed certain businesses and introduced additional restrictions. Based on these events, a starting date of March 17 is used to demark the advent of COVID-19 related legal restrictions on economic activity.

For a complete picture of Wake County real estate activity, the information in this report should be considered in conjunction with data available from other sources, such as rezoning applications and new building permits, plus other information published by the Register of Deeds available at http://www.wakegov.com/news/Lists/Categories/Category.aspx?CategoryId=17&Name=Register%20of%20Deeds .

This report was initially released on November 12, 2020.

 

- 30 - 
 

FacebookTwitterInstagramYouTube 









Wake County Departments & Agencies:
Department-list-1.png