Frank DeRonja, President, Raleigh Regional Association of REALTORS

In an interview with Invest:, Frank DeRonja, president of Raleigh Regional Association of REALTORS, discussed market normalization, affordability, inventory challenges, and the association’s role in supporting its members. “It is all about how we can get enough inventory, because even with the market normalizing, there are still not enough homes out there,” DeRonja said.

What changes over the past year have impacted the association, and in what ways?

We have seen a lot of challenges in our industry, including regulatory challenges and changes at the association and national levels. There has been a lot of national news about how properties are marketed and how it has trickled down. It has happened quickly.

Typically, the residential real estate industry does not change that quickly. The regulatory changes over the past year or two have required us to be nimble. That has involved a lot of education for our members and brokers on what we can and cannot do anymore and the rules we have to follow.

We have also had to deal with rapid changes in interest rates, particularly since January. Getting momentum in the market has been more start-and-stop than we expected, especially after last year was static.

How is the association helping members navigate this rapidly changing environment?

Part of the rules we have to follow has involved a lot of focus at the federal level around antitrust and how real estate agencies and agents get compensated.

As an association, our job is to support our members and help make sure they are following the rules correctly. That happens through formal classes, workshops, publications, and information we share with firms so they can communicate it to their agents.

It is really tied to efficient communication through all channels.

What developments have had the greatest impact on the housing market, and how are REALTORS adapting to those trends?

Our market has normalized. During the COVID years, there was not enough inventory. There were not enough homes available to purchase, and that drove pricing upward rapidly.

The Triangle has always been a steady market in terms of appreciation, and that has been attractive. Our housing prices have generally been considered a great value compared with competitors such as Nashville, Northern Virginia, or Austin.

During COVID, we saw significant price appreciation, not enough homes, and low-interest-rate loans. It became competitive. Over the past two years, we have seen a normalization of the market.

We still see multiple offers in some scenarios, but for the most part, it is a more balanced and normal market. That has been a benefit, particularly for buyers. It is a healthy change.

What does Raleigh’s continued growth mean for the future of the region’s housing market?

It is all about how we can get enough inventory, because even with the market normalizing, there are still not enough homes out there.

The biggest challenge is matching affordability with the jobs that are coming in. We have a lot of high-income workers in the Triangle because of our economy, including biotech, technology, and gaming. Those are high-salary industries.

We also need affordability for the people who support the economy and are closer to median income. The challenge is getting inventory that matches affordability for our citizens. How do we build enough of the right properties?

How would you characterize the current balance between supply and demand across the broader region?

It varies by segment. Inventory has climbed in the segments where buyers are more interest-rate sensitive.

In Wake County, the average price point is about $425,000. For homes at that average price and below, we have seen inventory climb because those purchasers are more sensitive to rising interest rates. We have also seen inventory creep up among attached products, such as townhomes and condos.

For single-family step-up properties, there is still not enough inventory, particularly between $500,000 and $1 million. The luxury market keeps ticking along.

The challenge is getting the right balance of properties. You cannot build a house in a month. Things have changed so much, and getting the market to balance out in the right locations, where people want to be and where infrastructure is in place, takes time. Those are the challenges we are looking at now and over the next few years.

How does infrastructure factor into the region’s housing needs?

Infrastructure is a challenge in every region. Roads and public transportation matter. The shift to working from home and then coming back to the office has also been dynamic over the past few years.

A little normality is a good thing. That is why it has actually been a benefit for things to slow down just a little.

What solutions are most important to expanding homeownership opportunities in the area?

It has to be a balance. There has to be a public component and a local government component, whether that involves a bond or another tool for affordable housing.

There is also a regulatory component. How expensive is it to build a home? We recently saw how much it costs for a house to tap into public sewer and public water. In some municipalities, it costs $10,000 just to tap in. In other municipalities farther out from the Triangle, it can be $100.

That all adds up. On a $300,000 or $400,000 home, a $10,000 tap fee is a large percentage. On a $2 million home, $10,000 is a drop in the bucket.

There also needs to be reasonable profit margins for builders to come in and build the right properties that fit the market. It is a multipronged approach, and nobody has solved it.

You have to be doing it all. This is really impacting teachers, police officers, healthcare workers, and the workforce housing component. It is difficult right now in the Triangle for the people who keep us safe, teach our kids, and take care of us to afford to buy or rent in the same counties where they work.

What opportunities are you most excited about in the real estate market?

This is what makes this industry so fun to participate in. I am 25 years in, and the same things that have made it exciting the whole time are still there.

There is something amazing about helping a young professional or someone buying their first home. A home means a lot to different people. It is a place that is safe. Nobody can raise the rent on you. You can paint the walls purple if you want.

There is something about a home that makes it different. Helping people attain that first home, whether they are in their 20s or 30s, is meaningful. We have seen the age of first-time homebuyers rise over the past decade, with many approaching 40 years old. How can we bring that back down again?

How can we restore that excitement and that ability to build generational wealth? For most people, their home is the largest source of wealth they can use to retire and pass along to the next generation. That is important.

Waking up every morning in this industry, there is something different about the emotional component of helping somebody buy their first home or even downsize.

What are your key goals and priorities as president of the association?

Our priority is member engagement. We want members to be involved with the association.

That connects back to education and making sure members are up to speed on what is happening. It also includes the networking component of interacting with people.

After all these years of Zoom, and we are doing this on Zoom right now, it is important to have people in person. We have made great progress at our association. We have about 10,000 members, and we have had over 2,500 visits to our building already this year, which is amazing for six months in.

Getting people back face-to-face matters. I am a face-to-face person. My kids are in their 20s, and they are face-to-face people, too. The challenge is getting the people between their 20s and 50s back into the building.

Member engagement is the number one thing we are focused on and the number one priority for me as president of this association.