Market Momentum

How to Use This Report

Momentum scores tell you where the market is moving, not where it is today. Here are some practical ways to use this data:

• Buyers looking for value: Filter for neighborhoods labeled Heating Up with a Value-Priced or Market-Aligned Price Index. These are areas where prices are still accessible but demand is accelerating — buying here means getting in before the market fully reprices.
• Sellers timing the market: If your neighborhood scores above 70, demand is strong and prices are rising. This is a favorable time to list. If it's Cooling Down, consider whether waiting or pricing aggressively is the better strategy.
• Investors seeking appreciation: Look for neighborhoods with high momentum scores and moderate turnover. High appreciation combined with healthy transaction volume suggests sustainable growth, not a speculative spike.
• Comparing neighborhoods: Use the county tabs to compare neighborhoods within the same market. A score of 75 in Wake County means strong momentum relative to other Wake neighborhoods — use it alongside the Price Index to get the full picture.

Momentum vs. Price Index — What's the Difference?

These two reports answer fundamentally different questions:

A neighborhood can be Premium-Priced and Cooling Down (expensive but plateauing) or Value-Priced and Heating Up (affordable but rising fast). The most actionable insights come from using both reports together.

How This Report Is Built

This report does not fetch raw sales data on its own. Instead, it cross-references three existing data pipelines that already run weekly — the Price Index, the Turnover Report, and the Building Permit Reports — and scores each neighborhood on a composite of four factors.

The four scoring factors:

• Price Appreciation (40% of score) — Year-over-year change in median price per square foot ($/sqft), from the Price Index. We use $/sqft rather than raw median price because it controls for product mix shift — a neighborhood where larger, more expensive homes sell one year and smaller homes the next can show wild swings in raw median price without any actual market change. $/sqft strips out size effects and measures genuine price appreciation. This is the single strongest momentum signal.
• Sales Volume (25%) — Number of closed sales ranked against other neighborhoods in the same county. A neighborhood with 80 sales in Wake is compared to other Wake neighborhoods, not to a small Orange County community. More sales relative to county peers = stronger demand signal.
• Emerging Market Position (20%) — An interaction term that rewards value-priced neighborhoods appreciating fast. A neighborhood priced below the county median that posts strong $/sqft YoY gains scores higher here than an already-premium neighborhood with the same appreciation. This surfaces emerging markets before they become obvious.
• Turnover Signal (15%) — From the Turnover Report. This uses an inverted-U curve: moderate turnover (around the 60th–75th percentile) scores highest because it signals healthy, active demand. Very low turnover (stagnant) and very high turnover (instability or new construction) both score lower.

If turnover data is missing for a neighborhood (e.g. it wasn't large enough to qualify for the Turnover Report), the 15% turnover weight is redistributed proportionally across the other three factors (appreciation → 47%, volume → 29%, position → 24%). The neighborhood is still scored and ranked.

How scores become labels:

• Heating Up — Composite score ≥ 70. These neighborhoods are in the top tier for appreciation, demand, and market positioning.
• Steady — Score between 35 and 69. Stable markets — not surging, not declining.
• Cooling Down — Score below 35. Prices are flat or declining, sales volume is low relative to peers, or premium pricing is meeting resistance.

Why $/sqft instead of raw median price? Raw median sale price is sensitive to product mix shift — if a neighborhood's recent sales skew toward larger homes, the median goes up even if the market is flat. Price per square foot normalizes for size, isolating genuine appreciation from compositional noise. A neighborhood where $/sqft is rising 6% is genuinely appreciating; one where raw median rose 25% but $/sqft barely moved had a different mix of homes sell, not a real price increase.

Builder Confidence badge: Building permit counts from Wake and Durham County are displayed alongside qualifying neighborhoods as a supplementary signal. Permits are not factored into the composite score because only two of the four counties have permit data — including them would unfairly penalize Orange and Chatham neighborhoods.

Which Neighborhoods Are Included (and Excluded)

Not every Triangle neighborhood appears in this report. A neighborhood must pass three filters to be scored:

1. Must exist in the Price Index. The Price Index is the foundation — it provides the hedonic pricing model, YoY appreciation, and price tier labels. Neighborhoods not covered by the Price Index (very small or unnamed subdivisions) cannot be scored.
2. Must have year-over-year $/sqft appreciation data. Momentum is fundamentally about change over time. If a neighborhood doesn't have enough historical sales to compute a reliable $/sqft YoY comparison, it's excluded. This is the largest filter — many smaller neighborhoods lack prior-year data.
3. Must have at least 10 closed sales in the trailing 12 months. With fewer than 10 sales, a single outlier transaction (a foreclosure, a teardown, a family sale) can swing the median price dramatically, making the YoY comparison unreliable.

Neighborhoods that don't meet these thresholds aren't necessarily unimportant — they just don't have enough recent data to score reliably. As sales accumulate over time, more neighborhoods will qualify.

Why some well-known neighborhoods may be missing:

• Very exclusive communities with large lots and few sales per year (e.g. 5–8 sales) are excluded because their YoY swings are too volatile to score meaningfully.
• New construction communities are excluded when detected — builder communities show phased pricing that inflates even $/sqft appreciation, reflecting product rollouts rather than genuine market shifts. Neighborhoods with sufficient resale activity alongside new construction may still qualify.
• Recently renamed or reorganized subdivisions may temporarily drop out if the name mapping hasn't caught up with the canonical neighborhood database.