Housing market is at a turning point
June 23, 2022 | Stephanie Buss
The Housing Market is at a Turning Point
It is no secret that the market is shifting, and many headlines would have you believe the market is heading for a crash or correction.
According to the latest statistics from the National Board of Realtors, the housing market is moderating compared to the last two years, but what everyone needs to remember is that the past two years were record-breaking, due to the pandemic.
“Record-low mortgage rates and millennials reaching peak homebuying years led to an influx of buyer demand,” according to Keeping Current Matters. “At the same time, there weren’t enough homes available to purchase thanks to many years of underbuilding and sellers who held off on listing their homes due to the health crisis.”
This led to record-high demand and record-low supply, which was not going to be sustainable in the long term.
The latest data is showing early signs of a shift back to the market pace seen in the years leading up to the pandemic – NOT a crash nor a correction.
Headlines are talking about how existing home sales are declining, but perspective matters. Here’s a look at existing home sales going back to 2019 using data from the National Association of Realtors (NAR).
The pandemic numbers (shown in blue) beat the more typical year of 2019 home sales (shown in gray). And according to the latest projections for 2022 (shown in green), the market is on pace to close this year with more home sales than 2019 as well.
It’s important to compare today not to the abnormal pandemic years, but to the most recent normal year to show the current housing market is still strong. First American sums it up like this:
“. . . today’s housing market looks a lot like the 2019 housing market, which was the strongest housing market in a decade at the time.”
The median sales price in Transylvania County is 407k, over 400k for the first time ever, which is a 14.8 percent increase. Sales are down and are likely to continue to go down, and price appreciation is expected to continue without a significant increase in supply. Low inventory is still the driving factor in home sales.
“Low inventory levels and continued demand still make this a seller’s market,” says Billy Harris. “Homes and land are still selling in less than 30 days if correctly priced.”
Billy Harris added that he is seeing a lot of cash buyers.
“Forty percent of our residential sales and 90 percent of our land sales in Transylvania County are still closing with cash buyers year-to-date,” he said.
“We feel appreciation will slow but still expect to see appreciation outpace mortgage rates this year.”
Today's Real Estate Market
The current market is not a crash or correction. It is a turning point toward more typical, pre-pandemic levels.
If you have questions or concerns about the local market in the Western North Carolina and Brevard area, please contact us. We would be happy to discuss opportunities with you and answer any of your questions and concerns about today’s real estate market.
Source: Keeping Current Matters