Sun Journal May Real Estate Column: Demand still high for homes in our area
Real Estate column by Rowland and The Home Sales Team.
Dr. Dean Martin, my Philosophy professor at Campbell University, taught me, “if you are not growing, you’re dying.”
Our local communities are growing causing the real estate market in Craven County to continue to thrive. With 202 residential properties for sale in Craven County and demand still high for homes in our area, the current market still holds true to being an excellent time to buy and sale.
Supply and demand are the basics of economics. Currently there are about 20% more homes under contract than we have for sale, a clear sign that our housing supply is much lower than our demand. In understanding supply and demand, it is noted that when demand is higher than supply, prices typically rise. Buying a home now, while inventory is still low, should give buyers comfort that real estate prices will continue to appreciate. The growth that Craven County is experiencing will continue to bring more demand for homes.
With 46% of the current homes for sale being new construction which are months from being ready to live in, sellers still have a prime opportunity to get their home sold in a reasonable amount of time for a premium compared to what they most likely bought it for. Demand is so high that 50% of the homes that are selling are doing so in twelve days or less. To give perspective, twelve median days on the market is 140% higher than it was at this time last year, which sounds terrible…and it is much lower than the 168 median days on the market of ten years ago.
We can’t drive many places around Craven County and not see signs of growth. Road construction, commercial buildings, as well as new neighborhoods popping up everywhere. This continues to bring people from all over and allows more opportunities for locals as well. One question I always ask people moving to our area is how they discovered our part of the world. Most common answer is people have friends that moved here and when they came to visit, they fell in love with the charm.
The big news story over the last year has been interest rates and how they have risen.
Interest rates have normalized to where they have averaged over the past 40 years and are no longer artificially low. The great thing about any fixed interest rate 30-year mortgage, is people get to control their budget and have a forced savings plan. Renters have no control over when their landlord raises rent or decides to sell the property. As housing shortages continue across our county and our country, rents will continue to go up. Locking in a 30-year mortgage will increase stability in your budget and builds you equity in an appreciating asset. Due to higher interest rates, lenders are getting more creative with ways to do loans. People looking to buy have opportunities to get assistance with their down payments, waivers of appraisals if they are making a large down payment and other methods to help buyers of all demographics.
Growth is happening in real estate prices as the average price has gone up just over 11% this past year. With our area being great value, people are coming to buy here from more expensive areas which will continue causing prices to rise. For a seller, this is a great opportunity to demand a premium for your property.
If you read my article last month, you know real estate for sale is always competing in a beauty war and price contest. Sellers can’t just believe anything will sell as buyers have become more selective with the market being slower than the feeding frenzy that happened a couple of years ago. Seller’s can maximize their profits typically with a few touch ups and little money out of pocket. As new owners move into properties, they typically update the home as well, continuing to increase the value. We have seen this happen throughout our area in neighborhoods that at one time were becoming tired. Now, we are seeing new owners in communities all over Craven County update homes adding to the appeal of many different areas.
There have been 550 homes sold this year in Craven County, which is 28% less homes than last year. However, we have seen almost 22% less homes for sale this year as well.
If you consider that more of the homes for sale are the new construction, it is no surprise the number of sales is down. We realtors have nothing to sell and are looking to help people find their next home. In good and bad markets, opportunities to buy, sell and invest and real estate are always around. I believe in our local real estate market as a great long-term investment. If you know someone looking to sale a home, buyers are out there. If someone is looking to buy a home, sellers are out there. Someone can start investing in real estate by buying your first home to live in and grow from there. Long-term investments typically take time to grow. Real estate is no different in the time it takes for great appreciation.
Now is a great time for buyers. As we continue to grow, our community will thrive which is much preferred over the real estate market falling apart and our area dying out. If we are not growing, we are dying. Let’s continue to grow!