March (Market) Madness

March Madness is upon us. For avid college basketball fans that means hours of competitive

basketball on TV for the next couple of weeks! As a Realtor, March Madness has a different

meaning. Spring is when most people think is the best time to buy and sell real estate, making

our market like the weather in the fact that it is warming up. Historically, the data proves this to

be true since we have Marines moving for PCS season, families moving while kids are out of

school as well as the highest levels of inventory in the local market we will see all year. I

believe Craven County is poised to have another phenomenal year in the real estate market,

though all the data points may seem more positive for both buyers and sellers, depending upon

your perspective.

Here in Craven County, we are seeing inventory levels rise as we currently have 374 residential

properties for sale. To give you perspective, during the pandemic we saw inventory levels in

Craven County get as low as approximately 130 homes on the total market. Ten years ago, we

were averaging between 1300 - 1400 homes on the market in Craven County. As a buyer,

having more homes to choose from gives people options on the property they are buying. From

a seller’s perspective, the more homes that are on the market, the more competition they have

in getting their home sold. Market absorption rates, which are a calculation of the number of

months of supply we have of homes, have more than doubled in the last 12 months. We now

have over a 3-month supply of homes meaning at the pace we are selling homes that it would

take 3 months to sell every home currently available if no new listings came to the market. For

buyers, this is a positive sign as they have more homes to choose from and possibly a bit more

time to decide. For sellers, a 3-month supply of homes is still considered a seller’s market,

though we do see the market is balancing itself out. A market absorption rate from 5-7 months

is a normal market while anything above that would be a buyer’s market since the inventory

would outweigh the demand for homes. We are a long way from seeing absorption rates that

show the market to be in favor of the buyers. Both buyers and sellers are experiencing that

homes are sitting on the market longer. The average number of days on the market so far this

year is 53 days, which is up 20% from last year. The median number of days on the market has

almost doubled this year to thirty-one, which sounds like a lot compared to the last few years.

However, that also means that 50% of the homes that are selling are selling in less than a

month. With days on the market up, buyers have a bit more time to make a decision on a

home, though we are still seeing homes sell in a few hours and a few days if the home is priced

properly for the condition and location. Sellers experiencing longer days on the market require

more patience and a willingness to make changes in price, staging, or condition of the home if

necessary.

Like March Madness, in the real estate market, there are winners and losers. Currently, we have

306 homes under contract with 174 of those homes being resales and 132 being new

construction. Therefore, we have almost as many homes under contract as we do for sale

here in Craven County. The number of homes that have gone under contract is up 12%

compared to this time last year. In part, buyers and sellers have gotten accustomed to

mortgage interest rates normalizing. Interest rates are in line with the 40-year average, and it is

highly unlikely that we will see the 2-3% rates that we were experiencing a couple of years ago.

With prices continuing to rise, people have realized that they better buy now with the hope that

interest rates go down. The Federal Reserve had come out at the end of 2023 indicating that

they are hoping to lower interest rates this year. As inflation continues to rise, the likelihood of

any major rate drop becomes slimmer. The saving grace that may allow rates to come down a

little is that we are in an election year. I am aware the Federal Reserve is not the Federal

Government. However, no politician who is concerned about protecting their job wants interest

rates to be too high come early November when voters go to the poll to decide the direction of

our country, economy, and policies. Therefore, I do believe that interest rates will tick down a

small amount between now and the fall. If interest rates do go down, this would likely cause

prices to rise as more buyers get back in the market as house payments become more

affordable. With more buyers putting a strain on the low inventory levels, supply and demand

would once again get out of whack and that would cause a spike in prices. So far this year we

have seen the average price up almost 10% from this time last year while the median sales price is

up just over 2% this year. If rates do not go down, it is my prediction that prices will end the

year up a little but nowhere near the 10% we have seen thus far this year and last year.

Predicting the economy is almost as accurate as our March Madness brackets will be when we

predict who will win the national championship. Both predictions are based off the facts of what

has happened in the past and personal feelings. Both predictions are also never perfect as one

can never predict something with many variables as both the real estate market and March

Madness have.

So far in 2024, we have seen about 10% less closings overall compared to this point last year.

With the number of homes going under contract being up 12%, we do expect that number to

balance out as we get into and through the spring market. Of those 293 homes sold this year,

only fifty-eight have been new construction. This is surprising as the data presents a different

picture when we consider the number of new construction homes for sale (178) and the number

of new construction homes under contract (132) in Craven County. For homeowners, buyers

are looking to buy and are now looking to negotiate. During the pandemic, most negotiations

were buyers offering the seller more for their home. Now we are seeing on average sellers

negotiating 4-5% off the price to get their home sold. If you consider that average includes new

construction that rarely negotiates down, negotiations are happening again. We are still seeing

a few homes come on the market and sell quickly for asking price or have competing offers

pushing the price up. Most homes do not see that kind of activity now, which is the reason for

negotiations. Days on the market are an enemy of the seller now. Buyers and sellers found it

normal during the pandemic for multiple offers and homes selling in a couple of days. Now

sellers must be more cognizant of their pricing and try to get their home sold quickly. The longer

a home sits on the market, even after price reductions, the lower a buyer’s initial offer likely will

be. Pricing a home properly for the condition, location, and staging of the property will cause it

to sell. Sellers must be ready to take that game-winning shot as they put their house on the

market to get it sold.

I am a believer that the first weekend of the NCAA Tournament should be a national holiday.

The determination and drive the college athletes have to win is the same way both buyers and

sellers should attack the market. For sellers, putting in the work, or hiring someone to do the

work, to ensure the house is in the condition it needs to be in and staged the way it should be is

like the practice and the games that are before the tournament. For buyers, being reasonable in

their offerings and ensuring they are qualified to purchase is the same as preparing for the big

games. These steps are necessary if you want to get to the closing table and raise the trophy of

getting a home purchased or sold. Then you can be like the champion holding your keys or

check up while One Shining Moment plays and reminds you of the triumphs and heartbreaks

through the process!