October Market Update

I am so grateful to the Sun Journal for allowing me this platform to educate and provide perspective on our local real estate market in Craven County.  I know there is a lot of noise and news being published about what is going on in the real estate market. However, real estate is hyper-local, and we must look at our real estate market here in Craven County in such a hyper-local way.  Obviously, we don’t live in a bubble here in Craven County. Therefore, what is happening around the United States and with the Fed’s monetary policies does have impact our market.  Just take note that when you hear real estate reporting on the 24-hour news/entertainment platforms, they are typically pulling their data from major metropolitan areas.  New Bern has grown a lot in my 20 years of real estate, though we are still a long way from being a major metropolitan area!

The Fed and their monetary policy of increasing interest rates has performed the intended function of slowing down inflation.  We all would love to be able to buy homes with 3% mortgage rates that were available 2 years ago.  The low interest rates had home prices increasing 20-25% per year, which is not sustainable or healthy for the economy.  The Fed started in April of 2022 raising the cost to borrow money and now mortgage rates hover around 7%, depending upon the kind of lending a buyer obtains.  The higher the mortgage rate, the more expensive a monthly payment, which can affect how much some buyers can afford.   In Craven County, 24% of all residential property closings this year have been by buyers paying cash for the property and not getting a mortgage. Buyers paying cash are not concerned with what mortgage rates currently are as they have no impact on their monthly cost.  A lot of buyers are moving from higher priced areas and using the equity in their home to pay cash for homes here.  

The mortgage rate increase has had an impact on our local market as we are not seeing the 20-25% increase in average prices.  Year to date, we have seen the average price increase 10.33% in Craven County up to $311,778.  If we look at September of 2022 compared to September of this year, we see the difference in the average price only being 4.77% over last year.  In some specific markets of our area, you will even see where the average price has come down, though the median price is up.   The positive is we are still seeing upward pressure on prices due to the lack of inventory with only 144 resale properties on the market and 172 new construction homes for sale. We are also continuing to see builders building homes and businesses coming to Craven County.   As rates have increased and slowed the market down in bigger metropolitan areas, the growth around Craven County should buoy our market to keep it stronger than most markets.  However, as interest rates remain the same for the foreseeable future, pricing of homes becomes more critical if a seller wants to attract a buyer.  The higher rates affect the affordability of homes for buyers which is why we are seeing the price increases slowing down and more price reductions on the local MLS.  We have seen the average days on the market increase to 39 days, which sounds like a lot since we were seeing average days of less than a week just two years ago.  To put that in perspective, we also saw average days on the market over 200 days 10-12 years ago.  We did see half the homes in Craven County sell in less than 19 days for the month of September, therefore buyers are still buying homes.  

To say the real estate market is bad would be wrong in my opinion as overall our market is still good, though we have seen it slow down.  In Craven County we have seen 28.9% less sales this year than we did last year, which equals 521 less residential properties sold.   We’ve also seen 335 less homes on the market this year as more people are opting to stay in their home as they have a great mortgage rate.  The lack of inventory is one of the major factors in keeping prices steadily rising.  Year to date, we have an absorption rate of 1.6-month supply of homes in Craven County.  This means that at the pace homes are selling in Craven County, every home would sell in 1.6 months if no other homes hit the market.  The absorption rate does not consider price points and only looks at the raw number of actively for sale homes and properties selling.   An absorption rate below 5 months is considered a seller’s market.  Since the market is softening because it couldn’t keep the pace that it was at from 2020 to early 2022, buyers are seeing more opportunities to negotiate prices and repairs.  Sellers are having to make sure their homes are priced properly and in good condition, which is why this market is still a good opportunity for both buyers and sellers.   As real estate agents, we will see more brokers getting out of the business with less transactions to divide between us.

The Craven County real estate market has a lot of positive things going for it.  The growth that is happening will continue to make prices rise as demand outweighs supply.  If you are waiting for prices or mortgage rates to come down, that likely will not happen anytime soon.  By the time mortgage rates decrease significantly, prices will be a bit higher, therefore saving a buyer little to no money.  The best time to buy real estate was 5 years ago.  The next best time is today.