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Real Estate Recap February 2023
Looking at the final numbers for Haywood County in February, it’s a real mixed bag of statistics. Compared to 2022 new home listings were down from 77 last year to 66 this February. We really need more homes to come on the market, as we have more buyers than sellers currently.
Closed home sales this year in February dropped from 77 last year to 56 this year, a 27.3% decrease. However, pending home sales rose 15.2% from last February. (76 this year versus 66 last year)
The median sales price rose from $329,000 last year to $356,900 this year, an 8.5% increase. (Median sales price means the middle price: the same number of homes sold for less than median and the same number of homes sold for more than median.)
The average sales price actually rose 23.8% in February compared to February 2022. $354,100 last year and $438,521 this February. This anomaly is mainly caused by a lack of homes in the lower price ranges. We sold more homes in the higher price ranges, because there are more homes available in the higher price ranges. The lower price ranges have extremely tight inventories.
Average days on the market increased from 32 days last year (when buyers were offering quick cash closings) to 75 days this year, which reflects a more normal market.
Our month’s supply of inventory has increase from 1.2 months last year in February to 1.8 months this February. A balanced real estate market, one where there are an equal number of buyers and sellers is considered a 5 to 6 month’s supply. Obviously, we are still in a seller’s market here in Haywood County.
As you can see from the above statistics, the current real estate market is complex. We are here to help simplify the details and make your next real estate transaction painless. Y’all come see us!
Musings from the Mountains
Today I want to mention a few happenings in real estate today, and a bit of my opinion about short-term rentals in our area.
Typically, home buyers with FHA mortgages pay lower down payments than home buyers with conventional mortgages. This results in their having to purchase Mortgage Insurance until they achieve an agreed upon amount of equity. The Department of Housing and Urban Development recently moved to lower Mortgage Insurance Premiums beginning in March. This reduction in premiums would save the average home buyer $800.00 in their first year of home ownership. With interest rates in the 6% range currently, this would be welcome savings for many home buyers.
We all know that home prices have climbed considerably in the last few years. According to the National Association of Realtors® Chief Economist, Lawrence Yun, home prices nationally have risen 42% in the last 3 years. However, it seems that locally, home prices have stabilized, at least for the time being.
The good, bad, and ugly of short-term vacation rentals: Since the Covid outbreak of 2020, more vacationers have come to prefer renting a vacation property as to staying in a hotel or motel. Originally this was probably driven by vacationers wanting to avoid crowds and come in contact with as few people as possible. Also, others working remotely during the pandemic wanted a place to stay away from crowds. So ultimately, many investors recognized this trend and purchased vacation properties here in our beautiful mountains. A good portion of our homes available for sale were sold and converted from single family residences to short-term vacation rentals. This has contributed to a shortage of homes for sale in our area for both full-time residents and second-home purchasers. Real estate prices are driven by supply and demand. If you lower the supply, and still have demand, prices ultimately rise. Do we have too many short-term rentals now? The jury is still out on that one.
Do you have any real estate questions? If so, please let us know. We are happy to help.
Real Estate Recap and Pickleball
I want to recap the home sales results from January and then a few words about pickleball in our area.
The number of closed sales for January decreased 40% from January 2022. However, pending sales (not yet closed) increased by almost 10%. (101 this year, 92 last year) Our inventory of homes for sale has increased 27% from January 2022. Our month’s supply of inventory is now 2.0 months compared to 1.3 months last year in January. This is a good trend, however. we are still in a seller’s market and need more homes to come on the market. Inventory is particularly scarce in the $200,000 to $400,000 price range. We still have many buyers in this price range that cannot find a home that works for them.
Hopefully, more homes will come on the market in the spring and help rebalance our market by summer. We do have several new housing developments in the works.
Pickleball is probably the fastest growing sport in America. We are fortunate here to have the Waynesville Rec Center. They have swimming, exercise equipment, a walking track, racquetball, basketball, volleyball, and pickleball courts. The Rec Center also has 3 pickleball courts in the old Armory on Boundary Street. For those of us who are retired and have a Medicare Supplement or Medicare Advantage, the rec center works with Silver Sneakers and AARP United Healthcare to provide gym memberships at no charge with those insurance plans. In addition to the rec center, there are outdoor courts at Lake Junaluska, courtesy of the Junaluska Assembly. Bear Waters Brewing is reportedly opening a new brewery location on South Main Street in Waynesville close to Walmart with some indoor pickleball courts.
Bottom line, we have an active and welcoming pickleball community here in our area. If you are retired and moving here from Florida, Texas, or any other state and play Pickleball at home, just bring your paddle and come on up.
Musings from the Mountains
Musings from the Mountains will be thoughts and happenings from the Maggie Valley and Waynesville area with little bit of everything else thrown in.
In Maggie Valley we are starting a road improvement project along Soco Road (Highway 19) this Spring. The project aim is to make Soco Road (2.5 miles of it) more walkable and safer for pedestrians. There will be a series of islands constructed in the existing turn lane. (Soco Road is a 5-lane road with a turn lane in the middle.) The crosswalks with be constructed with a stamped brick appearance. The existing islands will be revamped with new landscaping. In addition to the island crosswalks, 5 current painted crosswalks will get the faux-brick treatment and crossing signals. This road improvement project has been on the back burner for some time with much discussion from locals.
In Waynesville, the apartment complex off Russ Avenue, where the old Bi-Lo Shopping Center once stood, is getting closer to being completed. This complex was originally advertised to contain 210 units. The area certainly needs this as rentals seem to be in short supply. It’s difficult to miss these apartments, as they have certainly changed the look of Russ Avenue. We old-timers probably remember Ready-Mix Concrete Company that was there prior to the Bi-Lo Shopping Center.
On a more local note, after years of seldom seeing any deer at our home on Utah Mountain, it seems we have our own herd of deer now. We have 6 or more deer in our yard about every other day. I didn’t know deer ate rhododendrons, but apparently, they do. Some of our rhododendrons look pathetic with most of the leaves gone.
While I’m on the subject of rhododendrons, did you know that most of the old-timers here in the mountains called them Mountain Laurel. The plants we now call Mountain Laurel, the old-timers called Mountain Ivy. This apparently goes way back as Horace Kephart wrote about this in his book Our Southern Highlanders, published in 1913.
If you haven’t been to the mountains in a while, come up and see us!
2022 Real Estate Recap
As we now have sales figures for December 2022, I thought I would discuss the numbers for the whole year of 2022.
Comparing 2022 to 2021, the total number of homes sold in 2022 was 1197 compared to 1425 in 2021. This represents a decrease of 16% from 2021. The average sales price in 2022 was $379,990 versus $358,309 in 2021, for an increase of 6.1%. My takeaway from these numbers was that sales are leveling off, but prices remain elevated due to a continued lack of good inventory.
For December 2022, closed sales were down 35.4% from December 2021. However, the average sales price rose 3.6 percent over December 2021. This was mainly due to lack of inventory. Our inventories increased in December 2022 by 24.6% over December 2021. At the beginning of this year, we were up to a 2.5 month’s supply of homes for sale. Although that is an improvement, a balanced market is usually seen as a 5.5 to 6 month’s supply of homes. (A balanced market is neither a buyer’s market nor a seller’s market.)
We continue to need homes to sell. If you’re even thinking of selling your home this year, please give us a call. We can do a Comparable Market Analysis for you at no charge. The market analysis will let you know what your home should sell for in the current market compared to similar homes that have recently sold.
If you are looking for first home, second home, retirement home, or an investment property, please let us help you. We are very aware of market conditions here in the mountains and will put our many years of experience to work for you.
2023 Real Estate Forecast
It’s always tough looking into the future without a crystal ball. The only thing to rely on is past experience. Yet the problem is we have never gone through a pandemic, followed by a real estate boom, followed by high inflation, and higher mortgage rates. Some experts are calling for a recession, and slower real estate sales. The last recession that began in 2007 was driven by mortgages that were given out like candy, with little or no oversight as to the buyers’ ability to make payments in the future. This was compounded by 8 million job loses, taking away the means of many buyers to make those mortgage payments. Many foreclosures began and continued for years.
Moving to the present, laws were enacted to prevent predatory lending, and make sure buyers could afford their payments. Therefore, most mortgages today are much more stable than in 2007. Also, there seems to be plenty of jobs available for those who want to work. So, at least currently, there seems to be no danger of mass unemployment. One of the biggest reasons preventing a recession in real estate is inventories. In most parts of the country, and especially here, there are not enough houses on the market to fill buyers’ needs. During and after the pandemic a home-buying frenzy began. This was partially caused by many workers having the ability to work remotely, and partially by the rush to buy vacation rental properties. Then this year when mortgage rates increased, many homeowners with mortgage rates in the 3 to 4 percent range have been reluctant to sell their homes knowing the mortgage rate on a replacement home would be considerably higher.
Now the forecast: It appears to us that home prices will stabilize at current levels or decrease slightly in the first half of 2023. Home sales will decrease some, mostly due to insufficient inventories of available homes. We also believe that mortgage rates will drop some from current levels as demand decreases. However, the days of 3 percent mortgages are definitely behind us.
If you are looking to buy a home, or looking to sell, let us help you navigate the housing market.
Local Market Update for November
Looking at the final numbers for real estate in Haywood County for November 2022, it seems sales are leveling off and getting back to normal. New listings are still lagging last year’s numbers, so inventories are still tight. New listings this November were off 10.5% from November 2021.
Sales were off 25.2% from November 2021. We sold 98 homes in the county this November, compared to 131 homes in November 2021.
The average sales price of $376,676 remained about the same from November 2021 to this November. Again, this was probably a result of tight inventories.
Days on the market until sale increased from 27 days in November 2021 to 35 days this November. This would also reflect a normalizing of the market.
Although home inventories remain tight, we increased the number of homes on the market by almost 17% from November 2021 to this November. Based on sales rates and available inventory, we now have a 2.8 month’s supply of homes on the market. In November 2021 we only had a 1.9 month’s supply of homes on the market. This increase is welcome, but a balanced market is usually regarded as a 6 month’s supply. A balanced market is one where there is an equal number of buyers and sellers. (Neither a buyer’s market nor a seller’s market)
As a result of being a “destination market” for second homes, vacation rental homes, retirement homes, and employees working remotely due to the pandemic, our market went crazy for over 2 years. From the current numbers, it would seem our market is now normalizing once again.
As with most markets, the only constant is change. If you are thinking of buying or selling here in these beautiful mountains, let us help you negotiate our changing market.
Thank You for 2022!
Instead of another real estate blog, I would like to pause a moment to sincerely thank all of our clients and customers. This has been one of the best years we have ever experienced. Without all of you, our successes would not have been possible.
Too often life and business seem to get in the way. We don’t stop to consider our blessings and thank those who make our blessings possible. In many communities and even in some families, we are divided by politics or religion and are almost afraid to talk to one another. We all need to put those differences behind us and be civil to each other again. If we can’t always find a way to do that, maybe we can make an exception for the upcoming season. Let’s all try to at least be kind to each other. That would be my Christmas wish.
So, Merry Christmas, Happy Hanukkah, or Seasons Greetings! But to all of you who worked with us this year, Thank You! for trusting us to help with your real estate needs.
October Real Estate Results
The information provided below is based on local market updates from Canopy MLS for Haywood County, NC.
New listings were down 11.8% from October of last year, and closed sales were down 23.6% from October of last year. Rising interest rates on home mortgages have kept many homes off the market. Potential home sellers who have low interest rate mortgages have no desire to sell their home and buy a new home with a much higher mortgage rate.
The average sales price of homes was also down to $356,924. This is down 5.1% from October of last year, and down 11% from September of this year.
The average days a home spent on the market until it sold in October was 46 days. This is over 50% longer than homes spent on the market until they sold in September of this year.
A balanced market in real estate is usually considered a 6 month’s supply of homes. (Neither a buyer’s market nor a seller’s market) Going back to April of this year, we only had a 1.1 month’s supply of homes on the market. (A seller’s market) Inventories have increased steadily since then. In October we had a 2.7 month’s supply of homes on the market. This is still a seller’s market, but it is trending toward more inventory every month. If this trend continues, we could be back to a buyer’s market in just a few months.
To sum things up, real estate can be a rapidly changing market. If you are considering buying or selling, we invite you to let us help navigate the market.
Housing Market Outlook
Why is the housing market different today than it was in 2008 before the housing crash?
- Housing inventories ae very low. The nation is about 3 million homes short of meeting buyer demand.
- Buyers still want to purchase homes. Affordability has taken a hit with both home prices and mortgage rates rising, but buyers are still looking for and purchasing homes.
- Mortgages are very different than in 2008. Subprime lending that was blamed for the 2008 crash is much smaller and more regulated than in 2008.
- Far fewer homeowners are behind on their mortgage payments than in 2008.
- Real estate can be a hedge against inflation. Locking in a fixed rate mortgage now protects against future increases. Also, should mortgage rates fall in the future, homeowners can refinance at lower rates.
- Some markets may experience a small decrease in home prices as markets adjust. Keep in mind a decrease of 5% or so in some markets is not the same as a market crash.
