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Market Update June 15, 2023

Market Update June 15, 2023

John Head, VP of Sales & Marketing, REALTOR®/Broker

I’m very excited to share with you the latest update from the MLS Statistical Report. I’m not gonna spend a lot of time on the hard numbers of what this report indicates, more importantly I want to share that our inventory is still low, and prices are still holding firm. We’re not pushing the envelope, we’re not seeing great appreciation numbers, or people reaching for 15 or 20% over what they bought for in 2021/ 2022.

The reality of it is, with very limited inventory, it’s still a great market. Supply and demand is still there.

When it comes to the Residential Median Prices, in ’21 they were 470. In May of ’22, they were 595. Now they’re 537 indication of -10% over this time last year.

National Association of Realtors, and a lot of people, use median price points to judge where the market is going, however, this is not a true indicator in a market with very tight inventory and pretty relatively quick sales.

Our average days on market is just up: It was 94. It’s now 99 – that number is climbing up a little bit.

Keep in mind when it comes to median price, that we’re selling more lower priced properties than higher priced properties, which hasn’t affected the value of any one property.

For example: if you had two dimes and a nickel in your pocket, the change in your pocket would be averaging at a dime. But, if you had two nickels and a dime, you would have five cents, roughly, as the way the median price works. However, that doesn’t change the value of either the nickels or the dimes- and that’s what’s happening with this reporting that we’re seeing here in the news. As we all know, bad news sells, because we’re all glad we’re not the victim of the day, but the reality is the predictors of the last year were not correct with the call for a hard reset in the real estate market.

Subsequently, we’ve renamed the “COVID years” to “unicorn years” because, COVID made it tough for a lot of folks, with so much sorrow and loss. Going forward you will hear me refer to those couple of years as “unicorn years” now instead, because they were true anomalies. We couldn’t have predicted how fast and hard the market and real estate was going to jump, especially in our second home markets.

Let me share what I think is happening now. You’ve heard me mention this before in my previous report, that I felt we were not gonna see any appreciation. We could see a small negative dip (which we have), but I’m going to share the following graphics (refer to video for visuals) from Case-Shiller, FHFA, and CoreLogic, and Zillow. I wanted to share because they all show very similar trends. Last year we had a good run-up, and followed by a dip after all the negative news. Now we’re already climbing through some numbers.

To re-reference, I believe we’re going to come back to some of our historical norms. I expect to see a 5% to 10% appreciation rate here on the Outer Banks in the second home market.

What does that mean for you? Well, it’s still a good, healthy market with limited inventory. Looking at the trend lines of all four of these reports, you see what’s happening. Every company that does these studies use different algorithms and different metrics to derive a number, but you’ll see that they’re all tracking the same, and that’s exactly what we’re seeing here locally in the Outer Banks.

To those of us who live here, love it here, and hope to stay, that’s great. If you’re thinking about selling, you’re still in relatively good shape. If you are a buyer, as far as the interest rate goes, if the Treasury takes the foot off the gas, and avoids another increase right now, we’re gonna be in another swell market because 5% money on real estate is still reasonable cheap money.

I will share one last thing here. I want want you to concentrate when the news media says the median price houses are down 15% or 20% wherever you’re living at, wherever you’re seeing the news. Remember what I’ve shared today, that median sales price measures the middle price of homes that have sold (meaning that half of the homes sold for a higher price and half sold for less.) It is not a very useful for measuring home price appreciation because it is affected by the composition of homes that have sold.

The higher-end, million-plus dollar houses are a little slower to sell. The $500K to $750K range is still a fairly brisk market here.

When you hear the bad news- that everybody’s now projecting that we’re gonna see a recession in the fall- stay educated, at present, our numbers aren’t indicating that. All Inventory, you’ll see right now, is down 14% at 767. Keep in mind that all of our inventory encompasses Carova to Ocracoke for the most part. I don’t work those particular areas of the market very much (off the pavement in Carova, or down in Ocracoke), so I limit my searching to just Corolla the Hatteras village, including Manteo. For single family homes, there’s 201 for sale from that range, Corolla, Hatteras Island, Manteo and Wanchese. Out of that 201, two are pending and continue to show. So there’s 199 homes for sale. Key factor here is that we’re coming back to where we were. Previously it was under 30 days to sell, now we’re averaging 99 days to sell. It’s taking a little longer, but, the reality of it is, the market’s good, demand is strong but we still have limited inventory.

If you have questions about the content of any of this information, just drop a line in the “contact us” form on this page and we’ll be in touch. Thank you and have a great day, until we see you here at the beach!

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