Video from John – Market Update – March 15th, 2023
Current Real Estate Market Update: Outer Banks and National Trends
John Head, VP of Sales & Marketing, REALTOR®/Broker
Greetings from the Outer Banks! This is John Head, and today I want to provide you with a comprehensive market update. In response to the ongoing discussions about the real estate market, I’ll be incorporating both national statistics and local insights to shed light on where the market stands and where it might be headed. So, buckle up for a detailed overview of the real estate landscape.
National Real Estate Overview
Let’s start with a glance at the national real estate scenario, backed by economic indicators. Despite the chatter about a potential recession and uncertainty surrounding interest rates, the overall trend remains positive. National home appreciation has been a consistent factor, historically averaging around 5%. This year, a modest 3 to 5% appreciation is anticipated. To dive deeper into the numbers, I’ve prepared a slideshow that you can access here.
2023 Home Forecasts
Examining forecasts from Fannie Mae to the National Association of Realtors (NAR), the average projection for home appreciation across six indicators is currently at 3.9%. Interestingly, NAR, despite being the most conservative in its estimates, emphasizes median price points, which may not always accurately reflect market dynamics.
Market Trends and Analysis
Taking a historical perspective, we compare the 49-year average with the movement in 2023. While early in the year witnessed some depreciation, the market rebounded through the spring and summer, aligning with typical trends. The Case-Shiller index, along with FHFA and CoreLogic indicators, shows positive territory in home value changes month over month, though not as robust as the peak years during the pandemic.
Interest Rates and Mortgage Trends
Addressing the elephant in the room – interest rates. Currently hovering around 7.625%, the spread over the 10-year treasury is a significant factor. Mortgage lenders anticipate a pullback in rates in the first quarter of next year and speculate further reductions by the end of 2024. The current spread of 3% is higher than the historical average of 1.72%, reflecting lenders’ strategies to cover costs and potential refinancing.
Real Estate as an Investment
Despite uncertainties, real estate remains a key avenue for wealth building. Owning property, especially in second-home markets like the Outer Banks, has consistently shown growth in net worth. The comparison between those who bought during the post-recession years and those who didn’t highlights the long-term financial benefits of real estate ownership.
Economic Indicators and Recession Concerns
Addressing concerns about an impending recession, historical data indicates that home prices often weather economic downturns. With current unemployment rates at 3.9%, well below recession levels, and considering the limited inventory in the real estate market, a significant downturn seems unlikely.
Local Real Estate Update
Now, shifting our focus to the local scene, the Outer Banks market is experiencing a 29% decrease in overall sales due to a significant shortage of inventory. Despite this, the median price stands at $702,000 with an impressive 39% of purchasers paying in cash, reflecting a robust market.
As we navigate the intricacies of the real estate market, it’s essential to stay informed. Whether you’re considering buying, selling, or simply monitoring market trends, Colony Realty Sales Team is here to provide insights and answers to your questions. Feel free to reach out to me at email@example.com or contact any team member directly for additional information. Wishing you a fantastic Thanksgiving, and until next time, take care and have a great day!
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View/Download Slideshow from today’s Market Report November 17th, 2023