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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?

  1. Housing inventories ae very low.  The nation is about 3 million homes short of meeting buyer demand.
  2. 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.
  3. 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.
  4. Far fewer homeowners are behind on their mortgage payments than in 2008.
  5. 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.
  6. 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.

September Real Estate Sales Results

Wow, the colors are really beautiful this year.  At 5,000 to 6,000 feet the colors are already past the peak.  The fall colors are brilliant and gorgeous from 3500 to 5000 feet and will soon be beautiful at 2500-3000 feet here in Maggie Valley.

Okay, now, let’s talk real estate sales.  In September we had 141 new listings come on the market in Haywood County.  Last year in September we had 142 new listings come on the market, so very little change there.  Last year in September we only had a 2.1 months’ supply of homes on the market.   This year our inventory has risen to a 2.7 months’ supply.  So, our inventory has increased a bit, but is still far short of a 6 months’ supply, which is considered a balanced market.  (Less than 6 months is a sellers’ market, more than 6 months is a buyers’ market.)  As long as inventories of homes for sale remains low, prices should continue to rise a small amount.  At some point, prices should level off, or even decline a small amount with mortgage rates continuing to rise.

In September we sold 113 homes in Haywood County, compared to 134 homes in September last year.  This was a decrease in sales of 15.7% year to year.  Prices, however continued to rise in September to an average of $401,183, which was a 3.4% increase over September 2021.

Average listing prices continue to rise.  In September 2021 the average listing price was $355,319.  This year the average listing price is $447,986, which is a 26.1% increase year over year.  In my opinion, this is a knee-jerk reaction by sellers, and some real estate agents to the strong sales market and low inventory.  I believe some homes are now a bit overpriced on the market.  If you are considering buying a home, make sure your agent does a comparison to similar homes that have recently sold to give you some guidance on an offering price.

The last couple of years have been unique in our market.  If you are considering buying or selling a home, let us share our years of experience to help you make a smart choice.

(All market statistics courtesy of Canopy MLS and 2022 Showing Time.)

 

Fall Colors in the Mountains

I am sitting here in the office thinking about the devastation around Fort Myers in Florida.   Words can’t express how that makes me feel.  We are all concerned for those who lost family, pets, homes or property during the storm.  Hopefully we will watch the recovery and rebuilding progress soon.

Fall colors are coming soon.  Here in Maggie Valley, you can see the colors just beginning at the tops of the highest peaks.  The birches and spice bushes are turning yellow and some of the maples have a touch of red.  In town the Bradford Pears are turning red on the top halves of the trees.  It’s amazing to watch the colors march down the mountains in October.  Full color should occur here about the 22nd of October.  However, that varies with location and altitude.  The great thing about fall color is if you are not here exactly at the peak, it’s usually peak color somewhere near here.   If there’s not much color yet here in the valley, get on the Blue Ridge Parkway.  The colors always begin at higher elevations.  If the colors are past peak on the parkway, travel the lower roads.  Take Hwy 215 from Canton by Lake Logan, and on toward Rosman.  If colors are past peak here in the valley, try the Nantahala Skyway near Robbinsville, NC.  They are southwest of us, so the colors seem to be a bit behind ours.  In other words, get here from October 10th to the end of October, and colors will probably be peak somewhere.

We look forward to your visit.  Stop by and say “Hello”.

 

 

August Real Estate Sales Results

Another month is already come and gone.  It seems the older I get, the faster they go.

We did have an increase in the number of New Listings come on the market in August.  New listings were up 17.5% from August 2021.  This is good news, as we currently have a shortage in homes on the market within the Maggie Valley/ Waynesville area.  This gives us a 2.4- month supply of homes on the market.  This is an improvement over previous months inventory, but still definitely a “Sellers’ Market”.

Closed sales in August dropped 3.9% from August 2021, and days on the market for listed homes increased by 23.8%.  The market is strong, but these numbers seem to indicate the market is leveling somewhat.  The average sales price was up 5.8% from August 2021 to a price of $398,087.   This was a substantial increase, but not as large as increases seen in the previous few months.  Again, this indicates at least a slowing of the price increases we have seen monthly since Spring of 2020.

The average list price of homes coming on the market in August rose 3.8% from August 2021 to $421,798.  This is down from the year-to-date average list price of $438,410, yet another indicator of the market leveling off a bit.

I hope these numbers help you get a feel for market conditions here.  If you have any questions or comments, please let us know.

Thanks to Showing Time and Canopy MLS for the data provided above.

 

Agency & Agency Relationships

I have posted this article before, but I still receive questions from both buyers and sellers about agency relationships, so I am posting again.

The buyer’s representative (also known as a buyer’s agent) is hired by prospective buyers and works in the buyer’s best interest throughout the transaction. The buyer can pay the agent directly through a negotiated fee, or the buyer’s rep may be paid by the seller or through a commission split with the seller’s agent.

The seller’s representative (also known as a listing agent or seller’s agent) is hired by and represents the seller. All fiduciary duties are owed to the seller, meaning this person’s job is to get the best price and terms for the seller. The agency relationship usually is created by a signed listing contract.

A subagent owes the same fiduciary duties to the agent’s customer as the agent does. Subagency usually arises when a cooperating sales associate from another brokerage, who is not the buyer’s agent, shows property to a buyer. The subagent works with the buyer to show the property but owes fiduciary duties to the listing broker and the seller. Although a subagent cannot assist the buyer in any way that would be detrimental to the seller, a buyer customer can expect to be treated honestly by the subagent.

A disclosed dual agent represents both the buyer and the seller in the same real estate transaction. In such relationships, dual agents owe limited fiduciary duties to both buyer and seller clients. Because of the potential for conflicts of interest in a dual-agency relationship, all parties must give their informed consent. Disclosed dual agency is legal in most states, but often requires written consent from all parties.

Designated agents (also called appointed agents) are chosen by a managing broker to act as an exclusive agent of the seller or buyer. This allows the brokerage to avoid problems arising from dual-agency relationships for licensees at the brokerage. The designated agents give their clients full representation, with all of the attendant fiduciary duties.

A transaction broker (sometimes referred to as a facilitator) is permitted in states where nonagency relationships are allowed. These relationships vary considerably from state to state. Generally, the duties owed to the consumer in a nonagency relationship are less than the complete, traditional fiduciary duties of an agency relationship.

The above is from RealtorMagazine.com

July Real Estate Sales Results

Listening to the TV pundits or reading internet articles about housing, one would think we are certainly headed for a recession.  Reading the final results for July real estate sales in Haywood County contradicts this prediction of doom and gloom.

For Haywood County as a whole, new listings were down almost 22% from July 2021. (Keep in mind that inventories were low last year, pushing prices higher as buyers competed for homes in a tight market.)  Closed sales were down 16.7% from last year.  This was most likely caused by a smaller inventory of homes this year versus last year.  (295 homes for sale in July 2021 versus 256 homes for sale in July 2022.)  The average sales price of homes in July was up from $334,344 last year to $407,608 this year.  (This represents a 21.9% increase in prices year to year.)

As I have speculated in previous blogs, as long as inventories remain low, and buyers’ interest remains high, prices will continue to increase, although I believe prices will start to level off in the next 30 days.

The numbers reveal we are still in a “sellers’ market” and will remain a “sellers’ market” for the near term at least.

If you are thinking about selling your home, please consider letting us guide you through the process.  If you are a prospective buyer, we can help you find your little corner of these beautiful mountains.

Thank you!

Real Estate Forecast:

Below is a timely article shared from Realtor® Magazine:

Real Estate Forecast: Market to Ease Despite High Home Prices

A housing slowdown precipitated by low inventory and rising mortgage rates will open opportunities for some buyers, NAR Chief Economist Lawrence Yun predicts.

July 28, 2022
Catherine Mesick

Even though national GDP contracted for the second quarter in a row and home sales have fallen for five straight months, property prices are likely to continue growing because of low inventory, Lawrence Yun, chief economist for the National Association of REALTORS®, said Wednesday during NAR’s quarterly Real Estate Forecast Summit. Yun offered his economic and housing market predictions for the remainder of this year and into 2023 at the event.

One of the most unusual aspects of the current economy is the labor market, Yun said. There were more job openings than unemployed people in May—with the difference being nearly two to one, according to Bureau of Labor Statistics data. Construction job openings were at a record high in January, and these unfilled jobs point to a potential slowdown in the housing market, Yun said.

Both existing-home sales and pending home sales have been falling or stagnant for months, NAR data shows. Rising mortgage rates have combined with low inventory to exert downward pressure on the market. “Closing activity will continue to sink even more,” said Yun. “Some [potential home buyers] don’t want to pay higher monthly rates. Others can’t.”

Hope for Consumers

There are bright spots in the market, such as gradually increasing inventory, which is good news for consumers. “They no longer have to make an offer after seeing only one [house],” Yun said. “They can see three or four. It’s returning to a normal process.”

Despite some homes with high list prices beginning to languish on the market, the overall lack of inventory is still leading to price gains. “Even after reductions, prices are still higher compared to one year ago and much higher compared to before the pandemic,” Yun added.

Though the Federal Reserve is expected to hike interest rates several more times this year, Yun said mortgage rates won’t rise much further because lenders have already priced in the potential increases. This can mean increased opportunity for consumers. “We may be topping out independent of what the Fed will do,” Yun said. “Rates will go a little up and a little down. It may be a good idea to lock in when the rates are down.”

He also noted that foreign investment in U.S. real estate is still well short of pre-pandemic levels but predicted that international interest is likely to increase as travel restrictions ease.

Finally, Yun predicted that in 2022, total home sales will be down 13% from the previous year, home prices will be up 11% and total dollar volume will be down 2%. For 2023, he predicted no increase in home sales, a 2% hike in prices and a 2% increase in dollar volume.

Current Trends and Market Opportunities

Jessica Lautz, NAR’s vice president of demographics and behavioral insight, also provided data from the June REALTORS® Confidence Index. Among her key findings:

  • Median days on market for homes nationwide hit a record low of 14.
  • The average number of offers per property dipped to 3 from a previous high of 5.
  • Approximately 30% of buyers are waiving inspection and appraisal contingencies—a number that has held fairly steady since the start of the pandemic.
  • The share of all-cash buyers currently stands at 25%. This number has actually decreased from a high of 35% in 2014.
  • First-time buyers are still being sidelined and make up 30% of the market. Historically, they make up around 40%.

In addition, Lautz offered five “touch points”—opportunities for REALTORS® to reach out to clients in the current climate.

  1. Twelve percent of buyers are purchasing homes virtually—and they want a REALTOR® to assist with the process.
  2. Remote work continues to influence buying trends: 34% of buyers want features that enable them to work from home.
  3. Consumers continue to have a skewed view of the typical amount required for a down payment. Thirty-five percent of buyers believe a down payment of 16% to 20% is required; 10% of buyers believe they need a down payment of more than 20%. However, the typical down payment for a first-time buyer is only 6% to 7%. For a repeat buyer, it’s 17%.
  4. There is value in promoting energy efficiency in listings: Forty-four percent of REALTORS® say it’s “somewhat valuable,” and 19% say it’s “very valuable.”
  5. Seven in 10 buyers report a desire for the latest in heating and cooling, windows and doors, insulation, lighting and appliances; however, the typical home purchased is 29 years old and unlikely to have the newest features. This disconnect presents an opportunity for REALTORS® to contact previous clients about satisfaction with their current home and any improvements they have made.

 

June Real Estate Results

Continuing with the same theme as last month, June 2022 was a strong month for real estate sales, and especially sales prices.  Our average sales price in Haywood County jumped from $315,331 in June 2021, to $380,002 in June 2022.  This represents a 20.5% increase year over year.  Our total inventory of homes for sale in June 2021 was 273.  In June 2022 we only had 249 total homes for sale, or an 8.8% decrease in inventory.  As long as our inventory remains low, expect average sale prices to continue upward.

The average list price of a home coming on the market in Haywood County during June 2021 was $379,317.  During June 2022 the average list price of a home coming on the market has risen to $486,724.  This is a 28.3% increase in list prices year over year.

I keep looking for inventories to increase, which might take the pressure off sales prices, but so far, that has not happened.  One reason that sales remain strong, and inventories remain low is directly related to short-term rentals, in my opinion.  Investors keep buying properties and placing them in short-term rental program apps like Air BnB, or VRBO.  Also, there are local real estate rental companies managing short-term rentals for investors.  As long as there is this huge demand for short-term rental investment properties, demand pressures will keep inventories low, and prices will continue to edge upward.

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