Here are three hot topics in the housing market right now and how they are impacting North Carolina.
If you’re a prospective buyer or seller, it’s important to understand the current real estate market conditions, housing supply and how it can affect you.
#1 Russia and Ukraine: The impact on North Carolina
The conflict in eastern Europe is causing concern in many ways. Beyond the humanitarian impact, we are seeing a correlation in the real estate market and beyond.
Homebuyers in the Triangle are looking for affordable homes with more land and better amenities in suburban and rural areas. That means longer commutes to work and shop which equals an increase in gas consumption as well. In addition to higher gas prices, the Russia-Ukraine conflict is disrupting the global marketplace. More specifically, within the supply chain which has yet to rebound from the effects of the pandemic.
#2 Housing Supply and Affordability
Raw material costs remain high and builders continue to struggle to keep up with homebuyer demand.
There’s an estimated 4 to 6 million homes that we’re short in the U.S. Even though new housing starts are at their highest in a decade, it’s still slow getting them off the ground. There’s a backlog, and there’s a home shortage.
The cost gap between owning a starter home and renting widened in 2021, and though the trend shows little sign of reversing, costs do appear to be leveling out so far in 2022.
There is some good news. Homes are still more affordable than they have been historically. So even with the recent increase and another looming around the corner, mortgage rates are still historically low giving you more buying power. And while housing supply is still low, we’re seeing steady increases in the number of homes coming to market, which gives hope to homebuyers. As the supply of homes for sale improves, buyers will have more options.
#3 Competition among homebuyers remains fierce
Although home sales fell slightly by some metrics during the first quarter, that may just be a seasonal pattern. Most experts expect the spring to be as busy as ever for real estate transactions.
We’re likely to continue to see these extraordinarily tight conditions in the homebuying market like fast closing timelines, all cash offers, high due diligence fees, and offers well over listing price–which can make it especially difficult for first-time homebuyers to compete.
Home Buying Preparedness Tips in a Competitive Market:
- Get prequalified or preapproved for a mortgage. Lock in your rate.
- Research the neighborhood where you want to move and stay open to other options
- Understand your “have to haves” versus “want to haves” when you’re looking at properties
- Be prepared to act quickly. Some homes sell within minutes or hours once they hit the market.
- Continue to cut frivolous spending and retain those savings for due diligence fees and earnest money deposits.
Don’t wait to buy if the numbers seem to work out for you now.
Most likely, a year from now, mortgage rates will be higher and home prices will be even higher, especially in the Triangle area. The market might leave you behind if you try to hold on for more favorable conditions.
For sellers, meanwhile, it’s still a good idea to make sure your property is attractive to buyers and that your asking price is reasonable. Just because the market is in your favor doesn’t mean it’s a good idea to sell it “as-is”. Light updates can make a significant impact. Don’t leave money on the table! It’s also smart to make sure you know where you’re going next, whether that means buying another property while you sell your current one, or having a rental lined up. Many homes sell within hours. If you’re curious how much you can get for your home, or if you’re not sure where to begin, connect with our team. We can create a home selling roadmap together.