The new year is upon us, and this will mark 20 years selling real estate in and around this wonderful area of New Bern. So as 2022 is ending and 2023 is beginning, now is a great time to look at where the real estate market has been and ponder in which direction it may head from here. Note, my new crystal ball I got for Christmas didn’t come with batteries and I haven’t been able to find any.
The real estate market roared into 2022 with historically low interest rates, prices moving up rapidly and inventory levels at unprecedented lows. We saw bidding wars between buyers, buyers waiving inspections, and sellers able to sell pretty much any home they put on the market. Buyers became less picky about the condition of a house and how updated the cosmetics were.
Interest rates in the high 2% and low 3% range made homes more affordable to more people. Interest rates that low are less than half of what the 40-year average mortgage rate is. With homes selling so fast, the inventory levels stayed low with usually less than 100 homes on the market that a person would be able to move into within 30 – 40 days. Most new construction homes were selling before the developer could put the roads in the neighborhood or the builder lay the first brick to start building.
With building material shortages, it kept people waiting 6 – 12 months or more for their homes to be built. Understand, the interest rates, the inventory levels and the lack of concern by buyers on the condition of a house was anything but normal and something we will not likely see again anytime soon.
In late April, we started really hearing Chicken Little screaming “the sky is falling,” or maybe more like interest rates are rising. The feeding frenzy of the pandemic came to a halt, though that does not mean the real estate market stopped moving.
Interest rates rising kept some buyers from being able to afford to buy a home in their budget that fit their wants and needs. Interest rates rising made people think they should wait for interest rates to come back down to history’s lowest rates ever in the US, which is not likely to happen. The market did slow down and any realtor that has been selling real estate for longer than 2 years or who has done their homework will tell you the real estate market is still good. The real estate market has returned to a normal speed, yet on the positive side of normal.
So, what does 2023 and beyond hold for our local real estate market? It is my opinion that New Bern and our surrounding areas are in a really unique opportunity with our market. We are seeing much higher priced markets see a slow down and some even seeing prices decline. However, our area has a lot of good growth. Like it or not, Interstate 42 will be a big economic boost for our area. Cherry Point bringing in new squadrons for the F-35s will bring more employed people to the area, encouraging growth. Growing areas usually bode well for local real estate markets and we are in a growing area.
Though interest rates are higher than they were but lower than the 40-year average, I believe now is a great time to buy real estate. Most people moving to New Bern and surrounding towns are coming from much higher-priced areas. Our market has room to grow and is one of the few markets in the United States that is expected to have positive price gains over the next year. Also, if you really think of real estate as a long-term investment, as it should be looked at, do you think our real estate prices will be cheaper in 5 or 10 years than they are now? I believe the prices will be much higher in 10 years, so I am trying to buy real estate now if you know anyone looking to sell!
We are fortunate to live in such a great area with a lot of natural beauty in the rivers, national forest, history, and especially the people. As an Eastern North Carolina farm boy, I love the small-town feel of New Bern. As an active real estate agent, I also know that growth is coming, and our real estate market will be growing with it!
By Rowland Bowen, Rowland and The Home Sales Team