Days on Market is falling across the Carolinas and prices are climbing!

When mortgage interest rates reached above 5% the real estate market came to a near screeching halt. Contract cancellations were through the roof as buyers could no longer afford the monthly payments they had been approved for just a few weeks or months prior. Some buyers panicked and expected the housing market to tank and they didn’t want to get stuck holding the bill. In January and February of 2023 it started to look like they were right and analysts across the world were screaming that the crash was here! They couldn’t have been more wrong. 

The graph below illustrates the market in two ways. First, the Orange line illustrates the average home sales price from January of 2022 to May of 2023. Some blips along the way with the largest drop in November and December of 2022, but a not so surprising rebound in January of 2023, followed by an ALL TIME RECORD HIGH of $750,000 in May of 2023. 

Second, the blue line indicates the average Days on Market before a home went under contract. In nearly all of 2022 the average was less than one week before the the numbers began creeping up in August and September of 2022 with a peak of 32 days on market in February of 2023. Then, again as a not so surprising rebound, the average days on market plummeted in less than 60 days a near record low of 3 Days on Market! 

If you’re looking at this data alone and didn’t pay attention to the mortgage market or interest rates it would be understandable to think that interest rates peaked in February of 2023 and dropped back down in March and April. But, since we’ve all likely been paying attention we know that is nearly the exact opposite of what’s happened! 

The graph below represents the 30yr and 15yr mortgage rates from January of 2022 through June 2023. As you can see there was a sharp incline at the beginning of 2022 that peaked in November and then slid slightly in January, but never below 5%. Since January of 2023 rates have only risen more to todays nominal rate of 6.67%.

What does this information mean? First, it means the real estate market “crash” is likely over. Yes, homes sold for a little bit less and sat a little bit longer on the market for the period of about 60 days, but those days are done, at least for now. We might see another small blip similar to the top graph this winter, but that would actually be in line with our typical seasonal sales trends. 

Buyers have accepted that rates are higher, but they’re not permanent. Sellers are still deciding to sell and make lifestyle moves because that still fits within their plan. Although higher interest rates scare off many buyers and sellers from making a move, the ones making the move are still finding great success and great value. Affordability is undoubtedly a challenge for many, but the market is still showing us that there are plenty of buyers and sellers out there to continue to drive strong home pricing and a strong summer real estate market. 

Please keep in mind this data is specific to our local market and what is happening here is happening because this is a highly desirable place to live. Many cities around the country are seeing major struggles in their markets because they are not the most desirable. 

If you have any questions about this data, about the market, or just want to discuss buying, selling, or renting real estate please don’t hesitate to reach out to me directly. 980-250-2795.