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Is the Market Crash Over?

Monday, May 20, 2024   /   by Matthew Lawson

Is the Market Crash Over?

How that affects local real estate market

Today the Federal Reserve followed through on their promise to increase the federal funds rate following a short pause in June. The increase of .25% comes as no surprise as the Fed’s had announced the likelihood that they would continue to increase rates following the short pause last month. 

Consumer confidence reached a 2 year high in June following a more favorable than expected CPI report citing that inflation had fallen more than expected to 3%. The Fed’s previously stated their inflation benchmark was 2% and they would continue to assess and increase rates as needed until they reached their benchmark rate. Today, the increase of .25% raises the benchmark rate to between 5.25 - 5.5%, a number not seen since 2007. 

The Fed chair also made a point in a brief interview following the announcement that the Federal Reserve and respective committees would continue to monitor inflation data and make further increases if warranted. It was also specifically stated that rates would not decrease this year. The next Fed meeting is scheduled for September. 

There’s a lot to unravel from the announcement made today, but the question on the front of everyone’s mind is what’s next? Consumers have felt the tightening of the purse strings as inflation dips and interest rates rise. Housing prices have remained high, in fact in our HQ zip code of 28173 the average homes sales price hit an all-time record high in May. There’s no right answer, no crystal ball to show us the future, but the data is pointing in the same direction, up. 

The Charlotte region has risen in popularity since before the COVID pandemic among East Coasters looking to relocate from our heavily tax burdened northern neighbors. As over 100 people per day move to the Charlotte region it’s no surprise that home values continue to rise and inventory levels remain at near record lows. Although interest rates have increased steadily, the mass migration to the Carolina’s has not faltered. 

Although there are many unknowns regarding the market ahead of us, what is most certain is that people love living in Charlotte. There’s an abundance of family friendly activities, restaurants, night life and the job markets remain strong with a solid tech and financial sector. Couple that with some of the most desirable school districts scattered around Charlotte and it’s no surprise the demand for housing remains strong. 

It's my belief that home values will hold through the remainder of the year as inventory undoubtedly begins to fall at the end of the summer season. Rates are expected to remain high until the new year, which coincidentally happens to be an election year. As inflation undoubtedly falls to 2% or lower the Fed’s will look to kick start the economy back up with a slow and gradual decrease in the benchmark rate while keeping an eye on inflation data. I would expect that into next year we’ll see home values begin to creep up slowly through the Spring and into the summer, somewhere in the 3-5% range in desirable districts. 

It's impossible to predict the future of course, but I truly believe that the markets will remain relatively stable throughout the next 6-12 months. This may not be the news buyers have been looking for as they now contend with even higher interest rates and low overall inventory. Sellers may be able to continue to reap the benefits of homeownership, but will have to contend with the same inventory woes when it’s time to buy. 

If you want advice, want to discuss the market, or just want to better understand what’s happening in Real Estate feel free to reach out to me at Matt@briggsamerican.com or my cell at 980-250-2795. 

Briggs American Homes at Real Broker, LLC
Matthew Lawson
5960 Fairview Rd Ste 400
Charlotte, NC 28210

Based on information submitted to the MLS GRID as of 6/13/2024 4:13 PM CST. All data is obtained from various sources and may not have been verified by broker of MLS GRID. Supplied Open House Information is subject to change without notice. All information should be independently reviewed and verified for accuracy. Properties may or may not be listed by the office/agent presenting the information. Some listings have been excluded from this website.
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