Real Estate home prices have rebounded in NC
Spring is coming and typically it’s high time for real estate sales. Sarah Finch leads us through the ups and downs of eastern North Carolina’s current real estate market.
The good news is Home Sales are up from lows during the great recession, but not at peak price, which makes for a good buyer’s market. But that doesn’t mean it’s great across the board.
“You know there’s no such thing as a National Real Estate Market. It’s so localized.”
That was Mary Cheatham King, based out of Morehead City. She has been in real estate since 2003 and has seen many shifts in the property market. This time around, despite a growing state economy, the rebound in home prices has varied considerably within the state.
East Carolina University Department of Economics Professor Philip Rothman.
“My hunch is that recovery of real estate prices is likely to be stronger in the larger towns and cities of the area as opposed to the smaller places.”
While the local economy affects these different markets, the real estate industry as a whole plays a significant role in our state’s financial status. Last year, it accounted for 68.6 million dollars, which made it the second largest industry contributing to North Carolina’s Gross State Product.
Real estate is such a large part of GDP, that some believe significant changes in the housing market can affect the trajectory of our economy as a whole. Case in point would be the Great Recession, where deflating the housing bubble nearly collapsed the entire financial system.
Under normal conditions, the strength or weakness of our overall economy is what charts the course for housing. In a vibrant economy, jobs are plentiful and the personal mobility and income that results is translated into strong numbers for home sales.
“In a normal economy with GDP growth rate and income growth rate back at normal levels then there seems to be a pretty natural process as people work their way through their life cycles.”
A typical person moves through a series of houses over the course of their lifetime. The size and location of these homes will change as the individual’s needs transition, such as larger properties for growing families or unique communities for retiring couples.
Rothman explains that North Carolina experienced a milder housing cycle during the Great Recession in comparison to the nation as a whole.
“Building up to 2005 & 2006, eastern North Carolina did not experience as much massive growth in real estate prices, as in lots of the hot-spots of the housing crisis, such as Phoenix, Las Vegas. However, real estate prices did decline with the onset of the great recession.”
In many of the towns in eastern North Carolina, home prices are still lower today than they were approximately seven years ago.
For instance, in Carteret County, the average home price was $280,000 at peak market in 2007. During the lowest point of the recession, house prices dove to $220,000. Today, that number would be back up to $240,000.
Goldsboro held record buys during 2009 with prices averaging at $145,000. After falling $22,000 in just two years, it’s bounced back to around $137,000.
Military families in Jacksonville saw the average home prices soar from $136,000 in 2005 to $180,000 in 2013. These days, home prices are holding steady at $153,000.
Compared with the rest of the country, home prices peaked a little later and fell to a milder extent in North Carolina. They also bounced back less dramatically.
Keller Williams Real Estate Agent Wayne Brazier has been in the business for 15 years. He currently heads a team serving Jones, Pamlico, Carteret and Craven Counties. Wayne has noticed the same pricing pattern in New Bern, highest before the recession, sinking in subsequent years and now trying to rebound.
“You know the average sales prices of the houses back in those days was like $220,000 a house. And today, they are still in and around the $170,000 range.”
The good news for sellers is the increase in buyers the lower prices have attracted. 2015 boasted the highest number of housing units sold in over six years. Wayne reiterates that if you’ve ever bought or sold a house, you know timing is everything.
“In real estate you go through where there’s a buyers’ market and a sellers’ market. Where it’s balanced is a very short time. That’s more of a seven to ten year cycle. So if I’m in a buyer’s market today, probably in the next seven to ten years I will go through a sellers’ market.”
Still, market conditions will vary, with urban areas having an advantage.
“When I talk about our numbers here, about 190 days on the market for an average house to sell. If you look at Raleigh and that particular area right now, I’ve talked to several agents and their average days on the market are like 42.”
Clearly, the area that the house is in greatly affects its marketability. Hence the old saying, “Location, location, location!”
“We all don’t experience the same market at the same time. So even when we were at our lowest, Jacksonville, just 30 miles down the road, was screaming, selling all kinds of properties. Also a place like Atlantic Beach Morehead City, they have a lot of high-dollar properties. And so when those prices dropped, their market went way down.”
Carteret County Real Estate Broker Mary Cheatham King specializes in those luxury coastal homes. She leads a team of realtors in Morehead City where they cater to a seasonal crowd. But the lure of sand and surf was still not enough to keep their market afloat.
“I think that tourism certainly has helped our market, but you’ve also got to keep in mind that so much of the high end property, so much of the money in our area comes from second-home owners. And what’s the first thing that goes during a recession? You know it’s those non essentials.”
Yet with the uptick in the economy, she says people are now willing to spend money again, especially on those high-end properties. And when is the best time to hook your dream beach house? Well according to Mary, it’s not what you might think.
“A lot of folks think of our selling season on the coast as being in the summer time, but it’s really not in my opinion. It’s more late winter, early spring. Folks who are making purchases, particularly second-home purchases, really like to be settled in by the time the sun comes out and it’s time for them to enjoy their new property. With Easter being early this year, I think that’s going to be even more true.”
Mary says a seller’s market may not be too far off.
“The biggest trend that I think we’re seeing in our coastal market is that things are improving. Things began to improve over a year ago. But what we saw with our last selling season, was that the inventory sky-rocketed. Because I think a lot of sellers heard the message loud and clear, that market conditions have improved and it’s time to sell.”
But, if you can hold out longer, it could be even better in the future as the prices rise. North Carolina's housing market is continuing to gain momentum, which proves a great time to advertise property. Wayne says when discussing options with your real estate agent; ensure your property is at a competitive pricing point.
“It’s definitely a buyer’s market. And when you have a lot of houses on the market, obviously the buyers have a lot more choices.”
As a buyer, you hold the power, you make the demands. And as more houses are added to the MLS every day, your options increase. Mary encourages prospective buyers to set sail on this new adventure with clear guidelines in mind.
“I really think that prices in our market are going to continue to increase as we go through the remainder of the selling season and into the summer. So if you’re a buyer, I would say go ahead and put those feelers out and start looking.”
The bottom line is, since the great recession, home prices have rebounded across the nation, but here in North Carolina, we still have some catching up to do.