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High Country Real Estate: Housing and the Economy

By Michelle Hammond, REALTOR, Blue Ridge Realty & Investments, LLC

On August 2, 2023 The National Association of REALTORS® held its Real Estate Forecast Summit: Residential Update virtual event. The meeting was open to all members of the National Association of REALTORS® and was recorded for review by both members and the media. The speakers were Kevin Sears, NAR’s 2023 First Vice President, Lawrence Yun, NAR’s Chief Economist and Jessica Lautz, NAR’s Deputy Chief Economist.

If you follow news of the economy, you’ve likely heard of or seen Dr. Yun; he not only is NAR’s Chief economist, he participates in quite a few national forecasting panels including the Wall Street Journal Forecasting Survey. Additionally, he is a participant in the Industrial Economists Discussion Group at the Joint Center for Housing Studies of Harvard University. He received his undergrad degree from Purdue University and his Ph.D from the University of Maryland at College Park.

What I’m trying to say here is, this guy knows his stuff!

Dr. Yun began by speaking about the US Debt vs. Tax Revenue. Unsurprisingly, the debt rose throughout the pandemic. This in turn has caused ripples in other parts of the economy.

Next, he demonstrated how the Federal Reserve Rate Hikes from March of 2022 thru July of 2023 were  raised. Unfortunately, these rate hikes were so aggressive they have priced many buyers out of the market entirely. The next meeting of the Federal Reserve is in late September. The hope is that there will not only not be another rate hike, but with the possibility the rates might be lowered somewhat. 

The aggressive raise in rates is in response to the rise in inflation. In July of 2022 inflation had climbed to over 8%; since that time inflation has begun to decelerate. While it may not feel like it yet (because all economic trends take time to make their way into the main stream), inflation is the lowest it has been since early 2021.

Nationwide, compared to a year ago,  Airfare is down 13%, Medical Services are down 1% Clothing is up 3.1%, New Cars are up 4.1%, Lodging Away from Home (hotels and Air BnB etc.) is up 5%, Electricity is up 5.4%, Food is up 5.8%, Rent is up 8.3% and Car Insurance is up 16.9%.

When talking about the economy, two sectors come up over and over again. Jobs and the Housing Market. Jobs are holding steady. While existing home inventory is the lowest it has been in this century, new construction is back where it was prior to the pandemic.

Nationwide, foreclosures are so low, they are almost non-existent. Home  prices are up in NC 12.7% from one year ago as of the first quarter of 2023. As a matter of fact, the only state with a bigger increase than NC and SC was Florida.

So, while the economic outlook of late has not all been sunshine and roses, it’s not all bad either. Here in the High Country especially, we have a healthy real estate market and that means a thriving economy. Though, I must admit, I will be glad when that lower inflation starts trickling down my way!