It’s hard to miss all the doom and gloom in the media regarding the economy lately.
Traditionally, when the media evaluates the economy they talk about two things: unemployment and the housing market.
However, the pandemic from 2020 through 2022 running with the “The Great Resignation” of 2021-2022 has irrevocably skewed the unemployment numbers for quite some time. Throw in the relatively new found revelation that it is possible to not just work from home, but to work from anywhere, and the uptick in the gig economy, jobs data has become a slippery statistic to grasp and therefore, an unreliable indicator of the overall health of the economy.
This leaves the housing market.
It’s not all that bad. And it’s certainly not all doom and there’s only a little bit of gloom.
Before the real estate market had hit its most recent peak in 2022, there were people who were already talking about a burst in the bubble. This is the nature of people. Have we seen a decline over the past few months? Yes. Have we seen a bubble burst? Nope.
In the High Country, January 2023 the percentage of sales price to list price was 97.3%. In January 2022, it was 100%; so, yes, it’s down a little. But pre-pandemic, January 2019 and January 2020 were 94.5% and 95.4%, respectively.
Yes, the percentage of sale price to list price is down from the height of the boom caused by the pandemic flight from highly concentrated urban areas; but it’s up from before the boom. Would this be a “normal” increase if we’d never seen the pandemic surge? Of course, there’s no way to know, but it seems like a reasonable assumption to make given what we know of the market.
No one can deny inflation is a dragon we are all battling right now. No one can deny interest rates have risen; but they’ve also come back down…a little. Economists are predicting changes to interest rates throughout the year in 2023, though none of them can seem to agree how much or how often. However, if a full blown recession hits, they all agree, the Fed will not hesitate to use interest rates to stimulate the economy back to health.
So, it seems that while the Housing Market is often at the mercy of the economy, the economy is often at the mercy of the Housing Market.
Recently, the National Association of REALTORS did a study on metros with the biggest increases in home values in 2022; the Carolinas had 27% of the top 15. While we might not be able to prevent any impact from economic troubles, it does appear we are in the right place to weather the storms, whether they be large or small.
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