Will NC Real Estate Market Crash Anytime Soon?

Question

One of the biggest fear of new investors, home buyers, or someone who is trying to get into real estate as a profession, is what is going on with the market. In today's global economy, and with the pressures of COVID still being realized in many supply chains, we find that real estate has not been shifting as much as people fear. In fact in many markets, prices are rising, houses are still selling fast, and rent is increasing across the board.

"We continue to hear rumors of a market crash, but local data does not corroborate this at this time. Even if minor, the monthly figures indicate that the market has begun to cool. In June 2022, home prices in North Carolina rose 14.5% annually. Simultaneously, the number of homes sold increased by 7.7%, while the number of properties for sale decreased by 2.0%."

https://www.noradarealestate.c.... For more information, and statistics, as well as sources.

This could signal a potential opportunity for the savvy investor! Stay on your toes, and remember: Real Estate always has a cycle. Just like anything else!

Chris Seveney · Answer

It’s amazing how in 2007-2008 people said the same thing on housing shortage and homes were getting built left and right. Builders stopped building and in 2010-2012 you did not hear anything about a housing shortage as there was an oversupply of houses on the market

People who think housing will continue to go up I am curious who is going to be buying the homes? Since the us printed 6T dollars last several years it’s like started the game of monopoly with a lot more $, so yes you would pay more for those properties. Even if half the board is sold (supply is down) but the money supply dries up significantly - you are not going to pay what you would prior.

Real estate is a lagging industry, it took 6 years for the last crash to bottom out, it doesn’t drop overnight.

Same goes for inflation, celebrating inflation went from above 8 to below 8 is like a 150lb person gained 300lbs and then lost 10. pounds. It’s a great start but does it mean it will be easy for that person to get back to 150 lbs??

Tristin Crum · Answer

A paragraph from an analyst friend of mine

"There is still a huge housing supply problem in the United States given 37 million people between the ages of 24-37 don't own a home. This is because 27.1 million homes were built between 2000-2009 but the Great Recession derailed the pace of home building by almost 80%. Only 5.8 million homes were built in the United States between 2010-2019 by comparison. The homes for this next generation of buyers were never even built. Ultimately the last housing crash will prevent another actual crash from occurring in the United States based on the sheer lack of supply. Even if mortgage rates hit new highs, it won't fix the supply problem. It will just temporarily reduce demand which is what the market is already experiencing. If mortgage rates materially drop from here, it's not outside the realm of possibility we could go back to bidding wars. Certainly some buyer incentives, such as closing cost credits and seller rate buydowns, could start to dry up as more buyers enter the market."

Jared Trindade · Answer

I think it is important to consider a fundamental point in this. There is a finite amount of land, there is an ever increasing supply of people who need homes.

Real estate, regardless of market conditions is similar to the stock market, it is inherently going to increase over time- no matter what. Logically it doesn't make sense that an entire economy collapses forever at this point, the most realistic way for an entire economy or market to die would be absolute obsolesce of whatever was being provided. Which is obviously not the Real Estate Market. Otherwise, as demand will always increase over a very long time, there's no reason to assume that short term- "Oh doesn't look like a good market right now" play even makes sense.

In fact I find almost an irony in a negative mindset right now. For months everyone was complaining about the competition of having to fight for properties against so many other bidders, and how quickly deals were turning so they didn't even have a chance to take a stab at it. Now that the market has cooled off a bit, people are taking a step back to reevaluate, and this massive lull is a great opportunity for people who know what they are doing, know their markets, and know how to make the cash to genuinely swoop in, and capture so many dollars that are being passed up on by so many investors. I unfortunately liken this to fear, and obviously adequate risk judging needs to be taken into consideration in any real estate investments.

As I said in my post however "This could signal a potential opportunity for the savvy investor! Stay on your toes, and remember: Real Estate always has a cycle. Just like anything else!"

More buyers are coming into the market daily, real estate may be lagging behind, may have it's ups and down, but that's the cycle.