January 2023 Market Update

Data for Single-Family and Condo/townhomes in Ashe, Avery, and Watauga Counties. Comparison December 2022 vs. November 2022.

Uncertainty about the market and interest rates has led to a slowing in December and continuing into January. On a good note, projections for 2023 and beyond are starting to converge into a somewhat clearer picture

• INTEREST RATES: There is a strong consensus that the interest rate increases are slowing. Predictions overall indicate interest rates to be below 6% by the second half of 2023 and to settle in the 5.5-6% range.

• INVENTORY: While much of the country is showing a marked increase in inventory, our market is still sitting at 2.9 months' supply. This is significantly higher than this time last year. However, even as inventory increases overall, the shelves are bare when it comes to the core of our market: updated homes priced from $300-$700K that have good rental potential. In this category, we all have buyers waiting for homes to hit the market, and demand still exceeds supply.

The hesitance by sellers to list has been the key driver of the slowdown in our primarily second home market, despite the huge value gains. With second homes, sellers do not have to relocate. The issue remains that they cannot find other properties to purchase elsewhere. The tradeoff is not attractive, especially if they have a mortgage payment at 3%

•PRICING: The overall consensus by experts is that pricing will stay flat or have smaller gains in 2023, with a range of -5% to +5% depending on the market and the segment. We have already seen a correction from overpricing and fewer bidding wars, and there have been price reductions. For our core demand segment, pricing should stay even or increase slightly, although we will see more seller concessions.

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