The real estate market in the 12-county Fayetteville metro area is healthy but, as is the case nationally, the inventory of new homes and resales is low.
That was among the primary takeaways Tuesday afternoon at the 2020 State of the Real Estate Market luncheon that brought about 500 real estate office owners and brokers to the Crown Coliseum ballroom in Fayetteville.
The program, in its 12th year, provided insights into homebuying and selling activity in the surrounding area in 2019 as well as some predictions for the year ahead.
Lawrence Yun, chief economist of the National Association of Realtors, gave an outlook for the national housing market followed by speakers Dave Evans and Zan Monroe.
Evans, the owner of Main Street Realty in Fayetteville who also compiles local real estate statistics, tackled new construction in the Fayetteville metro while Monroe, CEO of Longleaf Pine Realtors, offered an overview of resale trends.
Yun, who has spoken at the real estate market luncheon previously, predicts that mortgage rates will remain low across the nation. He does not expect an economic or housing recession in 2020.
“Fayetteville has huge potential for growth based on the nearby city growth that has occurred,” Yun said. “The housing market conditions in recent years have been rising only moderately, but I think there’s potential for quite an upsurge in the upcoming years, whether that’s two years from now, five years from now. But affordability is a great help for Fayetteville.”
Yun started his part of the program reminding those on hand how the nation was “in a scare” a year ago with news reports that “we are in an imminent recession. A recession is just around the corner.”
As a result, he said, homebuyers began to retreat.
“The stock market was crashing, the mortgage rates were hitting above 5% and there was the scare,” he said. “You dial up to today, one year later. The stock market is at an all-time high. Mortgage rates are under 4%. Homebuyers are coming into the market. Yet we face one unique challenge.”
That challenge, Yun said, is there are not enough homes to sell. And somehow, those that are on the market are not exciting to buyers.
“There’s not enough inventory on the market,” he said.
While Evans concluded that there were just as many homes sold in the Fayetteville metro area in 2019 as before, the inventory — based on the absorption rate — is low.
Last year, 47% of new-construction homes fell between $100,000 and $250,000. But Evans noted that the market is selling fewer new homes than in 2000.
Currently, the market has a 3.4-month absorption rate for new construction, with six months of inventory considered a balanced marketplace.
Last year, he reported, 1,344 existing homes sold in the metro area at a median price of $252,706.
Evans expects that prices for newly built homes will climb but the inventory of new-construction homes will drop lower “as we go forward.”
“We may see a little less building,” he said.
Monroe echoed the assessment that more inventory is needed.
“The real estate market in this region is healthy, but we need more inventory — more houses. The market here is healthy and affordable.”
Resale inventory is currently at 2.3 months.
In 2019, 8,061 resales closed in the market at a median price of $159,900, according to Monroe.
“We are the most affordable housing market in the United States,” he said, before adding with a grin, “And we’re more friendlier.”
Staff writer Michael Futch can be reached at [email protected] or 910-486-3529.
